Credit cards can be powerful tools to help you get cashback or travel points, but if you only have one credit card to choose from, how do you choose the right card?
There are five main things to look at when deciding which credit card is right for you – Sign up bonus, cashback categories, Annual fees, APR, and introductory APR.
When on a market for a new credit card, you want to see if there is a sign up bonus that might fit your needs. Some cards will offer a $200 sign up bonus after spending $500 or $1,000 in the first three months. Try to find a card with the highest sign up bonus and lowest required spend will be the best option.
Cashback categories are a very important aspect to consider. Different cards have different systems. Some cards have rotation 5% categories and a 1.5% back on everything else. Others have a 3%, 2%, 1% system where groceries may be 3%, gas 2%, and everything else is 1%. Find a card with categories that you will use. If you mainly buy online, try to find a high percentage back on online purchases.
Whenever you get a new credit card there will be an introductory Annual percentage rate (APR) and the standard APR. Most cards offer a 0% APR on the first 18 months which means if you carry a balance you will not owe any interest on that balance. Once that period ends though, you’ll be charged the standard APR on any balance. If you typically don’t carry a balance but need to for that introductory period, make sure to pay off your card before the introductory period ends.
The last thing to consider about a credit card is if there is an annual fee. Most cards do not have an annual fee, but more premium cards will have one. You may find that a card with an annual fee is best for you, but you may find that fee does not give you enough value.
Make sure to consider these five things when choosing a credit card!