How to Choose the Right Credit Card

Are you wondering how to choose the right credit card? This isn’t an easy task since there are so many available, and you’ll need to take into account various things such as your lifestyle, your needs, and the kind of card suitable for your credit score. Luckily, we’ve researched for you so you can find all the information you need below.

As mentioned, there are a few things you need to decide before picking the best credit card for you.

Check Your Credit Score

It’s imperative that you first check your credit score because it will determine which credit cards you can qualify for. If you’re looking to get a top reward credit card, you’ll need to have good to excellent credit. If your credit isn’t as good as you need it to be, be sure to spend time increasing your score before applying for a credit card.

Furthermore, every time that you apply for a credit card, you’ll incur a hard inquiry on your credit report, which will drop your credit score for the next two years. Doing this too many times may decrease your chances of getting credit approval in the future. You can, however, check if you prequalify for a card with an issuer by using their website — while this isn’t a guaranteed approval, it can give you a sense of how likely you are to be approved.

Choose a Card that Suits You Best

When you have a sense of where your credit score is, you’ll be able to focus on which card will work best for you. There are plenty of cards to choose from, so it’s best to weigh in on the pros and cons of each and understand how they will work with your budget, goals, and credit standing. In general, you’ll have a few categories to choose from.

  • Credit-building cards: These are great if you need more time to improve your credit. They also come in a few different types, such as student cards, secured credit cards, and unsecured cards.

  • Balance transfer cards: You can transfer debt from one credit card to a balance transfer card that has a lower annual percentage rate (APR), giving you the chance to save on interest and eliminate your balance.

  • Low-interest credit cards: This is a great fit if you need to carry finance expenses for the long-term while minimizing your interest charges. These cards come in two forms, either a 0% introductory APR on new purchases or at a lower rate compared to the usual credit card APR.

  • Rewards credit cards: These cards are typically available for those with good to excellent credit, where you can earn points or cash back through sign-up bonuses.

Pick a Credit Card that has the Best Value

When choosing the right credit card, you need to ensure that it provides you with the most benefits. Here are just a few things to look for:

  • Credit line increases: Look for a card that rewards responsible usage through credit line increases.

  • Earning interest from deposits: Some credit card issuers will put your deposit into a CD that earns interest, so you can get some of your money back.

  • Length of 0% offer: You can find some cards that offer this for as long as 21 months.

  • No late fees or penalty APR: If you fall behind on payments, you could be charged with a penalty APR or huge fees. If you’re worried about this, consider a card without fees.

  • Type of rewards: There are various kinds of credit card rewards, such as airline miles, cashback, and loyalty points.

  • Low or no annual fees: While rewards cards will offer great perks, they will often come with annual fees. If you don’t wish to pay annual fees, many other cards don’t come with a yearly fee.

  • Low required spending: If you’re aiming to get a rewards card, be sure to look for one that has a low spending requirement to get the most value from your card.

If you’re looking to get an idea of the credit cards available in the market, here are a few of the best ones along with important details.

Type of Card Best Airline Card Best Cash Back Card Best Flexible Travel Card Best Credit Card for Students
Name of Card United Club Infinite Card Chase Freedom Flex Capital One Venture X Rewards Credit Card Discover it Student Cash Back
Welcome Bonus Earn 120,000 bonus miles $200 bonus 75,000 miles Cashback Match
Annual Fee $525 $0 $395 $0
Regular APR 16.49% – 23.49% Variable 14.99% – 23.74% Variable 16.99% – 23.99% (Variable) 12.99% – 21.99% Variable
Credit Score Excellent (750 – 850) Good, Excellent (700 – 749) Excellent (750 – 850) Fair/New to Credit

Learn About the Terms and Fees of the Card

Before you get excited about which card you can get, there are a few more things that you need to familiarize yourself with to avoid the pitfalls that usually come with owning a credit card. Banks and credit card issuers make money by using fees and interest. Be sure to research these fees in advance to understand the added costs when applying for a new credit card.

