Not only can credit cards offer tools to help you better manage your money and finances, but if you choose the best credit cards, they can also help you increase your credit score, provide protection on big-ticket items that you purchase, and even help to reduce your travel expenses with the variety of reward programs offered to cardholders.
With all of the credit cards available to consumers today, it may be overwhelming to decide which are the best credit cards for you to carry. Some credit cards are definitely better for you than others, so it is important to find the one that fits your spending habits and offers perks that will benefit you the most.
While any credit card will do just fine as a means to purchase goods and services, selecting the right one can offer substantial benefits that you might not even be aware of.
Some consumers may find that the best credit cards for them are those that offer low interest rates on purchases. This is definitely something to consider when choosing a credit card, as a low rate is always a good thing no matter what your circumstances. Other credit cards that offer reward perks versus an extra low interest rate, however, may work better for some people.
For instance, those who travel a lot for business or pleasure may find that the best credit cards for them are the ones that offer travel rewards. These rewards often make up for the higher interest rates, especially if you don’t carry a monthly balance.
Likewise, credit cards that reward users with points to apply towards online shopping portals may be a better choice for those who like to use their points to select and purchase merchandise they want to be delivered directly to them.
Since all credit cards are not created equally, though, savvy consumers should do their homework and spend some time researching to find the best credit cards to benefit their lifestyle and spending habits to make the most of those rewards.
In the following chapter you will find some tips to help you make smart decisions about finding the best credit cards for you.
The Best Credit Card Rewards
Choosing the right credit card is a big decision that should enhance your financial situation in some aspect and give you the best credit card rewards that correspond with your lifestyle. Popular credit card reward programs include cash back, travel incentives, and reward points.
All of these credit card programs have their own unique set of benefits and choosing the best credit card rewards should be done so on an individual basis. Here is a closer look at each of these types of credit card rewards programs to help you determine the best credit card rewards for you.
Types of Popular Credit Card Rewards
Credit card reward points are typically given to consumers based on each dollar they spend using the credit card. The reward is usually one point for each dollar spent on the credit card.
Once enough points are accumulated, the credit card reward points can be redeemed for merchandise, gift cards, travel perks, and more from the credit card’s online shopping mall. Some credit card companies even allow consumers to redeem their credit card reward points for cash that can be applied to their credit card balance as a payment or they can also request that a check be sent to them by mail.
Cash back rewards from your credit card is a popular perk that is offered by many credit card companies. While each credit card varies in their rules on purchases, this reward offers consumers the ability to earn cash back on a percentage of the money spent using the rewards credit card.
Typically, consumers can request either a check be mailed to them for their cash back percentage, or they can choose to have the amount of the cash back reward applied as a credit on the account.
Travel credit cards earn points that are often called miles. These miles are earned with every purchase using the card. The typical reward is 1 or 2 points for every dollar you spend using the rewards card.
Programs do vary by card, but many also offer extra points when you make certain purchases like travel-related expenses. Once you accumulate points, many cards have a portal similar to that of online hotel and other reservation websites that allow you to spend the earned points to pay for travel expenses and book reservations using the points.
Consumers should choose a credit card that offers the rewards that best fit their lifestyle and shopping trends.
Those who have a job that requires them to travel or jetsetters who live for travel adventures would best benefit from a credit card that offers travel perks. If you like to earn reward points to use for shopping for brand name items on the company’s online shopping center, eating dinner at restaurants, or getting a discount on your hotel stay, you might want to consider a credit card featuring reward points.
If none of these sounds like something you would be interested in, the best credit card rewards program for you may be the cash back program. It is fair to say that cash works for just about everyone, so credit cards with this reward program are always a safe choice.
Credit Card Rates
No matter what perks a credit card offers, smart consumers know that nothing beats low interest rate credit cards.
When choosing low interest rate credit cards, be sure to pay attention to all of the details concerning the interest rate though, as many rates are only available for a limited time. All of the details of the offer are listed on the credit card application, so be sure to read those thoroughly before applying.
One good example of this is when a variety of credit card companies offer promotions with interest rates as low as 0%. That sounds like an amazing opportunity, but it is important to realize that this rate will expire. When this happens, the interest rate will instantly increase to a much higher standard rate based on your creditworthiness.
It is crucial to know what the rate will be raised to in order to determine if the benefits outweigh the eventual cost.
It is also important to know whether you will be charged retroactive interest on those purchases made but not yet paid off during the initial period, which many credit card companies do charge. This could mean hundreds of extra dollars owed by you when the promotion expires.
However, if you plan to carry longer-term balances on the credit card, it makes better financial sense to choose low interest rate credit cards with a fixed rate that will remain in place as long as you continue to make monthly payments on time. This will allow you to pay lower overall interest while you make payments.
It is also important to know that anytime you are late or miss a monthly credit card payment, you will most likely see an increase in credit card interest rates on that credit card. Lower rates are reserved for those that are financially responsible and pay their credit card bills on time. When you fail to do so, you will be disciplined with higher rates and possibly even a lower credit limit.
Credit Cards to Build Credit
Often times when young people are just starting out on their own, or if someone has not made many major credit purchases like a home or vehicle in their lifetime, they may find that their credit score is lacking. While you do not have bad credit, your credit file may not have enough credit history to prove to lenders and creditors that you are financially responsible.
Establishing a credit card in your name is a great way to help you build your credit and prove that you are worthy enough for lenders to take a chance on and give you a loan.
It is a wise choice to apply for a credit card to help build your credit score and increase your spending power. The key to building and maintaining a good rating with the credit bureaus is to use the credit card at least a few times a month. If you have the credit card and don’t use it, you are not doing anything at all to increase your credit rating and change your credit profile.
In addition to using the card for purchases each month, it is just as crucial to make the payments on time. Not only does this provide a good rating when they report to the credit agencies, but it also builds a reliable payment history for creditors to refer to when you apply for a loan, credit card, or another line of credit.
If you are able to pay the full balance each month, that’s even better for your credit score and your finances, as you will not accrue additional interest that will need to be paid by you.
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