How to Choose the Best Credit Card

It is almost impossible to live without having a credit card. Credit cards are a necessity for some purchases and a tool to help build credit, but how do you choose the best credit card? After sorting though advertisements sent to you through the mail and pages of spam on the internet which credit card is the best for you? Here are a few tips on choosing the best credit card.

Read and understand your credit card terms and conditions when you open a credit card.

Know what you are getting yourself into. Be aware any fees that may be involved when carrying a balance or late payment fees. Late fees, interest fees, or annual fees may be hidden when you sign up for a card. The best credit cards offer small fees or no fees and are normally willing to waive late fees if you are occasionally late on a payment.

Find a credit card with no annual fees.

Many credit cards now do not have annual fees but they may also have no grace period. A late fee or finance charge may be assessed the day after the statement due date. Make sure you are aware of all due dates and grace periods and get your payments scheduled every month that way you will not be shocked by any fees.

Be Wary of any Credit card offers sent to you.

Most of these cards are advertisements that come in the mail marked pre-approved and include promotional offers. You may not realize until the promotional period is over that you are stuck with a card that has high interest rates and hidden fees.

Stay away from too many store cards.

Store credit cards, known as private label credit cards, may be offered at check out at some stores. These department stores receive commission on every credit card application processed. Store clerks encourage shoppers with discounts just for signing up for a store credit card. These cards may be convenient, but having too many will reflect poorly on your credit score and can carry balances that are easily forgotten. Store credit cards, known as private label credit cards, may be offered at check out at some stores. These department stores receive commission on every credit card application processed. Store clerks encourage shoppers with discounts just for signing up for a store credit card. These cards may be convenient, but having too many will reflect poorly on your credit score and can carry balances that are easily forgotten.

Look for a credit card with benefit and reward programs that fit you best.

If you are getting a credit card primarily for hotels and travel you should look for credit card that gives rewards for such expenses. As always make sure you pick the card that accommodates you best. Some rewards programs sound great, but when it comes time to claim your rewards they may not be what you expected.

Look for a credit limit that reflects well on what you need.

If you are looking for a first credit card you may look for a lower credit limit. A lower limit won’t let you get into too much trouble if the temptation of credit gets the best of you. Also it is easier to pay off a lower balance which reflects well on your credit score. If you are trying to build credit the worst thing you can do is max out a credit card with a large credit limit.

If you are looking for a first credit card to build credit card or a supplemental credit card to manage certain expenses, make sure you are comfortable with your choice and you do your research. If you still need some help choosing a credit card many local banks offer major credit cards with fair promotions. A banker would be happy to assist you with any credit question and help you make a choice. Don’t let anyone force a credit card on you and be aware of all the terms and conditions on any credit card you choose.

Updated: January, 8 2012