How To Choose A Credit Card

How To Choose A Credit Card


So you want to get a credit card. 


You’re in luck because you have more options to choose from than ever before. There’s a credit card for everyone, regardless of your credit history. 


While variety is good, it can also make choosing the right credit card harder. Whether it’s money or hassle, picking a card that aligns with your needs and habits will save you considerably in the long-term. 


As you browse different cards and companies, take note of features and fees, as these can make or break your decision.


If you want to get a credit card and you’re not sure where to start, these tips from Cashay can help. 


Compare Features

Credit cards might seem similar, but depending on how you use them, their features can have a serious impact on your budget. Here are the key things to consider as you compare cards. 


Credit Limit

A credit limit is how much a creditor lends to borrowers. Generally, the better your credit score, the more willing lenders will issue a higher credit limit. If you pay your monthly balance on time, in full, and don’t max out your card, your lender will consider raising your credit limit periodically. 


Each credit card has its own credit limit, so do your research to find one that offers your preferred limit.



Credit card companies have rewards programs to attract new customers and incentivize existing cardholders to use their cards. These programs typically offer points that you can exchange for different benefits like cash back, statement credits, gift cards, miles, and more. 


As you compare, look at different aspects, such as:


  • How much are the rewards?
  • How flexible are the rewards?
  • Do rewards expire?
  • Are your rewards limited to a certain number of points or dollar amount?
  • Are there redemption restrictions?


Also, be aware that not all rewards programs are free; some issuers only offer them if you pay extra.


Balance Transfers

Balance transfer credit cards let you move the balance from an old credit card to a new one while paying nothing (or next to it) in interest during the introductory period. Of course, you have to pay to use this service, but it’s usually no more than 3% of the amount you transfer.


That charge is a small price to pay for how much you can save by avoiding higher interest payments during the welcome period. Keep in mind that the APR will revert after the promotion. So, you want to pay as much of your balance off as possible during that timeframe.


Compare Interest And Fees

It’s one thing if a card has great features, but high interest rates and fees could offset the benefits. It’s important to look at these aspects so you don’t end up paying more than you should — or worse, getting trapped in a cycle of debt.


Here are a few of the main fees to evaluate as you make your decision:


Annual Percentage Rate (APR)

The APR is the interest rate you pay on your monthly balance, and it can range widely among different credit cards. Some cards have fixed APR, which doesn’t change, while others have variable APR, which means the interest rate fluctuates occasionally.


There are three types of APR:


  • Promotional APR: Also known as introductory APR. This type of APR is temporary and reverts to the regular APR after the introductory period ends.
  • Regular APR: The standard interest rate you pay on your balance
  • Default APR: This type of APR occurs when you miss a payment or so something else that breaks the terms of your contract


Make sure to compare each type so you can determine your ability to afford monthly payments.


Balance Transfer And Cash Advance Fees

These services have a separate APR that is usually more than the regular rate. As you compare cards, make sure you look for these fees — particularly if you intend to use these features frequently. 


Fees And Penalties

This step requires combining the fine print with a fine-tooth comb, but it’s essential to choose the right credit card. Make a list of each card’s fees, including their amount and factors that trigger them. 


Some cards are more lenient than others and don’t levy hefty fees. Others might offer great features but offset these with hefty charges. 


Credit card companies charge fees for many reasons, such as:


  • Annual fees
  • Maxing out your card or surpassing your credit limit
  • Late payments
  • Balance transfers
  • Cash advances
  • Paying your bill over the phone
  • Issuing a stop payment on your account


Depending on your situation, these fees may be worth the perks of a particular credit card. As you shop around, you will indeed find many with excellent offers and reasonable rates and fees. And of course, the better your credit, the more likely you will be eligible for favorable terms. 


  • Financial Fitness. “How to Choose the Best Credit Card: Factors to Consider.” Cashay, Cashay, 28 Aug. 2020,
Ian Schindler