Credit Card Terms and Conditions

The Credit Card Accountability Responsibility and Disclosure Act (CARD Act) of 2009 have helped to set the standard on credit card terms and conditions, making it much easier to understand them. The terms and conditions of a credit card will lay down all the fees and interest you may collect as a cardholder. This document will provide you with the most important details you need to know about your credit card, such as:

  • The APR for purchases

  • The APR for balance transfers

  • The APR for cash advances

  • The penalty APR

  • The grace period

  • Minimum interest charge

  • Annual fee

  • Fees for balance transfers

  • Fees for cash advances

  • Fees for foreign transactions

  • Fees for late payments

  • Fees for a returned payment

Interest rates

The interest rate for credit cards won’t be the same for each one. Some cards offer interest rates in the lower single digits, while others may charge a whopping 36%. Either way, a credit card’s APR should be one of the biggest considerations in your decision especially if you think you could incur a balance.

Fees

Much like interest rates, credit cards also carry a wide range of fees where you may encounter some of the most common ones such as:

  • Annual fees: These may range from $95 to over $550, but some prime credit card issuers may waive their annual fees in the first year.

  • Late payment fees: If you make late payments, you could be charged a fee that depends on how many times you’ve been late and on the issuer.

  • Cash advance fees: Cash advances should be avoided as much as possible because the fees associated with them can be huge — around 3% to 5% of the amount you withdraw.

  • Balance transfer fees: This can be a good option if you’re struggling to pay a high-interest credit card. The fees will usually be around 3% to 5% of your transfer amount.

Foreign transaction fees: Using your credit card outside the country will earn you a foreign transaction fee, which is typically around 3% for each transaction.

Rushed Decisions Can Be Expensive

Now that you know what to look for, and have some ideas as to what would be considered a good credit card to own, be sure to take your time to do the research. There are many online groups where you can ask other cardholders how their experiences with a particular card have gone. You’ll find most of the responses positive and helpful if you’re able to find the right groups. Reddit can be a decent resource for this. Quora also has some good answers to common credit card questions as well.

Also, have an idea of how you foresee yourself spending your money. Amazon, for example, has a pretty solid rewards program for shopping on Amazon. I found the terms reasonable and the points worthwhile. Therefore I chose to apply for credit and use the card and have found it a positive experience.

Conversely, in my early teens, I just wanted to have a credit card. I wound up with a dud from a fairly popular bank that provides credit on pretty poor terms. Had I taken the time to do the research I would’ve avoided the credit card altogether.

Good luck and I hope you find a credit card that works for you. Feel free to ask any questions or mention your favorite cards in the comment section below.

About the Author

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Client Credit Report Authorization

You hereby authorize and instruct Debt Reduction Services, Inc. (DRS, dba Money Fit by DRS) and/or its assigned agents to:
  • Obtain and review your credit report, and
  • Request verifications of your income and rental history, and any other information deemed necessary for improving your housing situation (for example, verifying your annual property tax obligations and homeowner’s insurance fees)
Your credit report will be obtained from a credit reporting agency chosen by DRS. You understand and agree that DRS intends to use the credit report evaluate your financial readiness to purchase or rent a home and/or to engage in post-purchase counseling activities and not to grant credit. You understand you may ask any questions pertaining to your credit report. However, while DRS will review the information with you, the company is not able to furnish you with a copy of your credit profile. You hereby authorize DRS to share your information from your credit report and any information that you provided (including any computations and assessments produced) with the entities listed below to help DRS determine your viable financial options.
  • Banks
  • Counseling Agencies
  • Debt Collectors
  • Landlords
  • Lenders
  • Mortgage Servicers
  • Property Management Companies
  • Public Housing Authorities
  • Social Service Agencies
Entities such as mortgage lenders and/or counseling agencies may contact your DRS counselor to evaluate the options for which you may be eligible. In connection with such evaluation, you authorize the credit reporting and/or financial agencies to release information and cooperate with your DRS counselor. No information will be discussed about you with entities not directly involved in your efforts to improve your housing situation. You hereby authorize the release of your information to program monitoring organizations of DRS, including but not limited to, Federal, State, and nonprofit partners for program review, monitoring, auditing, research, and/or oversight purposes. In addition, you authorize DRS to have your credit report pulled two additional times to conduct program evaluations. You also agree to keep DRS informed of any changes in address, telephone number, job status, marital status, or other conditions which may affect your eligibility for a program you have applied for or a counseling service that you are seeking. Finally, you understand that you may revoke consent to these disclosures by notifying DRS in writing.

