How to Choose the Right Credit Card for Your Needs
June 16, 2017
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One of the first — and most important — steps of any job is deciding which tool will be most effective for that task. While a hammer is great for driving nails into a wall, it doesn’t work quite as well when you’re trying to apply a fresh coat of paint.
Credit cards are the same way. You might have one card for business use, one for emergencies, and another for fun and entertainment. That said, you wouldn’t want to use your business-oriented card to book your family vacation. While thousands of available credit cards might seem identical at first glance, each card has certain perks and factors you must consider.
People who typically carry debt over from month to month would not fare well with a rewards card that has a high annual percentage rate, for example. Someone who uses a credit card only for emergencies probably doesn’t want a travel card with a steep annual fee.
Pull your credit score and take an honest look at your financial history, then consider which cards jibe with your lifestyle. Depending on your credit history, spending habits, and financial goals, there’s an ideal credit card for every situation.
For the Jet Set
Do you often travel for work? You probably want to consider a credit card that provides travel rewards. Travel credit cards might offer a variety of perks, including points per dollar spent, free miles, or cash back for money spent on airlines, hotels, or rental cars. The best cards don’t charge foreign transaction fees, making international travel a breeze.
There are also plenty of choices when it comes to travel cards. One standout is the Barclaycard Arrival Plus World Elite card, which gives you unlimited 2x miles for every dollar spent, a bonus 50,000 miles for spending $3,000 in the first three months, and no annual fee for the first year. After the first year, the card’s annual fee is $89.
A Jack of All Trades
For everyday purchases at restaurants, movie theaters, or retailers, you can’t beat a cash back rewards card. These catchall cards typically give you 0.5 percent to 1.5 percent cash back on all purchases. Some cards offer revolving rewards categories — movie theaters one month, online purchases the next, and gas stations after that — that allow you to earn even more cash back on routine transactions.
Many credit cards offer some form of cash back, so it’s important to carefully consider your options. Capital One, for example, offers both the Quicksilver® and QuicksilverOne® cards. They might seem incredibly similar, as both offer 1.5 percent cash back on all purchases. While the Quicksilver® card has no annual fee, the QuicksilverOne® card offers a higher credit limit after cardholders have made at least five payments on time.
For Emergency Use Only
Everyday credit card use can be lucrative, but sometimes you want a card designed to bail you out of any emergencies that might crop up. In this case, you’ll want a card with no annual fee and a low interest rate, as you’ll typically carry a balance.
Many cards offer low APRs, but some of them offer other beneficial perks and discounts. For example, Capital One’s BuyPower card has no annual fee and a 0 percent APR for the first 12 months. On top of that, it offers cash back that can go towards buying a new car. You’ll pay nothing if you never take this card out of your wallet, but you’ll still be able to collect rewards when you do use it.
Building a Business
Small business owners often need help financing work-related purchases. Fortunately, several credit cards keep business owners’ needs in mind. These cards might offer business-related rewards, flexible payment terms, and low APRs.
The Capital One® Spark® Cash for Business card, for example, offers unlimited 2 percent cash back rewards, a $500 cash bonus (provided you spend $4,500 in your first three months of account opening), and free cards for employees that earn the same rewards.
Find the Right Tool
Every person’s financial situation is unique, and every credit card is slightly different. You wouldn’t reach for a screwdriver if you were trying to dig a hole in your yard, and you shouldn’t assume one type of credit card can fit your every need. Spend some time digging through your credit toolbox to find the card that fits your current needs. The right tool can make all the difference.
Having trouble finding the best credit card for your specific situation? Use our Credit Card Match service to connect you with great offers.