Choosing the Best Credit Card In 2016

Choosing the Best Credit CardWith so many hundreds of credit cards available on the market, it may be hard to decide which piece of plastic is right for your wallet. Use these tips to help you choose the best credit card for your needs.

Take these tips home and think them threw. Figure out what you need for credit. Have a plan and keep moving. 

• 1) Determine your goals

It’s important to understand why you want a credit card. Do you want to score free flights? Are you interested in earning cash back? Are you looking more for a safety net when cash is low? Or perhaps you want to consolidate high-interest debt from other cards?
Depending on your goals, and particularly whether you plan to carry a balance or not, your needs will be very different. Rewards cards have higher interest than non-rewards cards, making them less ideal for carrying balances, and they often have an annual fee.

• 2.  If you are only interested in transferring a balance or plan to carry a large balance, you may be better off applying for a non-rewards card with no annual fee2) Want rewards? Decide what kind

If you’ve decided to go with a rewards card, you have several options. There are cash back credit cards, where you earn a percentage of your spending back in cash. There are points cards, where you earn points based on the dollar amount you spent. These can usually be redeemed for cash back, gift cards, travel, merchandise, events and more. Then there are travel cards, where your rewards are free flights or hotel stays.
Get the type of card that will benefit you most. If you aren’t a frequent traveler, don’t go for a travel card just because there is a large bonus offer for applying.

• 3) Consider introductory offers

Do you need to transfer a balance from a high-interest credit card to a low-interest card? Look for a credit card with an introductory APR offer of 0%. Thanks to the Credit CARD Act of 2009, these introductory offers must be at least six months long, though many introductory balance transfer offers are for a year or longer in an effort to be competitive. This gives you a generous window for making headway on paying off your balance without accruing more interest (temporarily). Pay close attention to balance transfer fees, however, to make sure it’s still a good deal.
Are you looking to make a big purchase such as a television or sofa, or do you plan to carry a large balance? You may want to apply for a card with a 0% introductory APR offer on purchases (though some cards offer an introductory period on both purchases and balance transfers). The same six-month minimum rule applies, though many offers are much longer, giving you plenty of time to pay down your debt before interest kicks in.

• 4) Figure out the fees

It’s important to determine which credit card fees will be worth it for you. It is now common for rewards cards to have annual fees, though many now have two tiers of cards: one card with no annual fee and one card with a high annual fee (often close to $100) but better rewards. For example, you may find a credit card with no annual fee and three percent cash back on all purchases and then another tier with a $95 annual fee but six percent cash back on all purchases.

Before you get a card with an annual fee, do the math to make sure the rewards and benefits will add up enough that the fee is worth it. If you won’t be able to earn enough rewards to cover the cost of the annual fee, it isn’t worth it.

Additionally, if you plan to do a balance transfer with your new credit card, you should read the fine print and determine the balance transfer fee before you apply.

Photo source: abcnews.com

Editorial Note: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.