It seems like there are literally hundreds of different kinds of credit cards out there and choosing between them can seem like a rather mammoth task. Here are some points that you should keep in mind when picking just the right credit card for you:
Tips for Those with Less Than Perfect Credit
If you have less than perfect credit, obtaining a credit card is not always going to be the easiest thing to do and you may have far less choice as there will be certain cards you just will not qualify for. Here are some tips for choosing the best credit card if your credit score is considered ‘fair” (around 600-660)
What Is Your Bank Offering?
If you have a relationship with a certain bank that you have had for a while, a checking or savings account say, you may want to start your search for the perfect credit card by researching what kind of credit cards they have to offer. A bank who is familiar with you and your finances is often more likely to overlook any credit blemishes if you are an otherwise good risk, far more so than a financial institution that knows nothing about you.
Not all local bank credit card offerings will offer the same kinds of benefits, perks and rewards as credit cards issued by larger banks but as a way to build credit they are an excellent tool and once you have upped your credit score you will be able to qualify for all those other credit cards that offer a little more.
Look for Fair Credit Credit Cards
Though a credit card application itself will never tell you just what kind of credit score an institution is looking for to approve you there are a number of credit card review sites and articles that can give you are good idea about which credit cards are likely within the reach of someone with less than perfect credit. You should remember though that there are other factors taken into consideration for credit card approval as well, including income level and debt to income ratio.
Several of the credit cards offerings from Capital One are usually within the reach of those with fair credit including the Capital One No Hassle Cash Rewards MasterCard and the Capital One Classic Platinum MasterCard and the credit cards offered by HSBC through Orchard Bank are also usually available to those with fair credit although the fees are usually higher than those attached to other cards.
If your credit score is in the lower end of the 600 range you may want to consider applying for a secured credit card. Although they vary in the amount of security you will need to put don and the fees they charge a secured credit card of any king issued by a major bank will help you build your credit up and if you choose a secured credit card from a bank like capital One or Citi they will often offer to upgrade you to one of their unsecured credit card offerings once you have established a good payment record on the secured card.
A Word about PrePaid Credit Cards
Often when you begin a search for credit cards for fair credit you will be offered a lot of information about prepaid credit cards. There is some confusion for some people as to exactly what prepaid credit cards and what they can and cannot give you. A prepaid credit card is not a secured credit card. In the most basic terms a prepaid credit card is pretty much the same as a debit card, you load money onto it, you can spend what you load and nothing else. Very few prepaid credit cards can help you build credit and they are mainly just a convenience, especially for those who have had trouble opening a traditional bank account.
The Interest Factor
If you have good or excellent credit there re of course a lot more credit card offerings available to you. The choice becomes even harder though as they all seem to offer something different.
One of the things that is often heavily touted in credit card advertisements is that a certain card has an introductory 0% APR. that is often the lure for many people but before you choose a credit card based solely on this kind of offer you should give a little more thought top whether or not a 0% APR is really going to be useful to you.
If you usually pay off your balance in full every month interest really isn’t much of a factor as you will rarely be in a position to be charged any, so a 0% APR is of little benefit and a good rewards program may be far more useful to you and you may want to consider a charge card like one of the American express offerings that come with a lot of extra perks attached as a reward for great fiscal behavior.
If you do tend to carry a balance on your credit cards the 0% APR may be of a great deal of use to you. You do have to remember though that whether it is in 6 months or 24 months eventually the “regular” APR will kick in, so make sure that it is a competitive one. Also most credit card companies will rescind the 0% APR if you make a late payment or go over your credit limit and begin applying a penalty APR (which is usually quite high) to your account right away, so a 0% APR rate should not be seen as a “license to spend”!