Client Privacy, Data Security, and Client Rights Policy

NOTE: This sheet is to inform new or returning clients about our services, records, fees, and limitations that may affect you as a consumer of our services. This form also discloses how we might release your information to other agencies and/or regulators. If you do not understand a statement, please ask a Debt Reduction Services (DRS) counselor for assistance.

Debt Reduction Services, Inc. (DRS) has put into place policies and procedures to protect the security and confidentiality of your nonpublic personal information. This notice explains our online information practices and how we use and maintain your information to conduct our financial education and credit counseling sessions and to fulfill information and question requests. This privacy policy complies with federal laws and regulations.

To provide our financial education and credit counseling services, we collect nonpublic personal information about you as follows: 1) Information we receive from you, 2) Information about your transactions with us or others, and 3) Information we receive from your creditors or a consumer reporting agency. We do not share this information with outside parties.

We use non-identifying and aggregate information to better design our website and services, but we do not disclose anything that could be used to identify you as an individual.

You hereby authorize DRS, when necessary, to share your nonpublic personal, financial, credit, and any information that you provided (including any computations and assessments produced) with the following entities in order to help DRS provide you with appropriate counseling or guide you to appropriate services: third parties such as government agencies, your lender(s), your creditor(s), and nonprofit housing-related and other financial agencies as permitted by law, including the U.S. Department of Housing and Urban Development.

To prevent unauthorized access, maintain data accuracy, and ensure the correct use of information, we have put in place appropriate physical, electronic, and managerial procedures to safeguard and secure the information we collect online. We limit access to your nonpublic personal information to our employees, contractors and agents who need such access to provide products or services to you or for other legitimate business purposes.

Debt Reduction Services, Inc. complies with the privacy requirements set forth in the HUD housing counseling agency handbook 7610.1 (05/2010), including the sections 2-2 Mc, 3-1 H(2), 3-3, 5-3 F, and Attachment A.5. At all times, we will comply with all additional laws and regulations to which we are subject regarding the collection, use, and disclosure of individually identifiable information.

  1. Services: DRS provides the following housing-related services: counseling that includes Homeless Assistance, Rental Topics, Pre-purchase/Homebuying, and Home Maintenance and Financial Management for Homeowners (Non-Delinquency Post-Purchase); Education courses that include Financial literacy (including home affordability, budgeting, and understanding use of credit), Predatory lending, loan scam or other fraud prevention, Fair housing, Rental topics, Pre-purchase homebuyer education, Non-delinquency post-purchase workshop (including home maintenance and/or financial management for homeowners), and other workshops not listed above.

Please refer to DebtReductionServices.org for details of our services.

  1. Limits: Our services are limited to our normal weekday business hours. We do not provide individual counseling or education services after hours or on weekends, although our education courses are available 24/7.
  2. Fees: We do not charge fees for our financial management counseling and education. However, if you use them, you may have to pay for our Debt Management Program, Student Loan Counseling, Bankruptcy Certificate Services or certain financial education courses (homebuyer education, rental topics, fair housing, predatory lending, and post-purchase-non-delinquency including home maintenance and/or financial management for homeowners).
  3. Records: We maintain records of the services you receive, including notes about your progress or other relevant information to your work with us. You have the right to access and view your records by making a request to your counselor.
  4. Confidentiality: We respect your privacy and offer our services in confidence with the understanding that we may share such information with auditors and government regulators. Certain laws or situations may also lead to disclosing confidential issues, such as those involving potential child abuse or neglect, threats to harm self or others, or court subpoenas.
  5. Refusal of Services: You have the right to refuse services without any penalty or loss.
  6. Disclosure of Policies and Practices: You will be provided our agency disclosure statement.
  7. Sharing of Information: Sometimes we will need to contact other agencies or we may need to share your information, including your records, with other agencies or with regulators. We will do this only if you sign this form that gives us permission except for limited reasons; please see # 5 above for examples of such situations.
  8. Other: You have the right to be treated with respect by our staff, and we expect the same from you in return. We encourage you to always ask questions if something is not clear. We also encouraged you to express your thoughts and advocate throughout our services.

