Make sure your credit card is right for you

Before you start searching for the best interest rate, decide what you want out of your credit card.

07:34 15 September 2013

When you are thinking of a credit card, you probably don’t sit down and write out a list of what you want out of a credit card. Strangely enough, that wouldn’t necessarily be a bad idea. Credit cards come in such a variety and with so many small differences that it can be difficult to choose one that works well for you and your lifestyle. Furthermore, you might not even realise the options unless you do some comparisons, but you don’t necessarily want to apply to many companies because each inquiry results in a reduction of your credit rating. One or two inquiries aren’t a big deal, but it can be a red flag if you have many.

Before you even start looking around a credit card companies and the special offers meant to entice consumers, make a list of the reasons you want a credit card. Include any relevant details such as how often you would use the card and what circumstances could prompt you to use the card. Do you want one because you travel frequently and want to earn airline points, but you’ll pay it off in full each month? Perhaps you need to establish a credit rating because you have little or poor credit history. Based upon the list you create, you should be able to determine if you will be using the credit card on a regular basis, or if it is for emergency purposes.

Your next step is to search online for comparison sites that have pertinent information. Try to find out information about the types of fees that are charged and see which ones might be applicable to you. If you plan to use your credit card only in emergencies, then you might not want a card which will fine you if you don’t make a purchase every month.