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Your Best Credit Card Application

There are so many different credit cards out there. What do you need to know to choose the best one for you? First off learn about the differences in card types, consider your spending habits, then go comparison shopping. Remember the right card for you will save you money and help your credit.

How Do You Choose The Best Credit Card for You?

Three very important things to think about when credit card shopping

  • Your payment style.
  • Your credit rating
  • The card’s terms and conditions

Your Payment Style

Simply speaking the card you want is one that costs you the least and helps you the most. First thing to consider is your payment style.

Will you pay off your balance in full every month?

Interest rates really don’t mater IF you pay your card in full, every month before the due date. What you need to watch for is Annual fees, or transaction fees. Another benefit from paying off monthly is to look for card with rewards. These cards can match your spent dollar with credits for all sorts of items depending on your personal preferences. These credits can go for air miles, free stuff, or even cash back bonuses. Your best options in this category are cards with no annual fees and rewards that you will use.

Will you carry a balance?

Interest rates matter in this category, so make sure to find the best interest rates along with little or no annual fee. Check the rates page to determine the best one for you...

Credit Card Plans

  • There are a large number of banks and companies that issue credit cards. Carefully shop them. Make sure you know what the plans they have are all about. Read in this website about annual percentage rates, annual fees, interest rates, penalty fees and transaction fees. These items can be completely different from card to card. Make sure you fully understand the credit agreement and terms for the card you choose. Pay attention to the following when checking out cards
  • Annual Percentage Rate (APR)
    This is how much the money you borrow will cost you. If you pay the balance off monthly it isn’t a big worry. The APR and the periodic rate as well as fees will be in the “terms and conditions’ information about the card.
  • Grace Period
    A grace period saves you money on interest charges. It is generally 20-25 days from the date of purchase. This is especially useful if you pay your balance off every month. Then you do not pay for the money you borrow.
  • Fees and Other Charges
    Many card companies charge annual fees, cash advance fees, late payment fees, and over the credit limit fees. These all can effect your payments...

What's more important when choosing a credit card

    Credit Terms
    APR Grace Period Very Important
Payment Pay off each month Doesn't Matter Very Important Very Important
Style Carry a balance Very Important Doesn't Matter Important

To learn more about credit card interest rates, see How APRs make a difference page.

Your Credit Rating

Your credit card rating is what runs all this. Do you know what it is? Is it good, bad, mediocre, or non existent. If you have never purchased anything on credit you may have basically no credit rating. If you were to try and go buy a house it would be extremely difficult with no credit rating. Credit card companies use your credit rating to decide if they are going to give you a credit card and often what terms you qualify for.

If you don’t know what your FICO credit score is it would be a good thing to find out before card shopping It only takes a few seconds for a credit company to find out. If you check your score first there are a ways to repair your credit by reporting errors to the credit reporting company

Although each card issuer has different standards, the following is a general guideline based on your FICO score.

FICO Score Credit Rating
Above 730 Excellent Credit
700 - 729 Good Credit
670 - 699 Borderline Credit -
Lender will take a closer look at your credit file
585 - 669 Bad Credit - Higher risk
Below 585 Bad Credit - Limited credit availability

You can check your credit by obtaining a copy of your FICO credit score and credit report.

Select from the following credit cards according to your credit rating:

  1. If you have good credit:
    • Low Interest Credit Cards
    • Low Introductory Rate Credit Cards
    • Reward Credit Cards
  2. If have borderline credit, i.e., your credit is not good but not bad, select from the following cards:
    • Unsecured Credit Cards
    • Secured Credit Cards
  3. If you have bad credit:
    • Secured Credit Cards
    • Gas Cards
    • Retail Cards
    • Prepaid Visa/MasterCard’s
  4. If you have no credit, i.e., haven't established your credit:
    • Secured Credit Cards
    • Unsecured Credit Cards
    • Gas Cards
    • Retail Cards
    • Prepaid Visa/MasterCard’s

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