Published in: Credit Cards | Oct. 9, 2019
5 Steps to Finding the Perfect Credit Card
By: Christy Bieber
Do you have the right credit card in your wallet? If you're not sure, just take these steps to find the card that's perfect for you.
Picking the right credit card can make a whole lot of difference when it comes to your financial life. Credit cards can be used for everyday purchases and help you earn generous rewards for spending you'll do anyway. Or they can get you into serious trouble with debt and cost you a fortune in interest.
You want to make sure you pick a card that helps rather than hurts you. But that can be easier said than done. The good news is that by following just five simple steps, you can find the perfect credit card to keep in your wallet.
1. Know why you are getting a credit card
Different credit cards are good for different things. Some cards offer 0% promotional APRs on transferred balances and are a great option if you want to use your new card to consolidate existing debt. Others offer a 0% APR on purchases when you first get the card (which can be ideal for financing a big purchase over time) or offer a low APR as a standard feature. Still others provide generous rewards or a hefty signup bonus for new cardholders.
Think about what you hope to accomplish with your new card so you can narrow down your search based on the features that are most important to you.
2. Consider whether you'll ever carry a balance
If you won't carry a balance on your new credit card, you're free to ignore any potential card's APR and focus on other features such as rewards, the signup bonus, or perks like airline lounge access.
But if you tend to get into credit card debt and get stuck paying interest, a low APR needs to be your top priority. That's because no card rewards or perks can make up for the cost of interest on a card with a high APR.
3. Analyze your spending
Unless you're going to carry a balance and need to get the card with the lowest APR, you'll want to focus on maximizing the rewards a card can provide for the spending you do. That means you need to know what you're spending the most on so you can get a card that's a good match.
Look back at your spending patterns over the past several months to see where the bulk of your charges are made. If you adore dining out and spend most of your monthly money at restaurants, you'd want to look for a card that provides bonus rewards or cash back for dining out. But if you're a jetsetter and all your charges are for airports or hotels, a travel card with bonus rewards for trips would be a better fit.
If you're hoping to earn a signup bonus for getting a new credit card, you also need to look at how much you spend each month. A card that promises a $500 signup bonus may seem attractive, but if you need to spend $3,000 in the first three months to qualify and your monthly spending usually tops out at around $500 per month, you probably wouldn't be eligible. You might be better off with a card that offers a smaller signup bonus but that has a lower spending requirement to get it.
4. Look at your lifestyle
Credit cards don't just offer rewards for spending -- many offer other special perks or features as well. These perks could include things like free companion airfares; free nights in hotels; extended warranties on purchases; or statement credits for Uber rides.
Think about what types of benefits and perks would be of the most value to you, given what you enjoy doing. If you like to shop online and hate to travel, for example, you may want to sign up for a credit card that offers extended identity theft protections, assistance with returns, and free shipping on hundreds of websites. But if you fly somewhere every month, a card with access to an airline lounge would be a way better fit.
5. Compare credit card offers
Once you know what you're looking for in terms of rewards, cardholder perks, and APR, you can search for a credit card that is an ideal fit for your particular needs. Our picks for the best rewards cards or best cash back cards are a good place to start.
Finding the perfect card is worth the effort
Taking the time to find the perfect credit card is well worth it. When you have a card in your wallet that's a good fit, you can keep interest costs down, maximize your rewards, and make sure you're taking full advantage of cardholder perks that could be worth thousands.
Our #1 cash back pick has a surprise bonus
This may be the perfect cash back card! That's because it packs in $1,148 of value. Cardholders can earn up to 5% cash back, double rewards in the first year, and avoid interest well into 2020. With such a deep bench of perks you'll wonder how this card packs in a $0 annual fee. Best yet, you can apply and get a decision in two minutes. Learn more with our in-depth review.