How to Choose the Best Credit Card for You

There are thousands of credit cards in circulation, and each one seems to offer a good deal. Some offer low interest rates. Others offer rewards. How can you tell which credit card is the best one for you? To find a card that suits your needs, take a look at your lifestyle and your spending habits.

Your Lifestyle

Do you travel frequently for work or pleasure? Are you a relentless shopper at Amazon.com? Do you have strong feelings about charitable causes? Could you use a little extra cash, or discounts on gas purchases? If you answered yes to any of these questions, you should choose a reward card.

Reward cards let you earn points that translate into big savings, or even cash. Travelers like reward cards because they can earn free airline miles, car rentals, and hotel rooms. Shoppers enjoy earning rewards from their favorite online sites. Gas reward cards make fuel purchases a little more affordable. There are even reward cards that donate a portion of your spending to the charity of your choosing, be it animal rights, the fight against illiteracy, or the funding of eco-friendly research.

Some reward cards even offer concierge services and discounts on movie and concert tickets. Just about everyone can find a reward card that appeals to them. Just be aware that some reward cards carry a substantially higher interest rate than regular credit cards.

Your Spending Habits

Are you the type of card holder who pays off their balance in full every month? Or do you tend to spend now and pay later? Have you already accumulated a significant amount of credit card debt that you want to pay off quickly? No matter your situation, there's a credit card that fits your style.

If you pay off your card balance each month, interest rates won't be a concern. Instead, look for cards with generous credit limits. They will increase your debt-to-credit ratio and raise your credit score. Also, look for cards with great perks and reward programs.

If you carry a balance from month to month, you'll want to look for a low-interest credit card. Charges that linger are subject to fees and interest. Shop around for a card with minimal fees and a reasonable fixed APR.

If you've got some credit card debt and want to pay it off, look for a 0% interest balance transfer card. That way you can transfer the balance and pay it off without interest rates slowing you down. Just remember that the 0% interest period won't last forever; 6 to 18 months is typical. If you can't pay off your balance in that timeframe, your debt will incur interest all over again.