Credit cards are an extremely useful tool for building credit and earning rewards, but only if you use them correctly. If you’re new to credit cards and looking for the right one for your financial situation, it’s important to do some research first. In this post, you’ll go over what makes a good credit card in terms of features and interest rates and how to find the right one based on your needs.
Know your credit score
The first step in selecting a credit card is knowing where you stand. Getting approved for a credit card will be difficult if you don’t have a score. It’s a numerical representation of your creditworthiness. Lenders use credit scores to determine whether to extend credit to you and at what interest rate. They’re based on information in your credit report, which records your past borrowing activity.
Learn about the types of cards that are available
Before you start searching for a credit card, learning about credit card comparison is important. There are many different types of rewards credit cards, but some common ones include cash back, points and miles.
Cashback cards let you earn cash back on your purchases. You may earn 1% or more on every purchase. Other cards have higher reward rates for certain categories like travel booking sites or gas stations.
Point-based programs give you points when you make purchases with their affiliated retailers, which can be redeemed for gift certificates or other rewards later in life.
Read the fine print
Before signing up for any credit card, it’s important to read the fine print.
- The terms and conditions are listed on a card’s website or in your credit union’s brochure. Make sure you understand these terms and conditions—and that they’re something you can live with.
- Don’t be afraid to ask questions! It probably is if a balance transfer sounds too good to be true. Ask if hidden fees or charges are associated with your new credit card before signing up for one.
- If a company tries to pressure you into signing up for their product by saying that interest rates will increase after six months or some other time period, know that this is not necessarily true.
Use a credit card comparison tool
If you’re looking for the right rewards credit card, there are several tools out there that can help. This tool allows you to compare cards based on your own financial needs and preferences. For example, you can search for specific types of rewards or compare all available offers from different issuers at once. You can also see how much you’d have to spend per month in order to reach bonus points, cashback bonuses and other special perks offered by some cards.
According to Lantern by SoFi experts, “Generally, credit cards have more protections than debit cards, and using a credit card responsibly can help you build a good credit history.”
With these tips, you can find a card that fits your needs. Using a credit card comparison tool is recommended to help sort through all the options available to you. You can compare different cards based on their features, interest rates and fees so that you know what kind of card is best for your situation before applying for one.