How to Choose the Best Credit Card

Here's how to pick the right credit card for your needs...

When it comes to credit cards, there are an endless array of choices. There are credit cards designed for every level of credit, and for almost every interest under the sun! But how do you determine which card is the best for your personal needs and interests? Here are some factors worth considering:

How is your credit history?

Since credit card companies use your credit history to determine if you qualify for a particular credit card, this is the first factor you should consider when choosing an offer. The better your credit, the better your chances of getting approved for the credit card of your choice.

Good / Excellent Credit: Normally, people with good / excellent credit get approved for any credit card they choose. Platinum and Titanium cards are reserved for these people; which offer lower APR's, less fees and more incentives.

OK / So-So Credit History: Although "so-so" credit might get you approved for a Platinum card, you are more likely to be approved for a Gold or Classic card.

Bad Credit / No Credit: Individuals with bad credit should apply for credit cards designed to rebuild or improve their credit. There are a variety of options including unsecured, secured and prepaid cards.

PLEASE NOTE: It is important to apply for the appropriate credit card for your credit history. If you have bad credit and you apply for a Platinum card, you will not be approved! This "denial" will have a negative impact on your credit score and may further impair your creditworthiness.

How will you use your credit card?

The next step in choosing a credit card is thinking about how you'll use it.

If you don't carry a balance:
If you expect to pay your bill in full each month - your best choice is a card with no annual fee and a longer grace period. You may also consider a reward credit card (with no annul fee) since it's higher interest rate won't have an effect and you'll have the ability to earn free bonuses.

Related Links:

Credit Card Comparison

If you carry a regular balance:
If you carry a balance from month to month, you should look for a low apr credit card. This will allow you to save more money on interest while carrying your balance. You could save even more if you found a 0% intro credit card with a low ongoing rate after the intro.

Do you have any special needs or interests?

Some people use their credit cards for specific purposes or to fulfill special needs. For example, if you use your credit card for cash advances, you’ll want to look for a card that carries lower fees on cash advances. Likewise, if you need to transfer existing credit card balances, you'll want a credit card with lower (or NO) balance transfer fees.

TIP: 0% intro APR credit cards are a great option for transferring existing credit card balances. Since you won't pay any interest on the transfer amount, you could save a ton over the intro period!

Many credit card companies also reward card holders for their devotion to certain products and services. Do you do significant amounts of traveling, use a specific brand / service, or shop at a specific chain of retail stores? Here are some things you may want to consider:

Travelers: If you are a frequent traveler, many companies allow you to earn bonuses for your loyalty. Frequent flyer cards allow you to earn free air travel, hotel stays, rental cars and more. Some even allow you to earn gasoline rebates or auto rewards.

Shoppers: If you prefer a certain retail store or brand of products, retail credit cards allow you to earn specialized rewards. Cash back credit cards allow you to earn cash, rebates and other rewards. In some cases, they offer higher incentives for purchases on certain brands or products.

* For more helpful info, see the FTC's publication: 'Choosing & Using Credit Cards'