How to choose the best credit card
The perfect credit card for Jack isn't the same one for Jill. Everyone's lifestyle, spending habits and priorities are a little different. So the best cards that match each person are different, too.
Here are a few things to reflect on to find your best fit:
- Your overall goals -- Start here. If you need a balance transfer card, don't get distracted by travel rewards. If you're after simple cash back, focus on cards that actually deliver it.
- Rewards fit -- Once you know your goal, match it to the right type of rewards (cash back, travel points, or flat-rate for everything cards).
- Spending habits -- Look at where your money actually goes each month and make sure it aligns with the highest rewards that a card offers.
- Annual fee -- Higher-fee cards can be worth it, but only if you'll actually use the perks.
- Intro APR -- Are you planning a large purchase or transferring a balance? Look for a 0% intro APR period that will allow you to accomplish your goals within the intro period.
- Welcome offer -- Big bonuses can be very lucrative, giving you an immediate return in the first year of ownership.
- Extra perks -- This could be like purchase protection, airport lounge access, or cellphone insurance.
You may find that you need two to three different credit cards to fully cover your goals. And that's totally normal!
Credit cards come and go over time, and our lifestyles change constantly. Pick the right card that fits your true lifestyle today, and you can always change later if circumstances shift.
Types of best credit cards explained
There's a reason "best" can mean different things for different people. Here's a quick overview of the categories and general explanation of the cards within them:
- Best for travel rewards -- Perfect if you've got a vacation itch. You can earn miles or points that are then redeemed for flights, hotels, or even seat upgrades.
- Best for cash back -- These cards are built to be easy and flexible. Cash back is the easiest redemption method, and you always know the true value of rewards.
- Best for balance transfers -- If you're carrying debt, a balance transfer to a 0% intro APR card period gives you breathing room to pay it down faster.
- Best for building credit -- Designed for beginners or rebuilders, these cards help you establish a healthy credit history.
Sometimes you'll find cards that shine bright in multiple categories. Like a travel rewards card that also offers a 0% intro APR period. When a card ticks multiple boxes, it can be a real win for your wallet.
How many credit cards should you have?
This is one of the most common questions we hear.
Our research shows that most Americans (56%) have just one or two credit cards. About 13% or people have three cards, and another 13% have four or more cards.
The right number for you -- is completely up to you!
Some folks do great with just one reliable all-rounder card. Others (like me and my wife) like a "two-card combo." One strong travel rewards card, paired with a workhorse cash back card for everyday spending.
What matters most is choosing cards you can manage responsibly. Pay them off in full each month, and you'll get the rewards without the headaches.
Tips for getting approved
Before you hit that "Apply" button, here are a few things to keep in mind. A little prep work can make all the difference:
Check your credit score first
Most credit cards list a recommended credit range, so make sure your credit score aligns before applying. You can check your score for free through many banks or credit apps. Or you can get a free credit report at AnnualCreditReport.com, the only site authorized by federal law.
While you're at it, it's also worthwhile checking your credit report for errors. Mistakes happen more often than you think, so fixing them can improve your creditworthiness.
Don't apply for too many, too fast
Applying for multiple credit lines in a short span can raise red flags for issuers. So it's best to space out new credit applications when possible. A good rule of thumb is to only apply for a new credit card every five to six months.
Lower your credit utilization
Credit utilization is how much of your available credit you're using. And it's a major factor in how your credit score is made up.
Experts recommend keeping your utilization under 30% across all cards. But honestly my recommendation is keeping it under 10% if you can.
Paying down your balances before applying for a new card can give your score a noticeable lift which can signal responsible usage.
Apply for the right card
Choose a card that truly matches your credit profile. If you're just starting out, a secured or student card may be a better fit than a premium travel card.
There are times when "fake it till you make it" is great advice. Applying for a credit card is not one of them.
Final thoughts
Credit cards can be powerful tools -- or costly traps. It all comes down to how you use them.
If you manage your cards wisely, you'll reap the benefits of valuable rewards, protections, and flexibility that can improve your financial life.
Take time to choose the right card, use it responsibly, and stay on top of payments. Rewards await!
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