Determining the right credit card relies on several factors, one of which is on how you intend to use the card. This guide will help you decide on choosing credit card that best suits your needs and help you save money or earn rewards.
In This Guide...
Choosing A Credit Card That Suits You
When getting a new credit card, it’s crucial to understand the purpose you plan to use it for. Is it to pay down debt, improve your credit rating, fund a large purchase, or earn rewards.
The Following shows the different types of credit cards, and each is intended for different spending demands.
| Spending Demands | Type of Credit Card | How it works |
|---|---|---|
transferring an existing balance | Balance transfer credit card | Transfer the amount you owe for a or lower interest rates on your repayments |
low interest or free interest fees | 0% purchase credit card | Spread the value of a large purchase over a longer period |
transfer an existing balance and spend interest free | 0% balance transfer credit card | Transfer the amount you owe for a or lower interest rates on your repayments or free interest rates |
repairing my credit rating | Bad credit credit cards | Satisfying credit card payments each month to help repaid or rebuild your credit |
earn rewards each time I spent | Rewards & airmiles credit cards | Cashback and vouchers each time you shop are offered as a reward. |
credit card that I can use on my holiday trip | Travel credit card | Lesser charges when used abroad unlike your standard credit card |
Where Will You Use Your Credit Card?
Spend Abroad
You can use most credit cards overseas, but it can be costly. There are charges that you’ll acquire if you spend your credit card abroad.
If you travel often and prefer to use your credit card, you could find one with a low-interest rate and no fees for transactions or cash withdrawals.
Compare travel credit cards HERE.
Paying Debt
If you want to pay down your debt, a 0% balance transfer could make it feasible. It can also work if you one several credit cards. You can transfer the balance of from one or more cards to your new credit card with 0% balance transfers. You’ll be paying for this balance through monthly instalments. However, you must make sure to pay off this amount since free period on some credit cards could last up to 29 months.
However, in cases of overdraft or any existing loan, you can qualify for a 0% money transfer card. These are cards that functions similarly like your balance transfer card, except that you can transfer money from your new card to your bank account.
Build Credit
If you have a poor credit history, you can resort to credit builder cards. These are credit cards with high-interest rates but low credit limits. This works by paying off the balance every month to gradually improve your credit rating.
Large Purchases
Making large purchases is possible but you have to be cautious in spending your money. You have to keep in mind that you should only spend what you can afford to pay. This could be a problem for people who can’t control their spending.
On the contrary, if you can afford to spend money all in one go, you should get a 0% purchase card. These type of cards offer lengthy pay off for the balance. This means you’re given time to settle payments before the free interest period ends.
Earn Rewards
Many credit cards these days allow several advantages and rewards to boost incentives. The rewards can vary but some of the usual standard rewards offered can include:
Rewards card that gets you vouchers or in-store points for your preferred shops when using the card.
Air miles card which can get you air miles to set towards flights as well as airport lounges access.
Cashback that can give you a portion of cash each time you spend on the card.
Can I get Credit Card Even With Bad Credit?
Upon applying for a credit card, card providers will conduct a credit check. There can be a huge problem when you had previously owed money and:
Went on default
Declared bankruptcy or was served a CCJ or County Court Judgment
Have not settled any overdraft
Exceed beyond your credit limit
Was declined by other providers or lenders
All these can affect your credit rating. This means a prepaid card or other alternatives will suit you best.
Things To Consider When Choosing The Right Credit Cards
Among the points, you should contemplate when choosing the right credit card include fees, interest rates, interest-free period, and rewards. Compare credit cards HERE.