“How to Choose the Right Credit Card for You” plus 1 more

How to Choose the Right Credit Card for You

Posted: 26 Jan 2012 04:00 AM PST

Credit cards can be great financial tools. However, as with all things financial, if you want your decisions to be successful, you need to do what’s best for you. When choosing a credit card, you want one that offers you the best combination of perks for your individual financial situation.

The right credit card can help you find financial freedom — as long as you pay off the balance each month and follow good spending habits. Your credit card should match your spending plan and priorities, and help you reach your long-term financial goals.

What Do You Want the Credit Card For?

Your first issue should be to figure out what you want the credit card for. You should consider the reasons you are getting the credit card. Some reasons to open a credit card account include:

Build your credit history
Consolidate debt and pay it down quicker
Earn rewards to redeem for free travel, merchandise and even cash back
Emergency access to funds

More on Credit Cards

Consider the reasons behind opening a credit card account. This will give you your first idea of what might work best for you. For someone trying to rebuild his or her credit, a secured credit card might be the only option at first. If you are looking to consolidate debt so that you can pay off your credit cards as quickly as possible, a card offering a 0% balance transfer deal might be preferable, even if there isn’t a rewards program. Think about why you plan to use the card, and choose one that will best help you reach your goals.

Other Things to Consider

Of course, once you have a general idea of how your credit card will be used, it’s time to consider secondary factors. Do your research, and find out what might work best for your situation, and what will help you maximize your money. Things to keep in mind:

Rewards that you will use: If you want to make use of a rewards program, it’s important to make sure that you will actually use the rewards. This means that you need to think about what your priorities are. Do you prefer travel rewards? Get a card that offers generous points and easy-to-redeem opportunities for airfare and hotel states. If you just want the cash, consider cards with generous programs, including those with rotating categories that earn more, depending on what you buy.
Interest rate: Those who pay off their credit cards each month don’t have to be as concerned about a high interest rate. However, if you get a credit card in the hopes of financing large purchases for three or four months, or if you regularly carry a balance, a lower interest rate becomes more important. Consider your habits as you choose a credit card.
Intro period: If you are transferring a relatively low balance to a new credit card, a short introductory period might not be a big deal — especially if you like the rewards program the card has. However, if you have a bigger balance, pay attention to the intro period; you’ll need a longer period in order to get the most benefit out of the interest savings. In some cases, it might be worth it to transfer to a card with 2.99% rate for the life of the balance, rather than to get a card that will stick you with a 19.99% interest rate after nine months.
Other perks: Find out what other useful features the credit card might have. Some users like concierge services. Others like cards that offer flexible rewards programs. If you shop at a certain store, an associated card can provide you with extra perks that you will use. Find out about the ability to set your own due date, occasionally skip a payment, or receive some other benefit. Sometimes, these “fringe” benefits can make a bigger difference than you might think.

No matter what credit card you apply for, you want it to fit your style, and your spending priorities. Take some time to think about what is most important in a credit card, and how a credit card can be used as a tool to help you reach your financial goals. Then apply for whatever card best fits your needs.

Dollar Matters: Credit Concerns

Posted: 25 Jan 2012 09:31 AM PST

Your credit is an important part of your financial life. Making sure your credit is in tip-top shape should be one of your priorities. As you ponder the importance of credit, and how you can improve your situation, here are some posts from the past week to help you along:

How an Email from Credit Sesame Saved Me Over $70,000 and I Love Them For It

At Good Financial Cents, Jeff shares how Credit Sesame helped him save a great deal of money. The services offers information about your credit situation — and how it can be leveraged into better deals.

Is Credit Karma a Scam?

It seems too good to be true, but Jim at Bargaineering offers you a look at the ins and outs of Credit Karma. It’s not a scam, and it can help you keep tabs on your credit situation.

Using Credit Repair Companies is a Big No-No

Over at Wealth Pilgrim, a guest writer explains credit repair companies, and describes how you can get a true consultation to help you improve your credit situation.

Secured Credit Card vs. Prepaid Debit Card: What’s the Difference?

Best Rates In takes a look at the differences between secured credit cards and prepaid debit cards. If you are trying to rebuild your credit, a secured card is the way to go.

5 Situations When You Should Use Your Credit Card

Kristie at the Quizzle blog takes a look at the times when using your credit card is the right move. You receive certain protections — and you can even earn rewards points.

How to Get Your Credit Card’s Interest Rates Lowered

Over at Credit, Eh, guest post Andy shares some helpful tips on lowering your credit card interest rate. If you want to pay down your debt faster, lower interest rates can help quite a bit.

How to reduce your debt?

Jim at Retire Happy Blog takes a look at debt reduction. Less debt will help you save money, and improve your credit rating. He offers a step-by-step look at what you can do.

How to Pay off 2011 Debt Faster with a Balance Transfer Card

Want to get rid of your 2011 debt? Jennifer at Go Banking Rates takes a look at how you can use a balance transfer to reduce the cost of your debt and pay it off faster.

Carnival

Totally Money Carnival hosted @ Family Money Values

Carnival of Wealth hosted @ Control Your Cash

Carnival of Financial Camraderie hosted @ Financial Success for Young Adults

Carnival of Personal Finance hosted @ Diva in Debt

Carnival of Financial Planning hosted @ Credit Cards Canada

Life Insurance Blog

Thursday, January 26, 2012