Choosing the Right Credit Card

A man with a sweater tied around his neck holding a smartphone in one hand and a credit card on the other at a restaurant or café.

CONSIDER THIS: The credit cards consumers choose can have a considerable impact on their overall financial health, so it’s important to choose wisely.

Although there are no set rules for finding the perfect credit card, here are some ways to make that search a little easier:

Check your credit.

Consumers with higher credit scores are more likely to be approved for credit cards with better perks, while those with lower scores may need to shop around more. It’s best to begin the research process knowing your score. Federal law entitles you to a free copy of your credit report from each of the three major credit bureaus every year. is a federally authorized site where you can find your score.

Figure out what type of credit card you need.

There are three main kinds of credit cards: those that help improve limited or damaged credit; those that save money on interest; and those that earn rewards. Additionally, some consumers choose cards to transfer a balance from an existing credit card. Be sure you’re choosing the card that most benefits your current situation.

Decide how likely you are to carry a balance.

If the answer is yet, search for cards with low annual percentage rates (APR). Otherwise, you could end up with card payments that don’t fit into your budget and that drag out longer than expected. A card with an 18 percent APR, for instance, would accrue $1,138 in interest on a $3,500 balance. It would take more than three years to pay off that balance making $120 monthly payments.

Read the fine print — ALL of it!

Be sure you understand everything about your new card, so you can use it as wisely as possible. You may like a card because of its 0 percent APR introductory offer, but make sure you understand how long that offer lasts and what you’ll be paying in finance charges once that rate changes. Some cards also include annual fees, late fees, and foreign transaction fees.