If you think the time is right for you to apply for a new credit card, your first step should be setting a goal for that card. Do you want to earn cash back rewards? Pay down debt from other credit cards or retail cards? Earn gas rebates or airline miles?
Credit score and credit cards
In addition to knowing how you want to use a new credit card, you also need to know whether you qualify for the best credit card deals. Credit card companies offer a wide range of credit card accounts for people with poor credit, average credit, good credit and excellent credit. The best rewards programs and the lowest interest rates are typically reserved for consumers with the best credit score.
You can request your free credit history from all three credit reporting bureaus at www.annualreport.com, and you can also pay a small fee to see your credit score from each credit reporting bureau. Knowing whether you have good credit can go a long way to helping you choose the best credit card for you.
Credit card options
The following list of credit card categories gives you an idea of the types of credit cards that are available. Once you narrow down the list and decide which type of credit card will benefit you most, you can look for the best credit card offers within each category.
- Balance transfer. If you need to pay off a debt and you have good credit, look for a balance transfer credit card that has the longest introductory period of zero percent financing.
- Zero percent financing. If you want to make a big purchase and pay it off over several months, compare credit cards that offer a zero percent introductory rate for purchases. A credit card calculator can help you figure out how much to pay each month to pay it all off before you have to pay interest.
- Points/miles. If your goal is to rack up frequent flier miles, you should compare offers on points and miles credit cards. Some require that you use the points on only one airline, while others let you redeem your rewards points for flights on any airline. You can usually use these points for hotel rooms, rental cars, gift cards and merchandise.
- Cash back. While airline trips and hotel rooms are nice rewards, you may be more interested in simply receiving a credit on your bill or a check as a reward for making purchases. Find the best cash back rewards card for you by comparing how much you can earn on spending in certain categories.
- Small business cards. If you own a business you may want to earn rewards for business expenses such as gas purchases and office supplies. If you travel often for business, look for a business credit card that earns you points for rental cars, hotel rooms and airline miles. You can cut your business expenses and boost your profit by redeeming points for your next business trip or reward your hard work with a free vacation.
- Bad credit. While rewards programs are nice, if you have had financial trouble all you really want is to get back on your feet and build a better credit history. Credit card companies offer both unsecured and secured credit cards for people with credit problems.
- Student credit cards. Even if you are working only part-time while you go to school, you may qualify for a student credit card. Rewards programs for these cards are geared to the way students live, with points for gas and groceries and books.
If you've decided how you want to use a new credit card, start comparing the best credit card deals on this page.