Whether you’re looking for your first credit card or another credit card, there are innumerable factors to consider. But a good place to start is honestly assessing your circumstances.
Check out our flow chart for a quick guide – and read on for in-depth advice for specific scenarios.
Just remember: Wanting a certain type of card won’t be enough — you’ll need to meet the issuer’s credit requirements. It’s also vital to read the card’s terms and conditions as well as in-depth card reviews before applying and accruing a credit inquiry.
SCENARIO #1: I want to start building (or rebuilding) my credit
The best card for you will depend on whether you’re a student. If you are, issuers have special options for you. If you’re not and you still need a credit leg-up, consider a secured card. Because you’ll have to make a deposit to secure the credit line, issuers may be willing to take a chance on you – and let you work your way up to a regular card.
SCENARIO #2: I want to carry a balance
Interest charges on even a modest balance will cancel out rewards, so if you plan on regularly carrying a balance, don’t even think about rewards. Your goal should be minimizing finance charges until the debt is gone.
Some cards offer 0 percent interest periods on balance transfers and purchases, giving you as many as 18 months to clear your debt. If you plan to carry a balance outside the intro period, go for a card that has a permanently low APR.
SCENARIO #3: I want rewards, but I don’t want to obsess about maximizing them
Cash-back cards are probably the best fit. Since you’re accumulating cash, you won’t have to worry about fluctuating reward value. Depending on the card, you can put the money in the bank, or use it to cancel out purchases.
Which cash-back card you choose depends on where you spend your money. If you spend a lot in everyday categories like groceries or gas, consider a card that gives extra cash back on groceries and gas. If not, go for a card that gives you a little extra on everything. The Citi Double Cash, for example, gives you 1 percent back on all purchases and then another 1 percent back when you make a payment.
SCENARIO #4: I want rewards, and I don’t mind making a hobby out of maximizing them
You’ll want a card tied to a flexible redemption program. Examples include Membership Rewards from American Express (a CreditCardForum advertising partner) and Chase Ultimate Rewards. Both programs allow you to redeem for merchandise, cash, travel and, in some cases, real frequent flier miles in various programs. Redemption value will vary, depending on which option you choose, but, if you’re strategic, you can yield greater returns than you would with a cash-back-only card — especially if you convert your rewards to airline miles.
Scenario #5: I travel a lot, and I want to be rewarded for it
A travel rewards card is what you’re after. There are basically two breeds of travel rewards card. Co-branded airline and hotel cards let you accrue miles or points toward free stays within the associated chain. Generic travel rewards cards, meanwhile, let you accrue what amounts to cash back that can be used to cancel out nearly any travel expense. Go here to figure out which is best for you.
If you travel in style (or travel frequently for business) and want perks like lounge access, TSA PreCheck, companion tickets and hotel upgrades, go for a premium travel rewards card. Well-known examples include the Citi Prestige and the American Express Platinum.
Once you’ve found your ideal match, consider branching out. Many cards work best in pairs, assuming you can manage them responsibly. Go here to see the credit card combos we recommend.