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What to Look for When Shopping for a Credit Card

If you are in the market for a new credit card, it's important to pick one that fits your needs and your budget. Fortunately, there are a few easy steps that you can take to evaluate your options and choose a product that is right for you.

Does a Card Come With an Annual Fee?

Generally speaking, cards that are marketed to borrowers who have credit scores over 700 don't have an annual fee. If the card that you would like to apply for does come with such a fee, you should ask to have it waived. In many cases, credit card companies will do so for the first year that you have a given card assuming that you have a positive credit score and history.

What's the Interest Rate on Your Preferred Card?

A typical credit card will carry an interest rate of between 10% and 29.99% depending on your credit score. Interest rates may also fluctuate based on changes to the prime rate, which is the rate that the central bank charges to financial institutions throughout the country.

It's not uncommon for credit card companies to offer introductory rates to new customers. For instance, you may avoid paying interest on new purchases for 12, 18 or 24 months after opening your account. However, it is still in your best interest to pay your balance in full each month during this period. It's also worth noting that the introductory rate may not apply to any balance transferred from another card.

Does Your Preferred Credit Card Come With Any Additional Perks?

These days, many credit cards come with perks such as airline miles, cashback bonuses and other rewards designed to set themselves apart from the competition. Assuming that you pay your balances in full at the end of the month, the fact that you save 5% on gas by using a given card can help you save money.

However, it's important to note that you should never choose a card just because it offers reward points that can be turned into airline miles or discounts at your favorite restaurants. This is because the 2% bonus that you get when making a purchase is significantly lower than the 20% interest that is being charged on any balance that you retain on a monthly basis.

Can You Get Access to Your Credit Report?

Ideally, any credit card company that you choose to partner with will give you free access to your FICO credit report and score. Having access to this information allows you to get a clearer picture of your overall spending habits and how they are influencing your ability to obtain credit.

Furthermore, you can't dispute any inaccurate information on your credit report if you don't have access to it. In some cases, getting an error removed from this document could improve your credit score by 50 points or more.

When used properly, a credit card can be a great way to create some flexibility in your weekly or monthly budget. If you pay your balances in full each month, it can also be a great way to establish your creditworthiness without creating a financial hardship.