How To Choose The Best Credit Card – The Beginners Guide
Learn how to choose the best credit card: Hey guys, today we will be showing you how to choose the best credit card for yourself or your business. We quite understand that some people find it difficult in picking the best credit card. This is a result of the numerous credit card available for selection. However, if you find yourself in that ugly situation, you don’t have to panic.
Tontimes is here to guide and direct you on the things to look out for while choosing a credit card. That is why we have decided to put this post on how to choose the best credit card for you. Just relax and go through it.
Furthermore, this page explains what to look for when selecting a credit card, as well as a credit card comparison. It explains what happens when you apply for a credit card and what you can do if you are denied.
Note that no single credit card is superior to all others in all categories — or for all people. However, by understanding your options and asking the right questions, you can find the card that is best suited to your spending habits and credit situation.
Read more: How To Pick The Best Credit Card.
If you’re looking for a new credit card, you might be overwhelmed by the hundreds of options available. There are seemingly endless varieties of cards offering rewards, no-interest periods, and the opportunity to build credit, making it difficult to choose the right one for your wallet.
Because there is no such thing as a one-size-fits-all credit card, the best credit card for you may differ from the best credit card for your friend. However, there are some steps you can take to help narrow down your options when looking for a new card.
Tontimes reviews some simple steps you can take to select the best credit card that offers the most benefits.
How To Choose The Best Credit Card
Follow the steps below to pick the best credit card for yourself.
1. Check Your Credit Score and Credit Report
The first step is to review your credit score and credit report. There are numerous free resources available to check your credit score, including CreditWise from Capital One and Discover Credit Scorecard. Furthermore, many of these services provide insight into factors that affect your credit and advice on how to improve it.
Note that you do not need to be a Discover or Capital One customer to use these services.
Credit score ranges differ depending on the credit scoring model (FICO or VantageScore), but because creditors use FICO Scores in 90% of lending decisions in the United States, we have listed those ranges below.
FICO Score ranges
- Excellent: 800 to 850
- Very good: 740 to 799
- Good: 670 to 739
- Fair: 580 to 669
- Very poor: 300 to 579
Once you’ve determined which range you fall into, you can use that information to narrow down your credit card search. However, consider cards with credit requirements equal to or less than yours. Consider cards with good or fair credit requirements if you have good credit.
2. Identify which type of credit card suits your needs
Credit cards are classified into three types: rewards, 0% APR, and credit building.
- Cards that can assist you in improving your credit when it is limited or damaged.
- Cards that help you save money on interest.
- Cards that earn points/rewards.
The best card for you is one with features tailored to your specific requirements. If you don’t travel frequently, for example, the best travel card in the world won’t help you much.
We’ve listed which consumers each type of credit card is best for below.
Rewards Credit Card
Rewards credit cards can help you offset the cost of purchases and pay for upcoming travel if you have no debt and have already established good credit (by redeeming points or miles). Cards that offer cash back, points, or miles in common spending categories (travel, gas, groceries, and dining out) can be redeemed for statement credits, gift cards, airfare, hotels, and other items.
You may receive additional benefits depending on the rewards card you open.
Intro 0% APR
If you want to get out of debt or finance new purchases, a 0% APR credit card can be a useful tool. This is because it charges no interest on purchases, balance transfers, or both.
During the interest-free period, you can save significantly more than if you kept a balance on a high-interest credit card, where a portion of your payment goes toward interest charges.
The best balance transfer credit cards have interest-free periods of at least a year, and some cards even have no balance transfer fees.
If you are planning a large purchase, consider putting it on an intro 0% APR card to benefit from no interest charges while repaying debt. Just remember to pay off your balance before the promotional period expires.
Keep in mind that the best 0% APR credit cards usually require good or excellent credit.
If you have a little credit history or a low credit score (669 or lower), you should prioritize credit building over rewards or special financing offers. A good credit score is essential for getting the best interest rates and increasing your chances of getting approved for credit cards, mortgages, and loans.
Credit cards designed specifically for credit building or for people with fair or average credit can help you improve your score.
3. Shop around for the best credit card deals
Once you’ve determined which type of credit card is best for you, it’s time to shop around for the best credit card deals. Consider bonus categories for rewards cards, the length of the intro period for 0% APR cards, and credit tools for credit-building cards.
Don’t forget to consider fees and interest rates when making your decision. Annual fees, foreign transaction fees, late payment fees, and APRs are all included.
If you can’t decide between two cards, consider submitting both.
If you can’t decide on just one card, consider filling out a pre-qualification form online to see if you qualify. Because it involves a soft pull of your credit, you can submit multiple pre-qualification requests without affecting your credit score.
See also: How To Pick The Best Credit Card.
4. Ask The Right Questions to Narrow Your Options
Search for the type of credit card you’re looking for on NerdWallet’s credit card comparison tool, filtering results based on your credit score and monthly spending.
5. Apply for the Credit Card With The Best Overall Value
The easy part is narrowing your options, but deciding between two or three similar cards can be difficult. If you’ve already determined a clear winner after Step 3, stick with it. If not, a tiebreaker round will be held.
Checklist of things to look for when selecting a Credit card
Here’s a checklist of things to consider when selecting a credit card:
- Annual Percentage Rate (APR): If you don’t pay the full balance each month, this is the cost of borrowing on the card. Comparing the APRs of different cards will help you find the cheapest. Additionally, you need to compare the cards’ fees, charges, and incentives
- Minimum repayment: You will have to repay a minimum amount if you don’t pay off the balance each month. The fee is usually 3% of the balance due or £5, whichever is higher.
- charges: Check the credit agreement to see if there are any other fees associated with the card. You will usually be charged for exceeding your credit limit, using the card abroad, and making late payments.
- annual fee: Some cards charge an annual fee to use the card. The fee is added to the amount owed, and unless you pay it in full, you will have to pay interest on both the fee and your spending.
- Cash Back: This is where money is refunded to your credit card based on how much you spend. Check to see if you’re eligible for the cash back. It may, for example, only apply if you pay your balance in full every month. A lower interest rate may be more advantageous.
- Introductory Interest Rates: This is where you begin by paying a low-interest rate or none at all. However, the rate rises after a certain period of time.
- loyalty Rewards or Points: The points accumulate based on how much you spend and can then be used to purchase goods. This is sometimes the case in specific stores. Examine how and where the rewards can be used, and consider how likely you are to use them.
How To Apply for a credit card
You can apply for a credit card through the following methods listed below:
- By phone
- On line
- By post
- At a bank or building society.
You will be required to fill out a form, and the credit card provider will check your credit history with a credit reference agency to determine your creditworthiness.
Read also: List of Good Cheap Insurance Companies
Your credit report contains information about how you manage your finances, such as your bank account and any other debts you have. It informs the provider whether you are a good payer and whether you have had any court orders in the last six years. You can check your credit history by contacting one of the credit reporting agencies.
Now That you’ve found the best credit card. What is next?
Choosing the best credit card is a big step, but don’t stop there. To get the most out of your card, use it correctly. Pay your bills in full every month if you’re trying to establish credit, and don’t use up too much of your available credit. If you have a 0% APR loan, stick to your debt repayment plan.
More so, if you want to earn points, use your card for everyday purchases and pay your bill in full each month.
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