How to choose the right credit card

To ensure you choose a credit card that meets your needs, take time to compare various offers. Here are the key things you should do to find a card that’s right for you.

Check the interest rates
Interest rates vary depending on the type of credit card used. Those offered by stores, for example, tend to have higher interest rates than ones issued by banks. If you always pay the balance in full by the due date, the amount of interest you pay will be less. However, if it’s more likely that you’ll only make partial payments each month, you’re better off getting a card that has a low-interest rate.

Consider the fees
Annual fees and other costs also vary considerably between credit cards. If you exceed your spending limit, use the card abroad, or allow it to become inactive, additional fees may apply. If you frequently travel, consider obtaining a card in a foreign currency to avoid expensive exchange rates.

To ensure you choose a credit card that’s cost-effective, assess your spending habits and ability to keep up with payments. Calculate whether it’s more advantageous to pay a higher annual fee in exchange for a lower interest rate. Keep in mind that some credit cards don’t charge an annual fee at all. If you’re in college or university, you might be eligible for a credit card designed for students.

Evaluate the rewards
Some credit cards have a rewards program that allows you to accumulate points and exchange them for various goods and services. Alternatively, you might be eligible for discounts or cash-back earnings. Some credit cards offer additional perks such as travel insurance.

If you’re considering a card based on its rewards program, make sure you’ll truly benefit from the offerings. For example, a retail credit card that provides in-store rebates is only worthwhile if you frequently shop there.

A credit card is an important financial asset. Before you choose one, carefully review the terms of use and be sure to ask the provider questions if you have them.