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Johnstocker/Adobe Stock September 30, 2022 Meredith Hoffman is a personal finance writer covering credit card news and advice at Bankrate. She is originally from Columbia, S.C., and received her bachelor's degree from the Univ. of North Carolina at Wilmington. Before joining Bankrate in October 2019, Meredith worked as the news editor of Wilmington’s local newspaper, The Seahawk. Mariah Ackary is a personal finance editor who joined the Bankrate team in 2019, excited by the opportunity to help people make good financial decisions. Send your questions to Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Terms apply to the offers listed on this page. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Bankrate logo The Bankrate promise
At Bankrate, we have a mission to demystify the credit cards industry — regardless or where you are in your journey — and make it one you can navigate with confidence. Our team is full of a diverse range of experts from credit card pros to data analysts and, most importantly, people who shop for credit cards just like you. With this combination of expertise and perspectives, we keep close tabs on the credit card industry year-round to: Meet you wherever you are in your credit card journey to guide your information search and help you understand your options. Consistently provide up-to-date, reliable market information so you're well-equipped to make confident decisions. Reduce industry jargon so you get the clearest form of information possible, so you can make the right decision for you. At Bankrate, we focus on the points consumers care about most: rewards, welcome offers and bonuses, APR, and overall customer experience. Any issuers discussed on our site are vetted based on the value they provide to consumers at each of these levels. At each step of the way, we fact-check ourselves to prioritize accuracy so we can continue to be here for your every next. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. These days, credit card applicants have plenty of great options to choose from. Ironically, having so many options can make the decision quite difficult. What kinds of perks should you be looking for? Are annual fees worth it? To simplify the process, we’ve laid out four steps to help you find the ideal credit card for your spending habits and your financial goals. 1 Check your credit score
Most of the top rewards credit cards require at least , but there are also cards for people with just and even cards for consumers who have . Why not just apply for a bunch of cards until you get accepted? Any time you apply for a new credit card, you’ll incur a on your credit report, which will temporarily drop your credit score and remain on your credit report for two years. Additionally, having several hard pulls in a short time could hurt your chances of getting approved for cards in the near future. Luckily, there are lots of . If your credit doesn’t look as good as you hoped, spend some time improving it before you apply for a credit card. For the most part, the most effective (and easiest) include paying all your bills early or on time and paying down debt to lower your credit utilization. 2 Decide what you want a credit card to do for you
Once you know which types of cards you can qualify for, it’s time to start being choosy. What do you want a credit card to do for you? Build your credit score? Earn rewards? Generally, credit cards fall into one of the categories below. Lightbulb Bankrate Insight Not sure which type of card fits you best? Find out with Bankrate’s . Need to improve your credit score Get a credit-building card
Responsibly using any credit card will improve your credit score, but there are credit cards specifically designed for people with bad credit or limited credit history. They tend to be relatively easy to qualify for. Here are our picks for the and the . Credit-building cards come in a few basic types, most notably , unsecured credit-building cards and . Secured cards work like traditional credit cards, with one major difference — they require you to put down a security deposit when you become a cardholder. Your deposit is typically equal to your credit limit and is refundable when you close the card or . If you decide to go this route, here are our picks for the . , as the name implies, do not require a security deposit. With no deposit required, approving consumers for these cards is riskier for lenders. As a result, unsecured credit-building cards often carry higher fees and lower credit limits. For this reason, we recommend a secured credit card instead if you can afford the security deposit. Student cards can be either secured or unsecured and are typically available only to current students. The tend to carry lower fees than general credit-building cards and often come with perks that favor students. Need to pay off existing debt Get a balance transfer credit card
are ideal if you need to pay off debt. You can transfer debt from one or more credit cards to a balance transfer card with a lower APR and get a chance to chip away at your balance and save on interest charges. These cards typically offer either a lower-than-average or on balance transfers for at least the first several months and often more than a year. During this period, you can contribute more money toward your principal balance and less toward interest charges. Be sure to have a payoff plan in place before you start, as any balance that remains at the will be subject to the card’s regular APR. If your current credit card has a high interest rate, a with a low or 0 percent introductory APR can be a lifesaver as you work to pay down your debt efficiently and at a lower cost. However, you’ll typically need good-to-excellent credit to qualify. These cards may not offer rewards or many perks, either, as the introductory APR is the primary benefit. Need to finance a new purchase Get a low-interest credit card
