How to find the right credit fit
Shopping for credit cards is a little like shopping for shoes. Fit matters but so does style. Your finances need to be the right fit but the perks and benefits also have to suit your lifestyle.
1. Take your measurements.
How do you plan to use your card? Think about these questions to find a credit card that fits your wallet and your life:
- Need a card for emergencies? Try one with no annual fee and a generous credit line to cover unexpected expenses.
- Want to travel? Many rewards cards let you earn air travel, cruises or vacations, as well as offering complimentary travel insurance and other travel-related perks.
- Plan to use your card for everyday purchases? Consider a rewards credit card that gives you points toward cash back, merchandise or other benefits based on how much you spend. Everyday purchases can really add up.
- Got a cause to support? Some cards can give back to something you care about, like an alumni association or your favorite nonprofit group.
- Passionate about something? Other cards allow you to show your love for a favorite sport or hobby.
- Need to consolidate debt? Choose a card with a rate that’s lower than your existing credit card rates, but be sure you can pay it off before the new rate expires.
- Plan to pay off the balance each month? The interest rate may be less important than rewards, benefits and perks.
- Expect to carry a balance? Shop around for a low standard interest rate, not just an introductory rate.
- Looking for deals? See if your favorite store has a card for faithful shoppers or check out cards that offer shopping discounts.
Managing Credit Tip #5
Want to avoid paying interest on purchases? If your credit card has a grace period on purchases, and if your balance consists of only purchases, take advantage by paying your balance in full every month.
2. Size up the options.
Mix and match card types and benefits for the perfect fit:
- Private label cards, like department store cards, can usually be used only at specific merchants.
- Standard cards have lower credit lines and fewer benefits than premium cards.
- Premium cards, such as Platinum cards, offer higher credit limits and usually have extra features, including product warranties, purchase protection, travel insurance and emergency services.
- Rewards cards offer reward points based on the amount of your purchases. Rewards vary but can include cash, travel, merchandise or shopping discounts. Some cards even let you choose from a range of different rewards. Standard, Premium and even Private label cards may also offer rewards.
- Affinity cards show your support for a group or cause such as a charity, a college, or a sports team. In some cases, contributions are made to the group whenever you use the card.
3. Shop around.
Reading about rates and fees may be boring, but your wallet will thank you later. Be sure to review the terms and conditions carefully before you apply. Key information about rates and fees is required by law to be displayed in a box or chart for easy comparison. The offer should also include details of important benefits.
Information you need to know includes:
- The annual percentage rate (APR) for purchases and other transactions
- Fees and penalties, including annual/monthly maintenance fees, transaction fees, and fees for being late with your payment
- Whether the card is accepted at the places you will need to use it
- Rewards, discounts, warranties and rebates
- Security features, like fraud protection
Take action now.
By being a smart shopper, you’ll find a credit card that fits nicely in your wallet—and your life.
What's next? Tips for comparing credit card offers