What credit card should I get? This kind of question often shows up when you just start to use or apply for the first credit card you’ve ever had. This is actually an important question that everyone should ask whenever they want to apply for a credit card. Choosing right credit card will give you more benefits and you also can avoid many financial problems that are caused by the credit card. So, how can we find and choose the right credit card for us? There are a few things that you need to know first.
Important Things You Must Notice for Your First Credit Card
The first thing you should know is your financial health. You need to look for your credit score because it will affect the chance to get the credit card. Moreover, with this information, you also can decide the credit card project that is suitable for your current financial condition. With the better credit score, you will have a better chance to get a better credit card with more feature and benefits.
There are many ways to check your credit score. One of them is using Experian CreditWorks tool. You can use this tool to find your FICO score. And, this is the score range and where your credit score position or how your credit condition is.
- 800+ (Exceptional credit score)
- 740-799 (Very Good credit score)
- 670-739 (Good credit score)
- 580-669 (Fair credit score)
- 579 and below (Poor credit score)
By using the score range above, you will know how your financial condition really is and your eligibility to apply for a credit card. If you have the Poor credit score, you won’t be able to apply, because the chance to get approval is much lower. However, you don’t need to worry, if you find out that you have this score.
The credit score is affected by many factors and usually, you can find it on your credit report. Therefore, if you do some research and find these factors that cause your credit score to fall into the lower range, you can start to fix it. Moreover, there is also a possibility of inaccuracies in the credit report. This is the reason, why you should calm when you receive a low credit score report. Check the report carefully and find any error, then ask for a correction to boost your credit scores.
The Type of Credit Card
Next thing you need to know is the type of credit card that you will apply. Ask yourself about this matter and find the credit card that suitable with your needs. Basically, there are three types of credit card you can try to apply. They are:
- Low-Interest Credit Card
Just like its name, this credit card has a low-interest rate. It won’t give you too much problem to pay its fee every month. Moreover, you also can use this card for making a big purchase. Usually, this kind of credit card offers 0% APR feature for you.
On the other hand, this type of credit card also can be used to fix your debt problem. You can use it to pay down your balance. Then, you can pay your high-interest debt with lower interest rate paying method. One more important thing that you need to understand here is your credit score will affect how effective this type of credit card for you. Basically, if you have a good credit score, you will get much lower interest rate.
- Credit Card for Building Credit
You also can apply for a credit card to build your credit score. This is an actually good choice for the first timer. There are many types of the credit card that can be categorized into this group, for example, there is student credit card and secured credit card. Secured credit card maybe is the most famous credit card for building your credit. Basically, you will need to deposit some amount of money when you apply it. Then, you can use your credit card regularly to build your credit history. After you think it’s enough, then you can close your account or upgrade your card to other better credit card product. When you do this, your initial deposit will be returned to you.
- Rewards Credit Cards
Maybe this is not suitable for the first timer. However, if you have a good plan to pay the monthly fee regularly or you have the good financial condition, this credit card will be your best choice. If you can pay it on time, you will get its benefits.
There are many types of reward you can choose, such as travel rewards, cash back, sign-up bonus and more. Just choose the credit card that offers the reward that you want. Just remember, this card usually has a higher interest rate. If you can’t pay it off, the interest rate will remove the benefits you can get from it.
Now, you need to compare the cards you find. For the reward card, you need to see how much you need to use it for the transaction before you get the sign-up bonus and other rewards. If you choose the wrong product, you may need to spend more than you need for a few months before you can get the benefits. In the end, it will only give you financial problem.
For low-interest credit card, find the late fee for each product. Make sure it doesn’t give you any problem. Moreover, you also need to find, if the credit card company will give you penalty APR when you late to pay the fee. It will only increase the interest rate. And, for the secured card, find the product that will give you interest benefit from your initial deposit, while you still hold it.
Those are several things that you must know before you choose any credit card product that you want. One more important thing, make sure you don’t apply for too many cards. Apply the credit card that you really need. And, make sure that your financial condition can cover the fee for that credit card. So, that’s the answer for what credit card should i get question.