You acknowledge that this authorization will remain in effect for the duration of time that DRS serves as your housing counselor or financial education provider. You also acknowledge that should you wish to terminate this authorization, you will notify DRS in writing.

Disclosure  Statement

NOTE: If you have an impairment, disability, language barrier, or otherwise require an alternative means of completing this form or accessing information about our counseling services, please communicate with your DRS representative about arranging alternative accommodations.

Program Disclosure Form

Disclosure to Client for HUD Housing Counseling Services

Debt Reduction Services, Inc. and its financial education arm, Money Fit by DRS, offer the following housing counseling and educational services related to housing, personal finance, and bankruptcy certificates to consumers:
  • Housing Education Courses: DRS offers many online self-guided education programs classified as Financial, Budgeting, and Credit Workshops (FBC), Fair Housing Pre-Purchase Education Workshops (FHW), Homelessness Prevention Workshops (HMW), Non-Delinquency Post Purchase Workshops (NDW), Predatory Lending Education Workshops (PLW), Pre-purchase Homebuyer Education Workshops (PPW), and Rental Housing Workshops (RHW). These courses help participants increase their knowledge of and skills in personal finance, including home affordability, budgeting, and understanding the use of credit, as well as predatory lending, loan scams, and other fraud prevention topics, fair housing, rental topics, pre-purchase homebuyer education, non-delinquency post-purchase topics including home maintenance and/or financial management for homeowners, homeless prevention workshop, and other workshops not listed above relating to personal finance and housing. Course details are found below under “Housing Workshops.”
  • Home Equity Conversation Mortgage (HECM) Counseling (RMC): Via telephone and virtual platforms, we offer the required HECM counseling nationwide in addition to in-person counseling in Boise, Idaho. We also offer in-home counseling options in thirty counties across southern Idaho for an additional fee to cover our travel and additional staff time costs.
  • Home Maintenance and Financial Management for Homeowners (Non-Delinquency Post-Purchase) (FBC): Clients receive counseling and materials on the proper maintenance of their home and mortgage refinancing. Clients can find help and resources by phone, in our Boise office, or virtually on all topics related to stabilizing their long-term homeownership.
  • Services for Homeless Counseling (HMC): Clients receive phone, virtual, or in-person (Boise) counseling to evaluate their current housing needs, identify barriers to and goals for housing stability, establish a path to self-sufficiency, and connect with emergency shelters, income-appropriate housing, and/or other community resources (e.g. mental healthcare, job training, transportation, etc.).
  • Pre-Purchase Counseling (PPC): Clients receive counseling through the entire homebuying process. Assistance may involve creating a sustainable household budget, understanding mortgage options, building their credit rating, and putting together a realistic action plan to set and achieve homeownership goals.  Additionally, clients will receive materials and resources about home inspections and other homeownership topics relevant to successfully maintaining a home.
  • Rental Housing Counseling (RHC): Via phone, in-person appointments (Boise, ID), or virtual platforms, clients receive housing counseling relevant to renting, including rent subsidies from HUD or other government and assistance programs. Topics can also address issues and concerns having to do with fair housing, landlord and tenant laws, lease terms, rent delinquency, household budgeting, and finding alternate housing.
DRS also offers the following services:
  • A Debt Management Program (DMP) for consumers struggling to pay their credit cards, collections, medical debts, personal loans, old utility bills, and past-due cell phone accounts;
  • The Budget Briefing and Debtor Education Certificates that are required during the Bankruptcy filing process;
  • A Student Loan Repayment Plan Counseling and application service.

