In this day and age, a credit card is almost indispensable. Owning one benefits you in countless ways, which include boosting your credit score, protecting you from scams, allowing you to spend more, and rewarding you for spending. However, not all credit cards are alike, and you should find one that best fits your lifestyle. 

There are several factors to take into account when choosing the right credit card. One crucial thing you’ll need to remember to do is compare credit card rewards. It’s also important to consider factors like interest rates, flat fees, cashback opportunities, and more. 

If you’d like to apply for a credit card but feel overwhelmed by all the options out there, this article will help answer some of your questions. In this article, we’ll go through six factors to consider when signing up for a credit card. 

#1 - Interest Rates

When you make a payment with a credit card, you’re essentially borrowing money you’ll need to pay back at a later date, usually with interest. Find a card that lets you pay the least amount of interest in the long run. 

Some cards don’t charge you interest for a set period, or if you make your repayments within a certain timeframe. While these cards might charge higher fees elsewhere, they are an option, especially if you have a steady income and regular stable spending habits. Make sure you’re confident in being able to pay off your debt, and don’t take any unnecessary risks.

#2 - Fixed Fees

Besides interest rates, credit cards also charge fixed fees, either on an annual or a monthly basis. It’s also important to look out for any unexpected fees your card might charge you. 

Often, lower fixed fees mean higher interest rates, and vice versa. You’ll need to sit down and calculate what sort of payment plan benefits you the most given your spending habits and financial situation. Especially with credit card companies advertising low or zero fixed fees for some time, make sure you check the offer isn’t too good to be true by finding out the full picture.

#3 - Rewards

Most credit cards offer rewards for certain types of purchases. As you go through your options, you’ll want to find one that offers rewards that will be useful in exchange for the sort of purchases you make anyway. 

There’s a huge range of potential programs your card provider might offer, including aeroplane tickets, discounts at certain establishments and gift cards. What purchases qualify for reward points often depends on the establishments your card provider has a partnership with. For instance, spending at specific restaurants or clothing stores might earn you points. 

#4 - Cashback Opportunities

Cashbacks are a specific sort of reward your credit card might offer. As the name suggests, cashback allows you to earn some of your money back when you make a purchase. It’s not the same, but similar to a discount. 

Credit cards will differ in the type of cashback opportunities they offer. For instance, one card might offer you 5% back on groceries and 3% back on furniture, while another might offer 4% back on gas and 2% on pharmacies. 

#5 - Credit Limit

Most credit cards include a credit limit, which is the maximum amount of money you can spend using your card in a given amount of time. Generally, most people will want to pick a card that lets you spend more money. 

How much credit limit you get depends largely on your credit history. If you’ve built up a good track record of paying your debts off on time, providers are more likely to trust you with a higher limit. On the other hand, you might be offered a lower limit if this is your first card since you won’t have much of a credit history yet. 

#6 - Customer Service

When you sign up for a credit card, you become a client of whatever financial institution issued the card. As with any provider-client relationship, it makes sense to find a company with a level of service that matches your needs. 

While you might not think you’ll ever need expert customer service with your card, you’re almost certain to run into situations where you’ll need assistance, and where a helpful provider is a lifesaver. For instance, you might want to ask about unexpected charges you discover on your card bill, or quickly cancel your card in case of loss. During times of financial worry, or stressful situations such as if you’ve been robbed, the last thing you want is to struggle to get the appropriate help, as fast as possible.

Conclusion

We’ve just listed some of the most important factors to consider when signing up for a credit card. As you go through your options, choose the card that best aligns with your lifestyle. You may also need to whip out a calculator to determine which one saves you the most money long-term. 

Of course, it’s entirely possible to own more than one credit card, and this may be the best option for you if you want to spend money as efficiently as possible. Still, it’s important to choose carefully, as signing up can sometimes take a while, and is a significant commitment.

If you don’t yet have a credit card or are searching for a new one, we hope this article will give you the push you need to do your research and make the best decision given your financial situation.