Ever since the first credit card debuted in 1958, people have been using them as a convenient form of payment, whether for big-ticket items or small daily purchases. As credit cards have become increasingly popular, options have multiplied. If you are looking to open a new credit card, you may be wondering, “Which credit card is right for me?”
While there is no single perfect credit card that is the best one for everyone, you can follow a few steps to see if you can find the right card for you. There are several variables to consider, from rewards to interest rates. Depending on your answers to some of the questions below, you may be able to narrow down your options and decide on the right card to apply for and use.
Check Your Credit
One of the first things that you will want to do is check your credit score. There are a number of places where you can check your credit score for free once a year. Credit scores typically range from 300 to 850, from poor to excellent.
Understanding your credit score can help you determine which credit cards you might be able to get. The way credit cards work is that typically, the cards with the highest rewards and most benefits also require the best credit scores. If your credit is fair or poor, you are not likely to be approved for those credit cards, so it may not make sense to even fill out an application.
Recommended: Guide to Credit Score Ranges
Identify Which Type of Credit Card You Need
There are many different types of credit cards out there, so the next step can be identifying which type of credit card you are looking for.
• If you are looking for a rewards credit card that offers airline miles or other travel rewards, that can help narrow down your choices.
• Another option might be a credit card that earns cash back with every purchase.
• You might also compare interest rates and see which offer is most attractive to you.
• If you are working on building your credit, there may be a student or secured credit card to suit your needs.
Understanding the different types of cards that are available can help you choose the right credit card for your specific situation.
Narrow Your Choices by Asking the Right Questions
As you make your decision about which credit card is right for you, consider these points:
• Some credit cards offer higher rewards in specific bonus categories, while others may offer a flat rate on all purchases. If you make a lot of purchases at grocery stores, gas stations, or home improvement stores, you may want to get a credit card that offers higher rewards rates in those categories.
• If you have more balanced spending, it might make more sense to get a credit card that offers a high rewards rate on all purchases, no matter where you spend. Many people like using cash back rewards, among the various redemption options.
• You’ll also want to look at any annual or other fees associated with a card to make sure you are getting enough in value to offset the cost of any fees you have to pay. It can sometimes make sense to have a credit card with an annual fee if the benefits are worth it to you (say, you travel a lot, and the card offers access to a network of posh airport lounges). That said, there are many excellent credit cards that do not charge an annual fee.
• If you are focused on building your credit, see which secured credit cards are available. These cards involve a cash deposit that serves as collateral in case you can’t make a payment.
Recommended: Understanding Purchase Interest Charges on Credit Cards
Apply for the Credit Card That Offers You the Highest Value
Once you’ve figured out what kind of rewards you want to earn and what card you are likely to be approved for given your credit history, you can look at a few cards that fit those criteria. Compare interest rates, and consider the three main reasons you might consider applying for any particular card:
• The value of the rewards you will earn with everyday purchases.
• How much you might get from any one-time initial credit card bonus offers.
• Any perks or benefits you receive just from having the card.
Carefully review each of these benefits for any cards you are considering and then apply for the card that gives you the best value.
Credit Card Tips
Once you’ve received your new credit card, these tips may help as you use it:
• Set up a plan to pay it off in full each and every month if possible. Interest rates on your balance tend to be steep, so avoid paying those costs as best as you can.
• While you may be able to pay your credit card with a debit card in some instances, it will likely be easier to set up your credit card account to automatically be paid from your bank account.
• If you’re using this new card to replace a previous card, you may want to update any automatic bill payments to use your new card information.
• If your bill is due right before payday, call the issuer and see if you can shift the date by which payment is needed. Some card issuers can accommodate this request.
The Takeaway
There are hundreds of different credit cards out there, and each one comes with their own terms and perks. If you’re curious about “Which credit card is right for me?” know that there isn’t a single credit card that is the best credit card for everyone — instead, you’ll have to analyze the options and pick the best one for you.
Carefully review which cards you’re likely to be approved for, the rewards and benefits of each one, and any annual fees associated with the card to find the one that’s right for you.
Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.
FAQ
How do I know what credit card is right for me?
There are a couple of different questions you’ll want to ask yourself to help decide which credit card is right for you. First, check your credit score, and look for a card that targets users within that credit score range. Then look for a card that offers rewards or benefits that you will find useful; also review whether an annual fee is charged.
How do I choose which card to use?
When you go to use your credit card, check to see which of your cards offers the most rewards for that type of purchase. If you have a card that offers a bonus rewards rate for those types of purchases, that could be a good one to use. Otherwise, use a credit card that offers a high rewards rate on all purchases.
Which credit card do most millionaires use?
It’s hard to say which credit card is most popular with millionaires, since that information is not generally considered public. However, it’s probably a safe bet that many millionaires might look for cards that offer a high level of benefits though they charge high annual fees. This might include The Platinum Card from American Express, the Chase Sapphire Reserve, or the Capital One Venture X card.
Photo credit: iStock/AscentXmedia
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
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