Factors To Consider When Choosing A Credit Card

Thinking of getting a new credit card? Consider these key factors to find the best one for you.

Purpose.

What will you be using this credit card for? Travel, gas, groceries? Depending on your spending habits, certain credit cards may offer more benefits to you than others whether it’s in the form of additional cash back, no foreign transaction fees or having your TSA Precheck or Global Entry application fees credited back.

Rewards.

Credit cards entice applicants oftentimes with their sign-up bonuses or continuous spending rewards. Determine what kind of purchases you plan to make with this credit card and the amount you will realistically spend to decide which credit card will reward you the most for your spending.

Annual fee.

Some credit cards offer annual fees while others don’t. This fee is charged as long as your credit card remains open even if it is inactive. The higher the fee, the more perks you usually receive. Just something to be mindful of, but make sure the perks are worth it if you are paying an annual fee.

Interest rate.

If you have the means to, always pay off your credit card in full at the end of each statement cycle. If not, you will incur interest and will want to pay attention to what that interest rate is as it varies by credit card.

A note on timing…

Last credit check.

When was the last time you had your credit checked? Hard credit inquiries affect your credit score and play a factor in determining your credit line. Applying for a credit card generally requires a hard credit inquiry, which lowers your overall credit score. If you just applied for a credit card or loan, chances are you had your credit checked, and it would be in your best interest to wait about 6 months before applying for a new credit card.

Don’t want to wait or worry about getting your credit checked? Be one of the first to get in on the next generation of credit cards that doesn’t require a credit score. Visit TomoCredit.com to learn more.