What’s in Your Wallet? 5 Tips to Choose the Best Credit Card for You
Which credit card works best for you? With all the options out there these days, it’s easy to get confused when trying to choose. Rewards, balances, interest rates, and many other factors come into play when deciding which card to get. Luckily, with a little education on how these cards differ, the choice becomes easy. Check out the different credit cards and tips on how to choose the right one for you.
1. Check Your Balance: Balance Cards
Often a desirable choice, balance transfer cards allow you to transfer a high interest balance to a new credit card with lower interest. These cards often begin with an APR (annual percentage rate) of 0% for the first few months or sometimes even a year. They provide a great choice for anybody looking for a new card, or who is new to credit cards in general.
Here’s a few worthwhile balance cards:
- BankAmericard Visa Card
- Citi Simplicity Card
- Capital One Platinum Prestige Credit Card
2. Get Your Money Back: Cashback Rewards Cards
With a cashback card, you can earn points towards cash rewards with each purchase you make. The more money you spend on your card, the more cash rewards you accumulate. Generally, the cashback rewards end up at around 1% of your total purchase, meaning you’d earn $1 for every $100 spent. Cashback rewards come at a cost to banks, so occasionally these cards come with annual fees (around $50-100). Moms (or anybody who regularly shops for a household) benefit the most from these kinds of cards, since the more you purchase, the more you get rewarded.
3. Love Prizes?: General Rewards Cards
Points cards work very similarly to cashback cards in that card holders accumulate points, and obtain more points by using the card more over time. The difference between general reward points cards and cashback cards lies in the actual reward, which in this case means jewelry, gadgets, gift cards, electronics, and more instead of cash. These cards best serve anybody who regularly pays their balance at the end of each month (or early).
Here are some cards with great rewards:
- Citi ThankYou® Preferred Rewards Card
- United MileagePlus® Explorer Card
- American Express® Premier Rewards Gold Card
4. Mind Your Business: Executive/Business Cards
These cards usually come with the same benefits as others (rewards points, travel points, etc.) but with extra bonuses made for business owners. Certain perks found with these cards include separation of business and personal expenses, higher credit limits, and special business rewards. Business owners and even executives benefit the most from these cards. Business executives can also refer to Mark Weinberger (CEO of Ernst & Young) to help decide the best credit choices to make for their company.
5. Consider Your Travels: Hotel/Airline Rewards Cards
Travel rewards help towards your stay in hotels, airline rewards help towards purchasing flight tickets. Certain hotel rewards include theme park admissions and cheaper travels; airline rewards include priority boarding, and the ability to avoid baggage fees. Some cards are specific to certain hotel companies or airlines, in which case rewards can go towards upgrading your room, or seat on a flight. These cards certainly pertain to people who travel often, otherwise the annual fees may undo any benefit you get from the rewards.
Be sure when evaluating different credit cards that you understand the interest rates and fees that apply. Find what fits your financial situation and lifestyle, and start getting the most out of your credit!