How to Choose the Right Credit Card

By Robert P. La Palme President/CEO

Downriver Community Federal Credit Union

Credit cards are a convenient way to make purchases and build credit, but with so many options available, it can be overwhelming to choose the right one.

When choosing a card, it is a good idea to understand your spending habits. Do you frequently travel? Do you spend a lot on groceries or dining out? Knowing your spending habits will help you choose a credit card that offers benefits that align with your lifestyle and your budget.

One important factor is the APR. The interest rate, also known as the Annual Percentage Rate, is the amount of interest you’ll be charged on any outstanding balance. With recently rising interest rates, many people are looking for a fixed-rate credit card to ensure that they know exactly what they’ll have to pay for credit, regardless of uncertain economic factors. If you’re looking to protect yourself against the costs of rising rates, look for a card with a low, fixed rate of interest, especially if you plan to carry a balance each month.

Although many people choose credit cards that offer rewards on purchases, those cards may come with higher rates, annual fees, or strict late charges--even If you are only one day late! Additionally, many people do not use all of the rewards they earn, leaving the card issuer in some cases to expire those rewards. If you are concerned about paying too much, look for a card that does not charge an annual fee, has a forgiving late payment option, or offers rewards you’ll actually use and don’t expire.

Knowing which lender to apply with is a good strategy, so be sure to check your credit score. Your credit score may impact your ability to qualify for certain credit cards and may even determine the interest rate you’ll be charged. Understanding which lender to choose may help you obtain a card even if you’ve been denied a credit card in the past.

Before applying for or using a credit card to make purchases, make sure to read the terms and conditions carefully. Look for any hidden fees, restrictions, or penalties that could impact your ability to use the card. Understand what your minimum payment will be each month, when it is due, and always do your best to make your payments on time. Doing so will help you save money and build good credit.

In conclusion, choosing a good credit card requires careful consideration of your spending habits, interest rates, rewards and benefits, annual fees, and the fine print. By taking the time to research and compare credit cards, you can find a card that you’re likely to qualify for, meets all of your needs, and helps you build and maintain a good credit rating.