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With the advent of online credit card applications, getting a credit card can be as easy as 1-2-3. Finding the best credit card for you can be a bit more complicated, however. There are many different reasons people apply for a credit card, and which is the best card varies accordingly.
Here are some of the main reasons people apply for credit cards as well as tips for finding the best card in each category.
If You’re Looking for Better Rewards or Credit Card Perks
According to a survey done by Bankrate.com, almost one in three people (29 percent) who apply for a credit card online already have a credit card, but are looking for a card with better rewards or perks.
• If you wonder how to choose the best rewards credit card, look here for some advice on how to compare rewards credit cards (Tip: make sure you compare apples to apples).
• If you don’t want to spend time looking around, here are our pick for the best travel rewards credit cards, hotel rewards credit cards, or cash back credit cards.
• In the wake of the credit crisis, many reward cards issuers have introduced tricky new clauses, so read here to stay up to date on how to get the most out of your rewards credit cards.
If You’re Looking for Credit Card with a Better Interest Rate
Wanting a better credit card interest rate is the second most common reason people apply for a credit card, according to the Bankrate.com survey. About one in four people (24 percent) applying for a credit card are looking for a card with a lower APR.
Getting the best low interest credit card takes a little planning. Here are some recommended strategies:
• Take steps to improve your credit score before applying. This will ensure not just that you get accepted, but also get offered the lowest APR that the card comes with.
• Build a long-term relationship with low interest credit card issuers that start people out with a low credit limit, which increases over time.
• Look in unusual places. The best low interest credit cards are not always where you’d expect to find them.
If You’re Looking for Better Terms or Customer Service
Almost 1 out of every 5 people (19 percent) applying for a credit card are looking for better terms or fewer fees, according to the Bankrate.com study. Another 14 percent are looking to do business with a card issuer that offers better customer service.
The Credit CARD Act of 2009 was supposed to improve credit card terms across the board. Still, some issuers have been finding ways around many of the key terms of the Act, so differences abound both in credit card terms and how “user-friendly” cards are.
• Stay on top of the latest credit card tricks by e.g. following consumer groups like the Pew Trust Safe Credit Card Project, which closely follows changes in the industry in the wake of the Credit CARD Act.
• Check out a credit union cards like the Pentagon Fed Visa or American Express cards. Studies consistently show that credit cards issued by credit unions excel not just in offering better terms and lower fees, but generally speaking also offer better customer service.
If You’re Looking for a 0 APR Balance Transfer
According to the Bankrate.com survey, one in ten of people who apply for a credit card are looking to do a balance transfer, in most cases a 0 APR credit card offer.
• Balance transfer offers are not what they used to be. Look here for tips on how to get to get the best 0 APR deals (and what to do to keep the rate at 0 APR!)
• If you have good credit, consider this selection of good balance transfer offers.
If You’re Looking for Additional Credit or a First-time Credit Card
According to the Bankrate.com survey, 5 percent of people applying for a credit card are looking for additional credit, and another 5 percent are looking to apply for a credit card for the very first time. If you fall into either of these two categories, here is some useful advice.
• To get a credit card for the first time, take some simple steps to build a credit history.
• If applying for additional credit, be sure you understand how credit card balances impacts your credit score.
• If your payment history is good, consider simply requesting a higher credit limit with your existing card issuer.
• If looking to get additional credit because you are close to maxing out existing credit cards, perhaps take a moment to consider if you have too much credit card debt and/or research ways that you might instead cut back on credit card debt.
