Finding the Best Credit Card: Which Option is Right for Me?

Although some consumers may suffer from over reliance on credit cards, they do have some benefits. By making regular monthly payments, cardholders are able to establish a credit history. Having a positive track record can come in handy when seeking future loans, such as for a home. In addition, credit cards can have other advantages – like the ability to earn spending rewards after charging a certain amount of money to the card.

Here are a few considerations for consumers to weigh when choosing the credit card that is best for them:

1. Does the card carry an annual fee? What about fees for service?

This extra expense can be avoided by choosing a similar card that does not charge a fee to become a member. But, if you get a no-fee card, read the fine print carefully – it could be a limited-time offer that will eventually expire. Before signing up for a card, you should make sure you are aware of any future fees you may encounter.

2. How high is the interest rate?

According to BankRate.com, the average interest rate is between 11 and 14%, depending on the type of card you get. You should be cautious of anything higher, in case you find yourself having trouble repaying your monthly bills. Many companies also offer an introductory rate, which can be as low as 0% interest, but often ends after a few months.

3. Are there any bonus rewards you can take advantage of?

Many cards offer special perks when you sign up for a card affiliated with a certain business. Others reward you for spending on gas, food, or travel. For example, using a credit card affiliated with a hotel chain may earn you free room upgrades. Using a credit card connected to airline miles can eventually lead to a free flight. If there are companies that you already frequent, see if they have a credit card offer that you can benefit from.

4. What is your current spending history? How do you plan to use this card?

Do you plan to use this card to transfer your balance from a higher-rate lender? Then, you’ll be looking for the lowest interest rate possible. Have you had trouble with credit in the past? Having a negative history will make gaining approval for a new card more difficult. Is your credit history strong? You will likely have a broader range of options to choose from, and find it easier to get approved for higher amounts of credit.

You should also consider your spending limits – if you can only afford to pay a $1500 monthly bill, getting a card with a limit of $50,000 might be too tempting, and make it difficult for you to stick to your budget.

For some more tips on making a good credit card decision, bankrate.com provides an online checklist.

Laura Gutmann

Laura Gutmann

Laura Gutmann is currently a PhD student in Education at the University of North Carolina-Chapel Hill. As part of her studies, she hopes to focus on creating better resources and training materials for teachers.

Previously, she worked as the Vice President of Programs for Junior Achievement of New York. She was responsible for reaching 95,000 K-12 students per year with financial literacy, workforce readiness, and entrepreneurship programming. Her team organized events for schools across the five boroughs of New York City, facilitating positive relationships between classrooms and the community. Ms. Gutmann has extensive experience building curriculum focused on life skills, and has partnered with dozens of corporations to train their employees to become volunteer role models.

Ms. Gutmann also created resources for both students and educators during her time as a kindergarten teacher in the South Bronx. She first entered the classroom through the Teach for America corps, and went on to receive her M.S. Ed. in Early Childhood from Bank Street College. She has developed web resources, professional development sessions, and parent workshops, and served as a graduate-level writing tutor and resume coach.

Before becoming a teacher, Ms. Gutmann studied Public Policy at Duke University, where she received her B.A. in 2002. She worked in Durham Public Schools as a reading tutor and photography teacher. She also spent time doing research for the American Federation of Teachers, and served as a consultant for the Wake Education Partnership.

Ms. Gutmann currently resides in Chapel Hill with her husband and her dog, a poodle named Noodle.
Laura Gutmann

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