Credit cards can provide significant value to cardholders. Some of the benefits they offer include consumer protection, several rewards, emergency funding, building a financial profile, and so much more.
All these and more can be enjoyed by cardholders that use them responsibly. You can check here to find out about other benefits.
To fully appreciate the benefits and avoid potential pitfalls, selecting the right one is crucial. In this article, we will discuss how to make an informed decision when choosing the best credit card. Read on, as this topic is very vital for financial reasons.
Tips on Choosing the Right Credit Card
On the whole, getting the best credit card requires doing two things. The first is getting your credit profile in the right state. Doing this significantly increases your chances of getting the best available options.
The reason is that you would meet the eligibility criteria of some of the best issuers in the market. The second requirement is due diligence on issuers before making your choice. To provide a clearer perspective, below are a few points to enable you to get the best credit card:
Find Out Your Eligibility Status
Issuers would not grant the request of every Dick, Tom, and Harry that applies. They have eligibility criteria that have to be met before applicants can be considered.
Check out your eligibility status and only apply to issuers that consider you eligible enough. This is given how some issuers are more stringent with their requirements than others.
Do not bother applying if you do not meet an issuer’s eligibility criteria. This is to avoid your request being declined. But more importantly, it is to avoid the damage that declines can do to your credit score and profile at large.
It can adversely affect your score as the issuer’s inquiries about you slightly reduce your score. Having several declined requests also makes you appear desperate even for issuers that consider you eligible enough.
This all proves the need to be fully aware of your credit profile even before applying. Fortunately, there are online tools that can help you quickly figure this out. You can make use of them.
Research Your Expenses
Credit cards are meant to offer a line of credit for the payment of your expenses. As a result, you should be well aware of your expenses before getting one. This information is important for several reasons including choosing an option with the right balance limit.
Not being aware of this information can lead you to choose something that is not fit for you. This is either something with an insufficient limit or way more than you need.
In the case of the latter, you may be increasingly tempted to spend more than you should. This is particularly when there are rewards for making purchases using your card.
Define Your Financial Goals
Your financial goal for using it should be a major deciding factor when making your choice. In other words, you need to have clearly defined reasons for wanting the card.
For example, it could be to highly subsidize your travel expenses. Getting discounted flight expenses and/or no foreign transaction fees are some of the ways this is possible.
Cardholders may also use it to significantly reduce the amount that they spend buying gas. This is because of rewards that reduce the cost spent on gas purchases. In other words, do not seek a credit card without having a clearly defined reason for doing so.
Knowledge of all the possible rewards that come with using the various options can help you make the right choice. So, make sure you are not ignorant about the various rewards.
Use Comparison Tools
Several issuers will be open to granting you their kredittkort (Norwegian for credit card). This is largely depending on your eligibility status. It is important that you choose the best issuer and this requires gathering so much information about the various options.
Fortunately, you do not have to go through so much trouble with online comparison websites. They compare the various issuers and inform readers about eligibility criteria. Some of them even have calculators that give a truer picture of the cost of using credit cards by various issuers. The major highlight of this tool is the ability to make customized inquiries.
For example, you can inquire about getting cards with various credit limits. Using these tools helps in making the right choice. However, make sure you use websites that quickly update their information as some are guilty of presenting outdated information which would be misleading.
Acceptance Status
Credit cards are mostly accepted as viable payment solutions. However, some are more accepted than others. For example, some online transactions only accept certain options. This defeats the purpose of using them as they should be a viable payment solution.
For this reason, ensure that your chosen card is widely accepted. At least, it should be well accepted as a means of paying for your regular purchases.
Interest Rates
Interest rates are a large part of the cost of using credit cards. This is especially during situations when the credit balance is carried over to the next month. For this reason, make sure the rate is as low as it can be based on your eligibility status.
As mentioned early on, getting your credit state in order is of utmost importance. One of the reasons is that it increases your chances of getting credit cards with very low-interest rates.
Annual Fees
You should not analyze a credit card as good or bad using just one assessment yardstick. For example, options that charge very little or no annual fees may seem better and you are partially right for thinking so.
However, you should not just reach this conclusion until you have considered the rewards and overall benefits, as well. For example, some issuers charge no annual fees but offer almost no reward.
On the other hand, some options charge annual fees that may be considered high. However, they offer a great deal of rewards to their cardholders that far outweigh the annual fees demanded.
Customer Service
For starters, reaching the issuer’s customer service team should be easy. Make this a major consideration before making your choice. For the record, the quality of some customer support teams is location sensitive.
This is given how people in certain locations can easily make the most of the issuer’s customer service team. It may not be the same in other places. So, make sure the issuer’s customer support team is very helpful for cardholders in your location.
Redemption Option
Being able to get rewards is one of the known benefits of using credit cards. However, some issuers are very uptight about how rewards can be redeemed. Make sure your choice is not this way. There should be reasonable and several ways to redeem rewards.
Terms & Conditions Should be Read and Understood
Unfortunately, some issuers are not true to their word. This is given how they make certain promises but the details of their drafted terms and conditions say otherwise. Do not fall victim to such issuers.
This requires going through the terms and conditions drafted by the issuer yourself. Firstly, the aim should be to ensure that all the promises are included in the agreement. Secondly, ensure that unreasonable clauses have not been inserted into the drafted terms and conditions.
Consumer Protection
Consumer protection is supposed to be one of the advantages that credit cards have over the debit option. This informs the need to only consider credit cards that offer a reasonable amount of consumer protection.
On a Final Note
Credit cards offer valuable advantages. However, reaping them necessitates choosing the right credit card issuer and product. This is why prospective cardholders need to understand how to make this important choice.
Several tips on how to do this have been shared here and should be taken seriously when the need arises. Responsible card usage is also essential to prevent potential debt-related problems.