Relationships with Industry Partners

Through such services, DRS has established financial relationships with hundreds of banks, credit unions, and creditors such as American Express, Bank of America, Barclays, Capital One, Chase, Citibank, Credit One, Discover, Synchrony, US Bank, USAA, Wells Fargo, and others.

No Client Obligation

The client is not obligated to receive, purchase or utilize any other services offered by DRS or its exclusive partners to receive financial education or housing counseling services. Alternatives: As a condition of our counseling services, in alignment with meeting our client services goals, and in compliance with HUD’s Housing Counseling Program requirements, we may provide information on alternative services, programs, and products available to you, if applicable and known by our staff. Alternative DMP services include negotiating better repayment terms directly with your individual creditors, paying your debts as agreed, or, in extreme cases, filing for personal bankruptcy. Alternative credit and education services can be found through MyMoney.gov or the Jump$tart Clearinghouse of online financial education resources. Housing counseling alternatives can be found through HUD at www.hud.gov/findacounselor.
Finally, you understand that you may revoke consent to these disclosures by notifying DRS in writing.

Housing Counseling and Education Fee Schedule

 

Online Education Program Fees*

Homebuyer Education Course: $59 per participant

  • Self-paced course available here, our online housing counseling and education center. Certificates will be automatically generated upon completion of the course (approximately 6-8 hours)

RentalFair HousingPredatory Lending / HOEPAPost-Purchase (Non-delinquency post-purchase workshop, including home maintenance and/or financial management for homeowners) Online Workshops: $49 per participant

  • Approximately 1 hour each

Other Self-Guided Financial Literacy Webinars (e.g. creditbudgetinghomeless preventiondebt prevention): $0

One-on-one Counseling Fees*

Pre-purchase Homebuying Counseling, Rental Counseling, Post-purchase Ownership Maintenance and Financial Management: $75

  • Session by the hour

Reverse Mortgage/HECM Counseling with Required Certificate:

  • $200†

Credit Report Fee: Paid Directly by Client

*Fees for all but our online education courses and workshops can be paid online by debit card, credit card, or PayPal or in person by cash, check or money order to: “Debt Reduction Services, Inc.” Registration fees are non-refundable 24 hours or less before the start of an in-person course or workshop. Certificates are non-transferable

*Fees may be waived for households with income of 150% or less of that identified on the US Department of Health and Human Services Poverty Guidelines Page

†Home visit counseling is available in 30 southern Idaho counties for potential HECM borrowers at additional costs to cover our travel (IRS reimbursement rates apply) and staff time ($50 per hour or fraction there).

Housing Counseling and Education Fee Schedule

 

Online Education Program Fees*

Homebuyer Education Course: $59 per participant

  • Self-paced course available here, our online housing counseling and education center. Certificates will be automatically generated upon completion of the course (approximately 6-8 hours)

RentalFair HousingPredatory Lending / HOEPAPost-Purchase (Non-delinquency post-purchase workshop, including home maintenance and/or financial management for homeowners) Online Workshops: $49 per participant

  • Approximately 1 hour each

Other Self-Guided Financial Literacy Webinars (e.g. creditbudgetinghomeless preventiondebt prevention): $0

One-on-one Counseling Fees*

Pre-purchase Homebuying Counseling, Rental Counseling, Post-purchase Ownership Maintenance and Financial Management: $75

  • Session by the hour

Reverse Mortgage/HECM Counseling with Required Certificate:

  • $200†

Credit Report Fee: Paid Directly by Client

*Fees for all but our online education courses and workshops can be paid online by debit card, credit card, or PayPal or in person by cash, check or money order to: “Debt Reduction Services, Inc.” Registration fees are non-refundable 24 hours or less before the start of an in-person course or workshop. Certificates are non-transferable

*Fees may be waived for households with income of 150% or less of that identified on the US Department of Health and Human Services Poverty Guidelines Page

†Home visit counseling is available in 30 southern Idaho counties for potential HECM borrowers at additional costs to cover our travel (IRS reimbursement rates apply) and staff time ($50 per hour or fraction there).