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Here Are Some Things To Consider When Choosing The Right Credit Card:

Credit cards can offer many benefits, but marketing is easy to fall victim to, and choosing a card isn’t necessarily the best option for your wallet. High interest rates and late fees easily outweigh the premiums and benefits if you don’t make your decisions carefully. And credit cards are getting more expensive as the Fed freezes rates until 2022 to fight inflation. Therefore, it is more important than ever to choose the right card for you and not against you.

There are unique financial opportunities available for credit card holders. Cashback rewards and other benefits increase as you use them. And with the return of Astravel, credit card benefits like airport lounge access and room upgrades seem even stronger. However, carrying a balance will be an increasingly risky move, and if you have credit card debt, now is the best time to pay it off.

Narrowing down your options can be confusing as credit card offers go in many directions. Here is a framework to help you enter the world of credit cards by eliminating the noise. Start with setting financial goals.

Find out what your credit card wants you to do.

You need to prioritize if you want to keep the number of credit cards in your wallet manageable while continuing to benefit from them. These are some of the common financial goals that people want to see with a credit card.

A basic rule of thumb in the US financial system is that a high credit score can help you open many doors, but bad credit can also close many doors. If you are thinking of buying a house or a car, good credit will help you get the best loan terms. This means your loan may be cheaper overall. Whether you’re planning on renting an apartment, applying for a new job, or signing a cell phone contract, your credit score can determine whether or not you’ll be approved.

Opening a credit card account on your credit report and using it frequently in a calculated way (paying your bills on time each month and using less than a third of your available balance) is a surefire way to build and maintain strong credit.

There are cards designed specifically for people with good or bad credit. These cards may be less decorative than premium credit cards, but they can help build credit for better functionality in the future.

Alternatively, secure credit cards are available for those with credit problems. We set the deposit as a deposit up to the available balance. After several months of responsible use, some security cards “allow” you to switch to an existing credit card and recover your deposit.

If your goal is to increase your budget, consider using an award credit card that allows you to earn money, points or miles. This card offers a small percentage on all purchases. For example, the Capital One Quicksilver Cash Rewards credit card offers at least 1.5% refund on all purchases.

On the other hand, some cards offer multiple face values ​​for a high reward rate. Others, such as Discover it® Cash Back *, may offer reward categories that change over time. Bonus categories can target different parts of your average budget, such as groceries, gas, restaurants, etc. Some people even shuffle multiple cards during normal shopping to get the highest reward rate on each transaction.

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As prices rise, the cost of travel, including airfare and hotels, increases. With a Travel Rewards credit card, you can save money on your next trip, earn points or miles with every purchase, and often earn great rewards on your travel purchases.

Premium perks like airport lounge access, priority boarding, free checked baggage and late checkout from hotels also offer perks that enhance your travel experience. If you have high brand loyalty, your hotel or airline credit card may be rewarded with more targeted and often higher value rewards. This allows them to offer free nights at hotel chains, discounts on onboard purchases and other benefits, respectively.

Some credit cards offer interest-free referral promotions for a period of time (usually 12-18 months), so cardholders have the flexibility to pay for their purchases during that period without incurring interest during this period as long as they pay the monthly minimum. quantity on time can. An entry-level APR credit card can help cover large or unexpected expenses, from new computers to small renovation projects.

For example, if you want to apply for a Chase Freedom Unlimited® card that offers an introductory APR of 0% on purchases and balance transfers for 15 months (15.74% – 24.49% variable APR thereafter), you can split the payment. Interest-free period – as long as you pay the minimum amount before the deadline. So, if you buy a computer for $ 2,000 in the first month, you have 14 months to pay back the computer without incurring interest. If you spread your payments evenly over that period of time, you’ll need about $ 145 a month to pay for the entire computer.

The key is to pay the purchase budget and insurance before the end of the interest-free promotion period and pay the full amount before the end of the promotion. If not, you will have to pay interest on the remaining balance on the card.

For Chase Freedom Unlimited, the balance remaining on the card after the initial promotional period is subject to an annual rate ranging from 15.74% to 24.49% depending on the balance. Credit cards are known to charge high interest rates, so it’s best not to leave a balance that you can’t pay off.

If you want to consolidate your debt with a credit card with a higher interest rate, you can transfer your balance to a balance transfer credit card that offers a similar 0% introductory APR. This will allow you the luxury of being interest-free during the promotional period, making it easier to pay off your existing debt.

