Choosing the Right Credit Card

by: Bryan Dufresne

Overwhelmed by all of the available credit card offers?

There are hundreds of credit card offers to choose from and chances are you already have one or more them.

All of the credit cards offer some form of incentive whether it is a free flight or just a low annual percentage rate. Doing some comparison shopping up front will go a long way in finalizing you decision.

First there are a few key questions you need to ask yourself:

Do you plan on carrying a balance? - Generally cards that offer reward incentives carry a higher APR, if you don’t plan on carrying a balance then this does not affect you. Also many of the rewards programs have restrictions on them when you miss a payment or when your account is not in good standing.

Where are you going to make the majority of your purchases? - What do you use your credit card for? Is it general retail spending? Do you travel a lot? Depending on your spending habits it may be beneficial to hold multiple cards, one for travel and one for general spending.

Are you adding a card to your portfolio or replacing one? – If you are looking to replace a card you currently have, you want to ensure that the new card allows balance transfers; you will also want to investigate the fees associated. Many cards offer a zero interest introductory rate on balance transfers. Some offer zero interest until the balance is paid off – a very attractive incentive if you are transferring a large sum.

Reward Programs

There are an array of reward programs to choose from however there are three main categories, miles, points and rebates.

Miles – You earn Miles for airline ticket purchases or other predetermined purchases

These cards are designed for the “frequent” flyer. If you do not fly often and are hoping to earn a trip with one of these cards think again. Miles cards almost always have a $75 - $100 annual fee. By the time you earn a flight through retail spending you will have paid this fee a few times. Generally the airline associated with the card with offer double points when you fly with them.

People who use airline travel frequently can definitely benefit for this type of rewards program despite the annual fee.

Points – You earn a predetermined ratio of points to dollars spent on purchases

Without a doubt this is the most popular of the rewards systems. With many variations, all of the points systems have one thing in common. In the end you are trading your points for a product or service the issuer makes available in their rewards program. Gift cards have become a popular points reward among the major issuers.

These cards are designed for people who do a lot of retail spending. If you have a favorite store find out if there is a credit card that will reward you for shopping there.

Rebates – You are reimbursed a predetermined percent of your purchase

These cards offer the most straight forward rewards – Cash back in your pocket. The general cash rebate cards offer around 1% - 2% on all of your purchases. Yours saving a percent on everything you buy with the card. Some offer introductory cash rebate percentages as high as 5%.

There are also more specific rebate cards for gas, hotel, auto, etc…This is and excellent way to track and control spending while receiving a rebate on frequently purchased products or services

If you want someone else to benefit from your spending there are also cards that offer charitable rewards for health related and environmental causes. When you make a purchase with the card a predetermined percent or amount is donated.

Keep this in mind. All of the rewards, points, miles and introductory rates are only as good as your credit habits. Missed payments often void your introductory rates and many times will negate the rewards you have earned. Always read the issuers detailed terms and conditions before applying for a card so there will not be any surprises

The best way to find a card that is right for you is through our online directory. You can browse and compare credit card applications from all of the major issuers.

About the Author:

Bryan Dufresne is a writer for Cardpick.net the top credit card applications website on the internet.