The best credit cards for you are those tailored to your
individual financial needs and objectives with low interest
rates and, of course, those for which you will be approved. To
find out what you're looking for, answer the following
questions:
1. Do you anticipate any large purchases in the next year (i.e.
furniture, appliances, etc.)? 2. How long will do you anticipate
keeping the principal of a purchase on your card? 3. Do you want
to pay your entire balance every month? 4. Are you planning to
use this card for purchases over a short time period or do you
intend to hold it for a long time? 5. Do you currently have
credit limits totaling more than 40% of your annual income or
balances outstanding on those cards greater than 50% of the
credit limit?
If you answered yes to the first question, you will need a card
with a high credit limit and a low interest rate. This may seem
obvious but not all people need these things. You may do best
getting a card with rewards attached to something you are
interested in, like an airline miles card.
If you answered greater than three months on the second
question, you will need a low interest rate. Do not be
discouraged by a low credit limit. The interest is where you
will save money.
If you answered yes to the third question, you may be interested
in finding a 0% interest charge card, such as American Express.
These cards will not charge you interest as long as you pay your
bill promptly and in its entirety every month.
If you answered that you want to hold on to your credit card in
the fourth question, you should look for a moderate credit limit
and a low interest rate. If you answered that you plan to use
this credit card only in the short term, then you should look
for a card with an introductory 0% interest rate. These are best
coupled with a plan to pay off the balance by the end of the
introductory term.
If you answered yes to either part of the fifth question, you
may have some difficulty securing new credit cards. Part of your
credit score is determined by the amount of credit you carry and
the ratio of the balance outstanding to the credit limit. Some
banks are unwilling to grant additional credit to those
applicants whose credit scores are low due to outstanding
credit, even if you have paid on time. The best credit card for
you may be a card specializing in bad credit, regardless of how
close you are to the acceptable credit rating.
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No matter what your credit card needs,