One of the best ways to earn points or cashback is to apply for a new credit card with a generous welcome bonus. To receive a reward, you generally need to spend a certain amount on your card within the first month after your card is approved, usually within three to six months.

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For example, with Chase Freedom Flex℠, if you spend $ 500 within the first 3 months of opening your account, you will receive a $ 200 bonus. Welcome bonuses and spending limits vary widely by credit card type. . A card with a higher annual fee usually offers a more valuable welcome bonus.

Before diving into the coolest sign-up bonuses you can find, check your monthly spend and make sure you can hit the minimum without breaking the bank. I don’t want to borrow money to get a welcome bonus.

Check the annual fee

An important aspect to consider carefully when purchasing credit card options is the annual fee. Many great credit cards don’t charge an annual fee. However, other cards charge an annual fee. Some cards can cost hundreds of dollars. You will need to make sure that you can pay the annual fee and compensate for it by providing sufficient value for the card throughout the year.

To help you break this issue down, we propose that you create a list of the cash value of your benefits versus your annual fee to help you determine the likelihood of an opt-out, break-even or loss. Before you do the math, you will want to understand your budget.

Find benefits beyond the rewards

Look beyond cashback or points and discover the benefits of credit cards. Some of these added perks and perks alone can make certain cards attractive. You should check the details to know exactly what your credit card offers.

Car rental insurance. Some cards offer basic car rental insurance. This means that if your rental car is damaged or stolen, the card issuing company will provide you with insurance. Other cards only provide secondary insurance for car rental. In other words, the company covers everything that auto insurance does not cover. In any case, you can skip the car rental insurance offered by the car rental companies for an additional fee.

Trip cancellation or curtailment insurance. If your flight is canceled or has to stop for an eligible reason, your credit card can refund up to a specific amount, such as a flight or hotel stay, for a non-refundable charge purchased with the same card.

When you travel, you may get extra benefits with some credit cards.

Buy protection. Some credit cards apply to all purchases made with cards that are accidentally lost, stolen, or damaged. The amount of Purchase Protection Rewards varies from card to card and generally has limits and exclusions of reasonable amounts.

Extended Warranty. Cards that offer this functionality generally extend the warranty period for products purchased with the card. Like purchase protection, this feature often has many exceptions and limitations, so be sure to read the details when purchasing the option.

cell phone insurance If your phone breaks, breaks, or is stolen, your credit card may cover repair or replacement costs, as long as you pay for the phone with your card. Mobile insurance is usually based on a specific amount of coverage per claim, or a maximum per year, and is based on a maximum number of claims per year. However, this feature can save you money by not having to purchase mobile insurance through your provider.

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Safe shopping. With the rise of identity theft and data breaches, credit cards offer multiple ways to protect your data when shopping, in-store or online. The easiest way to shop more securely with a credit card in a brick and mortar store is to use the contactless payment option which is now popular in the United States. When “click ” to pay, your credit card generates a one-time code which sends your card number to the payment terminal, making information theft very difficult on your card.

Virtual card number. Online credit card fraud has also increased as physical credit cards become more secure. Entering your credit card information online can be risky, especially on unknown websites.

To reduce the risk, you can use a virtual credit card number. Some credit card issuers offer the ability to create a virtual number from a real credit card that you can use online. Virtual credit cards often create placeholder numbers instead of physical card numbers that can only be used once and expire.

Insurance when using a credit card

One way to prevent identity theft is to block your credit report. All three major credit bureaus, Equifax, Experian and TransUnion, offer the ability to freeze your balance for free. Blocking your credit report prevents others from opening new credit accounts in your name or accessing your credit report. It’s a great way to make sure no one is left with an account that doesn’t suit them, but there are trade-offs.

Whenever you apply for a new credit account, from a credit card to a mortgage to a personal loan, you need to temporarily lift the credit hold until the application is processed. You will have to do this for each credit bureau, but the process is surprisingly fast and can be done online.

If a credit card offering the perfect deal has been declined, you may need to start small and work your way up to better rewards and benefits. To learn more about how to get the most out of your money, consider this anti-inflation savings strategy to increase your cash reserves.

* All information on the Discover It Cashback program has been compiled independently by and has not been reviewed by the publisher.

The editorial content of this page is based entirely on the independent and objective reviews of our authors and is not influenced by advertisements or associations. It is not provided or approved by any third party. However, we may receive compensation if you click on links to products or services offered by our partners.

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