If you’re looking to pick up a new credit card, you have a ton of options. But just which of those options is the right one for your financial situation? To decide, you’ll want to take a close look at the cards being offered and consider how well each of them fit your financial needs. But instead of letting you get bogged down in credit card fine print, we’ll walk you through the most important considerations to help you pick out the best card for your needs.
Are you likely to run a balance?
If you think you’ll regularly run a balance, then you want to look for a card with the lowest possible interest rates to avoid racking up big credit bills. Cards with the lowest rates typically don’t have any kind of rewards program and may require good credit to qualify. If you want to keep your overall costs low, you’ll probably want to look out for cards with few or no fees — though be warned, cards advertised as “no fee” can have unfavorable interest rates, so be sure to read the fine print (and the Schumer Box ) before you sign on the dotted line.
Are you transferring balances to consolidate your credit card debt?
If you’re transferring existing balances to a new card (ideally with a low interest rate), you’ll want to look for a card with low or no balance transfer fees, which will let you move your balance from one card to another without any extra cost. Some cards will have higher interest rates for balance transfers — so look for cards with lower interest rates for transfers or cards with low introductory interest rates for all transactions or for balance transfers in particular. If you shop around, you may be able to find a card that makes transferring your balance an appealing way to save on interest payments — but be sure to confirm what your interest before you decide to transfer a balance
Are you in it for the rewards?
If you’re looking to earn from credit card rewards. it’s important to consider what kind of rewards you’ll use: whether you’d benefit more from a card that gives you airline
miles or a card that gives you cash back is entirely based on your spending habits. If you travel often, a card that rewards you with airline points or hotel stays can be a good choice — but if you don’t travel often, you may be better off with a card that offers cash-back or more everyday rewards. Which kind of rewards card is right for you? Only you can answer that question, but be sure to take time to read the fine print on just what a rewards program offers before pick a card. Look for rewards you’re likely to use as those will give you the most value.
Do you travel internationally?
If you often find yourself overseas, you’ll want to make sure you have a card without a foreign transaction fee. These fees typically run 3% or more of each purchase made overseas — which can really add up if you’re using your card while abroad. Fortunately, PenFed’s card lineup has plenty of options that don’t include a foreign transaction fee, making it easy to buy no matter where you are.
What’s your credit score?
Some cards, especially cards with low rates or great rewards, may require a certain credit score to qualify. Before you start applying for cards, it’s a good idea to check your credit score — PenFed customers can see their FICO® score for free — to give yourself an idea of whether or not you’re likely to be approved. If your credit score isn’t so great, you may not be able to get the cards with the best rates, so bear that in mind when you start your credit card hunt.
Do you have low or no credit?
If your credit isn’t the best, you may have to live with the idea that the cards with the best rewards and lowest interest rates may just not approve you. However, you have to start building your credit somewhere, and a credit card is a good place to start. Look for secured cards, which require a deposit (typically equal to your credit limit), which will let you, start building your credit. Students may also find offers for student-specific credit cards that are easier to qualify for.