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How to choose the best credit card in 3 easy steps



If you’re in the market for a new credit card, you may be overwhelmed by the hundreds of options available. There are seemingly endless varieties of cards offering rewards, no-interest periods and the chance to build credit, which can make it hard to settle on the right one for your wallet.

There’s no one-size-fits-all credit card, so the best credit card for you may differ from your friend. However, there are some steps you can take to help narrow down your options when you’re looking to get a new card.

How to choose the best credit card

  1. Check your credit score and credit report
  2. Decide which type of credit card suits your needs
  3. Shop around for the best credit card offers

1. Check you credit score and credit report

The first step is to check your credit score and credit report. There are numerous free resources available, such as CreditWise from Capital One and Discover Credit Scorecard, where you can check your credit score. Plus many of these services offer insight into factors that affect your credit and offer advice on how to improve it. You don’t have to be a customer of Discover or Capital One to use these services.

Credit score ranges vary by credit scoring model (FICO or VantageScore), but creditors use FICO Scores in 90% of U.S. lending decisions, so we listed those ranges below.

FICO Score ranges

  • Very poor: 300 to 579
  • Fair: 580 to 669
  • Good: 670 to 739
  • Very good: 740 to 799
  • Excellent: 800 to 850

Once you know what range you fall in, you can use that information to fine-tune your credit card search. Consider cards that require credit equal to or less than yours. If you have good credit, consider cards that state good or fair credit requirements.

Even if your credit score falls within the good range that doesn’t guarantee you’ll be approved for a credit card requiring good credit. Card issuers look at more factors than just your credit score, including income and monthly housing payments.

2. Decide which type of credit card suits your needs

Credit cards can be separated into three main types: rewards, 0% APR and building credit.

Below we list which consumer each type of credit card is best for.

Rewards

If you have no debt and have already established good credit, rewards credit cards can help you offset the cost of purchases and pay for upcoming travel (by redeeming points or miles). Rewards cards come in all shapes and sizes with cards offering cash back, points or miles in common spending categories (travel, gas, groceries and dining out) that can be redeemed for statement credits, gift cards, airfare, hotels and more.

Depending on the rewards card you open, you may receive added perks. Here are some of our favorites:

  • Chase Sapphire Reserve®: 50% more value on points redeemed for travel via Chase Ultimate Rewards®
  • Capital One Venture Rewards Credit Card: Global Entry or TSA PreCheck credit
  • Citi Rewards+℠ Student Card: For every purchase, points are rounded up to the nearest 10 points
  • Discover it® Cash Back: For new card members in their first year only, all the cash back earned in the first 12 months is doubled at the end of the year

3. Shop around for the best credit card offers

Once you’ve decided which type of credit card meets your needs, it’s time to shop around for the best credit card offers. Consider bonus categories for rewards cards, length of intro period for 0% APR cards and credit tools for cards that help you build credit.

Plus don’t forget to factor in fees and interest rates into your decision. That includes annual fees, foreign transaction fees late payment fees and APRs.

If you have trouble choosing one card, consider submitting a pre-qualification form online to see whether you may qualify. You can submit multiple pre-qualification requests without any damage to your credit score, since it involves a soft pull of your credit — which doesn’t hurt your credit score. Be aware that pre-qualification isn’t a guarantee you’ll be approved for the card and submitting an application affects your credit score.



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