How to Pick the Best Credit Card
If you know your options and ask the right questions, you can find the best fit for your spending habits and goals.
1. Check Your Credit
Find out what credit card offers you might be eligible for by checking your credit score. The better your score, the greater your chance of being approved for cards with better perks. Among ways to check your score:
- NerdWallet offers free access to credit scores.
- Many credit card issuers give cardholders free FICO scores.
- The three major credit bureaus (Experian, Equifax and TransUnion) sell credit scores.
If the number isn’t what you expected, check your credit reports to see what's causing the problem. You can then start figuring out ways to improve it, from changing your spending habits to disputing an error on your reports, if you need to. Federal law entitles you to one free copy of your credit report from each of the three major bureaus every 12 months. Get your free reports at AnnualCreditReport.com, a federally authorized site.
2. Do You Pay Off Your Entire Credit Card Balance Each and Every Month?
No judging here, but be honest with yourself.
- Do you religiously pay every penny of your credit card balance every month?
- Or do you sometimes use your credit card to pay off a big-ticket item or an over budget month over several months?
If you carry a balance—even sometimes—look at APRs first, then rewards.
This question matters. Because no matter how good the rewards on a credit card, you may save a lot more money by choosing a card with a lower interest rate, even if it doesn’t have rewards at all. If you carry a balance from time to time, look for the lowest APR first.
3. Pay Off Purchases Over Time Without Interest
If you have one or more expenses that will take you some time to pay back, 0% APR credit cards are just what you need. These cards offer a 0% intro APR (interest rate) on purchases.
If you're wondering how to choose a credit card with a 0% APR, look at the length of the zero-interest introductory period. It can last for a year or longer, depending on the card you get. Once it ends, the APR will increase, so you should aim to pay off your full balance by then.
4. Shop Around for The Best Credit Card Offers
Once you’ve decided which type of credit card meets your needs, it’s time to shop around for the best credit card offers. Consider bonus categories for rewards cards, length of intro period for 0% APR cards and credit tools for cards that help you build credit.
Plus don’t forget to factor in fees and interest rates into your decision. That includes annual fees, foreign transaction fees late payment fees and APRs.