Getting a New Credit Card: Key Considerations

People who have good to excellent credit scores generally have a lot of options when it comes to choosing a credit card. (In contrast, if you have poor credit, then your choice of credit cards will likely be quite limited.)  But not all credit cards are created equal.  There can be very significant differences between cards, with some being much better than others in certain ways and some being much better suited for certain uses than others. For these reasons, you do not want to necessarily take the first credit card offer that comes along. Instead, it is important that you shop around and select a card that may be best suited for your lifestyle and for your particular needs and wants. In this article I will briefly discuss some of the key things to consider in making a decision about which credit card(s) to get.

 How Many Credit Cards?
First of all, if you already have a number of credit cards, you should begin by asking yourself whether you really need to get another one or whether you can make do with your current ones.  Having too much available credit can actually work against you by lowering your credit score.  Remember that your credit score will affect not only your ability to get credit or to borrow money, it will also affect the interest rates that you will be able to get. Typically, people with better credit scores pay significantly lower interest rates. If you are unhappy with one of your existing cards for whatever reason,  before adding yet another credit card, you should consider simply closing that unsatisfactory account  and then opening a different one in its place.

Interest Rate
Secondly, if you plan to carry a balance on your credit card from month to month on a regular basis, it will be very important for you to get a card with a low annual percentage rate (APR). Even if a card offers an introductory 0% interest rate for six months or year, when the APR jumps up to its normal 21% or higher, you could end up paying a significant amount in interest each month for years to come. On the other hand, if you intend to always pay off your balance every month (as many financial experts recommend), then you would be okay getting a higher interest rate card in order to take advantage of other perks that that card might offer.

Card Fees
Third, you need to consider the types and amounts of various fees each card will charge.  Some charge an annual fee just for having the card, while others have no annual fee. If a card charges an annual fee, are the perks and/or special benefits you get with that card worth that fee, or would you be just as well off with a no-annual-fee card? Different cards will also charge different fees for such things as balance transfers, cash advances, late payments, and exceeding your credit limit. It is best to check out these various fees before you sign up for a particular credit card in order to get the best deal and to ensure that you will not be surprised by the fees later on.

Rewards Programs
Finally, some credit cards offer different kinds of rewards programs for their users. Some rewards offer cash back for certain types of everyday purchases.  If you fly a lot, you may be more interested in an airlines award card; on the other hand, if you do a lot of driving, you would probably be more interested in a gasoline rewards card. If these types of cards are used wisely, the rewards that you earn can add up to a significant amount each year.

The bottom line is that there are a dizzying array of possibilities for credit cards. Most people these days have more than one credit card,  but whichever cards you get, you should try to choose ones that will work the best for your particular needs and wants and circumstances.

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