A low-interest credit card is a good fit if you need to finance expenses over time while minimizing interest charges. These cards tend to come in two major forms, offering either a lower ongoing rate than the or a 0 percent introductory APR on new purchases. A card with a promotional APR on purchases will make the most sense if you have major expenses — such as a home repair, move or renovation — on the horizon and would like to pay them off over time while avoiding interest. Promotional APRs on new purchases typically last 12 to 18 months, after which any remaining balance is subject to the card’s regular APR. Meanwhile, if you plan to carry a balance long-term (longer than a year or two) or if you generally carry a balance from time to time, you should focus less on the introductory rate and more on the ongoing APR. Some of the offer variable APR ranges that start around 14 percent. That might not sound low, but the average credit card APR is now over 18 percent. Credit requirements for these cards vary, but you’ll usually need at least good credit to secure a decent ongoing APR. Ready to earn points miles or cash back Get a rewards credit card
Typically reserved for those with good-to-excellent credit, rewards credit cards are best suited to cardholders who already have good credit and want to earn cash back or points via sign-up bonuses and purchases. There are several . typically earn a percentage back on your spending, which you can redeem for cash in the form of a direct deposit or accumulate points instead of dollars as you spend. You generally have the option to redeem your points for cash back, travel, merchandise and more. rack up — you guessed it — airline miles as you spend. You can redeem them for flights, usually with a particular brand. The amount of rewards you earn on each purchase can vary. Some cards offer a flat rewards rate on all of your spending, and others offer bonus rewards in certain categories of spending, like groceries or dining. Here are our picks for the . To decide which is the best fit for you, think about your spending habits and how much work you’re willing to put into . Do you spend a lot in one specific category? Are you willing to track and enroll in bonus categories every quarter? What about and using different ones for different purchases? Or would you rather just earn at the same rate on everything you buy? 3 Pick the card that offers the best value
Beyond the type of credit card, we recommend choosing a credit card with benefits and features that are relevant to you. Here are some perks to look for: Secured and student credit cards
Credit line increases: When considering a secured credit card, look for options that reward responsible usage with periodic credit line increases. Graduation: The ultimate goal of getting a secured credit card is to eventually have good enough credit to get an unsecured card. Some secured cards make this transition easier by allowing you to — no new application needed — when your credit improves. Low interest and 0% APR credit cards
Length of introductory 0 percent offer: No credit card offers 0 percent interest indefinitely, but you can find some top cards that offer 0 percent introductory periods that are up to 21 months long. No penalty APR or late fees: If you fall behind on your payments, some credit card companies will charge costly fees or a penalty APR. If you are concerned about your ability to pay your balance every month, consider looking for a card without these fees. Rewards cards
Type of rewards: There are many types of credit card rewards, including , airline miles and points. Cash back is simplest for most, but you may get more bang for your buck by redeeming points. Low required spending: Some rewards cards require you to meet a certain spending limit before qualifying for bonuses or special offers. If you are considering a rewards card and want to earn its sign-up bonus, for instance, take note of the spending requirement to make sure you will get the best value out of your card. No (or low) annual fee: Rewards cards offer the best perks, but many have annual fees. The rewards will often outweigh the burden of an annual fee, but there are also plenty of cards available with no yearly fee. 4 Familiarize yourself with interest rates and fees
Credit card issuers make money through interest and fees. Federal law requires that all credit cards disclose their interest rate fees in advance, so it’s important to research these added costs before applying for a new card. Interest rates
Interest rates on credit cards can vary significantly. Some cards may offer interest rates in the single digits, while others may charge up to 36 percent. A card’s APR should be a defining factor in your decision-making process, especially if you think you may have to carry a balance. Fees
Different types of credit cards charge various fees. Some of the most common you may encounter include: Annual fee: Many credit cards come with annual fees that typically range anywhere from $95 to $550 or more. Some issuers of prime credit cards will also waive their annual fees in the first year of card ownership. And sometimes . Balance transfer fee: If you already have a credit card and you’re struggling to pay off high-interest credit card debt, a balance transfer card could be a good option for you. are typically 3 percent to 5 percent of your transfer amount, often with a minimum of $5 to $10. Late payment fee: If you pay your credit card statement late, you could be . These fees differ depending on the issuer and the number of times you have paid your balance late. Cash advance fee: A cash advance is when you take money out of an ATM using your credit card. whenever possible. Fees associated with cash advances can be high — typically 3 percent to 5 percent of the amount withdrawn. You’ll also be charged interest on a cash advance right away, often at a higher rate than your regular APR. Foreign transaction fee: When you use your credit card outside of the U.S., you may be charged a . These fees typically cost around 3 percent per transaction. If you’re an avid traveler, consider credit cards that don’t charge foreign transaction fees. The bottom line
With so many different types of credit cards available, it can be hard to find the right one for your needs. It pays to do a little research and then to find the best fit for you. Once you decide what features and benefits are important to you, the decision becomes a bit easier. SHARE: Meredith Hoffman is a personal finance writer covering credit card news and advice at Bankrate. She is originally from Columbia, S.C., and received her bachelor's degree from the Univ. of North Carolina at Wilmington. Before joining Bankrate in October 2019, Meredith worked as the news editor of Wilmington’s local newspaper, The Seahawk. Mariah Ackary is a personal finance editor who joined the Bankrate team in 2019, excited by the opportunity to help people make good financial decisions. Send your questions to Related Articles