Choosing a Credit Card: What to Consider

April 10, 2012 by  Filed under: Credit 

When choosing a credit card, it is important to weigh all of your options. There are many factors to take into account, and several factors which determine what credit cards you are eligible to receive.

The first factor to consider is: what are you using the card for? Are you going to use this card for personal or business use? Will you be paying for lots of travel, plane tickets, etc? These are great questions to ask yourself. If you want to separate your business from personal expenses, get a business card. If you plan on spending a lot on travel and plane tickets, get a frequent flier miles card, or a hotel rewards card. If you just want a card for everyday spending, you should consider getting a card that gives cash back or reward points for everyday purchases, such as groceries and gas.

The second factor to consider: How is your credit and credit score? If you have poor credit (or no credit) you will usually be disqualified for most cards. In this case your options are limited. You will probably only qualify for a “My first credit card”. However, this is still ok because you will be building your credit once you get it. If you have strong credit and a high credit score, you will have many more options. For instance, you can get a rewards card that gives you points or cash back with every purchase. Some cards even have additional benefits, like free travel insurance, price protection, identity theft protection and more.

Another factor to consider: Do you carry a balance over from month to month? If you do, you should consider applying for a credit card with the lowest possible APR. Even though some cards have rewards programs, the benefits of those programs are nullified if you are paying interest on your balance. If you pay off your balance every month, you can take full advantage of all the benefits associated with a good reward program. Some programs even provide bonuses for signing up! Many offers have values in excess of $500, which is great. Often times it is required to meet a minimum spending amount in a certain time frame to get the bonus, so do your homework and make sure you qualify. An example of a good option is the Chase Ultimate Rewards program available for cards such as the Sapphire Preferred card.

A credit card is a great asset to have, so if you are looking for one, make sure you get one that suits your needs. Don’t be afraid of credit cards, because they can really help you out in lots of situations. Also, remember establishing a line of credit with a credit card can greatly improve your credit rating, which will help you get lower rates on car loans and mortgages.

Finally, always use your credit card responsibly. Remember credit is not free money. It is very expensive, actually. You can ruin your financial stability if you haphazardly spend on your credit card. Don’t get caught in the lender’s web. I recommend only charging what you can pay off at the end of the month.

Article Source:
http://EzineArticles.com/?expert=Sean_H_Kelley

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