How to Choose the right Credit Card

Do we really need a credit card? In this time of uncertainty the answer is YES. Contrary to what many people portray, credit card is not that evil. The fact is, it gives people lots of convenience and huge benefits. However, its advantages or benefits depend on how you use or spend it.

For long as you pay your credits off each month, credit cards are a no-brainer for savvy people.When it comes to protection against fraud, credit card is far better than debit cards. It also helps raise your credit score, and can put hundreds or even thousands of dollars in rewards or cashbacks yearly. Who doesn’t want the convenience it gives especially nowadays that the world is going cashless due to the pandemic?

According to a recent survey,  25 million Americans have kept the same credit card for a decade, while another 20 million have never changed the card they use.

Sure, you can change cards more often, but do note that switching the card you use can be a major hassle if you’re using it for online purchases and online bills payments. Aside from that, it’s better tohave a long-term relationship with your credit card provider to maximize its benefits and perks.

Wondering which is the best credit card for you? Here are a few tips to help you choose.

• Decide the purpose of your credit card

What are your main reasons for getting a credit card?The credit card with the lowest interest rate or has the most generous rewards is meant for general spending. However, different card options are needed if it is for business purposesor for debt consolidation.

• Check your spending habits

If you can afford to pay your bill in full monthly, then you can maximize the rewards you earn by using your credit card often. Find a card that will match well with your spending.

Many credit cards give you bonus rewards points for certain kinds of purchases such as travel, hotel accommodation or airline tickets; gas groceries and restaurants to name a few.Your card must fit your lifestyle. To see which types of purchases you make most often, look back at your past few months of credit card statements.

• Determine what type of credit card is right for you

Once you have an idea of what you're looking for in a credit card, you can narrow your options down depending on your situation.

Balance transfer card is a credit card to consolidate debt or reduce interest paid on existing debt.

0% introductory APR (annual percentage rate) credit card is for big purchases that you won't pay off immediately.This type of card offers an interest-free introductory period. Once the given period ends, the regular APR rate is applied to new purchases and any remaining balance.

Cash back credit card if you want to get your rewards as a statement credit to reduce your monthly bills.

If you're still in school and just starting to build your credit, a student credit card is the one for you.

Still unsure which credit card offer you should take? Take a look at this free calculator for credit cards to estimate the long-term costs of multiple credit cards which may have varying annual fees, introductory rates, ongoing rates or compounding intervals.

How does this calculator work? Once you enter the initial account balance and the terms for each card, the calculator will use the fixed payments you enter to figure out which card is a better deal. To improve the accuracy of the calculation, try to include your average payment amount if you make varying payments.

You can leave that field blank if a particular card does not have any introductory offer.

There are many different credit cards out there so make sure to compare your options carefully based on the interest rate you'll pay if you carry a balance, rewards, minimum payments, sign-up bonus, annual fees and other fees and perks. Some credit cards are enticing at first but puts you in grave debt in the long run.