When people learn that my blog is about credit card ( and make videos on credit card usage) They always askme “What’s the best credit card?” I always reply (of of course), “That depends.” There isn’t a “best” credit card that will work for everyone. However, there’s an approach to help determine which card is the best fit for you.Which credit card is best for me?
Who is your name?
The first step is to determine the identity of your credit card holder. In particular, how can the answers to this question?
- What is your credit score?
- Do you have an unpaid credit card balance?
- How much do you pay on credit card?
- What rewards are best suited to your needs and life style?
The questions are similar to the decision tree. From top to bottom of this list, how the answers you give each one will reveal which kind of card you’ll need or if you should continue with the other questions. Let’s go through each of them individually and you’ll understand what I’m talking about.
What’s your credit rating?
Are you just beginning your journey on credit? Or do you have many years of credit background? Do you think that your credit history is positive or negative?
Yep, more questions. Let’s figure them out.
If you’re a student If you don’t have a credit history, and are in college, I would suggest to get an undergraduate credit card from one of the major banks like or one of Bank of America student cards or Capital One’s student cards. But this isn’t an authorization to accumulate debt, so be careful not to get carried away. This is just the beginning step to build credit It’s best to begin college as early as you can, as getting the first credit card could be much more difficult after you’ve graduated from the school.
In case you’re in college , and are either without credit history or bad credit history I’d highly recommend using a secure credit card. The secured credit card requires the deposit of a security to obtain the card however they’re a great option to earn credit without incurring additional fees. Select a secured credit card from a bank with a good reputationCheck out our top secured credit card list for more information. often, the secured card can lead to the card being unsecure. The credit card company can either refund the deposit and allow you to continue using the card, or upgrade you to a superior card, assuming you’ve paid your charges in time. Whatever you choose, you’ll get your security deposit back provided you’ve paid off your balance.
You could also apply for an unsecured credit card, however it’s more difficult regarding whether you’ll get approved and the amount you’ll have to pay in interest or fees. Take a look at our short video about unsecured credit card.
Also… If you’re not a credit-worthy person or are just starting out with credit, you’re done. So, stop reading and look for the perfect account for your needs.
If you’re a creditworthy person with a solid credit score you can move on to the next step…
Do you have an unpaid amount on one of your credit card?
If you’ve got a past of using cardholders, are typically have the balance of your card and pay interest on it? Or do you pay your balance off in total?
If you have balances particularly when you have a large balance that are already in the bank, your best bet is to choose the most low-interest credit card you can locate and not get reward credit cards. Credit cards that offer rewards have interest rates that are generally 2-percent higher than credit cards that do not offer rewards. Hence, having a rewards credit card if you need to pay interest isn’t a good idea because you’ll have to pay more interest than you will receive in rewards. Explore a bit to find cards that offer good rates are difficult to locate. Check out the local bank’s cards with the ones of the top issuers.
If you have balances, it’s not for you. Take out that low-interest credit card and put down the doing your.
But, if you make sure to pay your balances on time each month now is the time to consider rewards. Then, you can move on with the subsequent question(s )…
What is your budget? And what rewards are appealing to you?
The kind of rewards credit card you select could depend on the amount you charge to your credit cards every month.
If you spend less than $1000 per month in any credit cards the best option is likely to be a credit card that offers cash back card. Other reward cards might appeal to you because everyone loves to get free travel, for instance, but it is unlikely that you will spend enough to reach the minimum thresholds that are required to receive discounted airline tickets or costly products. Instead of collecting points or miles for years with the hope of one redemption, consider cash back credit cards which allows you to earn cashback on every purchase and allows you to redeem even tiny amounts of rebates. Nowadays, many cash back credit cards let you redeem any amount but some need you to accumulate $25 and a few be more generous with their thresholds.
Our most popular cash-back credit cards include The Citi Double Cash Card and PayPal Cashback MasterCard. Both cards allow you to get a 2% discount on all card purchases. It’s very simple. If you’re looking to push more hard to maximize the amount of rebates you earn, take a look at cards with greater cash-back percentages in specific categories of spending. For instance, the Wells Fargo Propel American Express Card is a fantastic example, a zero-annual-fee credit card that grants you 3percent cash back on fuel, meals and most travel and many more. It also has a variety of other cards. Chase Freedom and Discover It cards come with specific categories of purchases which earn you 5% in rebates. It is important to note that the categories that earn 5% vary each quarter.
If you are spending more than $1000 per month with the credit card you use (and you pay your balances off completely), that’s when we suggest you think about travel rewards cardsand only in the event that they are in line with your spending habits and offer you the rewards you desire. There’s no reason to think that you ought to consider a trip however, even people who are big spenders tend to prefer using the most reputable cash back credit cards due to their generous rebates as well as the ease of redemptions.
However, if traveling appeals to you there are usually two choices to make:
- If you travel frequently and are traveling with the same airline or hotel chains over and over again It is sensible to apply for a credit card from the hotel chain or airline. It allows you to earn on points or miles you’re already earning and thereby earn rewards more frequently and also enjoy perks like the “elite status” programs such as airport lounges as well as free checked bags and so on. Nearly every major hotel chain and airline offers at minimum the one card which allows you to earn points or miles on your spending. Some have multiple cards dependent on your goals for rewards and the amount you’re willing to shell out in annual costs. (Yes annual fees are charged. The majority of top travel reward cards include these. If you’re spending lots of money using your card and you are a frequent user, you will find that the annual cost is much more than what you pay by the rewards and perks you get. But , make sure you make the calculations using your own expenditure.)
- If you aren’t traveling often (but want to spend more time traveling for pleasure) and you’re charging over $1,000 per month on your credit cards, then it’s a good idea to look into general travel cards such as Chase Sapphire Preferred, Chase Sapphire Preferred or Chase Sapphire Reserve or American Express Platinum or American Express Gold. These cards offer rewards points that are more flexible regards to using them for specific travel expenses or to transfer points into frequent flyer programs as required. Additionally, they provide advantages like access to airport lounges along with travel reimbursements, and many more. The cards may have low annual fees, or costly annual fees of $400,000plus, so make sure you have a rough estimate of what you believe these rewards are worth before getting involved.
You Can Mix and Match
If you’re looking to maximize the rewards you earn from your credit cards You should have multiple credit cards, and use the most appropriate card for each purchase. If you are spending a lot using your credit cards, you could gain a significant amount in rewards and rebates using this approach. If you don’t make large amounts of money on your credit cards every month, it can mean lots of thought and effort for a small reward.