With so many different credit cards out there, picking a new one can be challenging. But by taking the time to research your options, you can find a credit card that supports your financial goals and fits your lifestyle. Whether you’re looking to build credit for the first time or earn points on your purchases, here are a few things to consider when choosing a credit card.
Understand your financial needs and goals
Reviewing your credit, spending habits, financial goals and income may help you decide what type of credit card works best.
Here are some questions to ask yourself.
What does your credit look like?
Creditworthiness requirements can differ depending on the card issuer and type of credit card. Checking your credit report before applying could help you determine which cards you may qualify for.
What are your spending habits?
There are different types of rewards credit cards tailored to different spending habits. For example, some rewards credit cards allow you to earn a flat rewards rate, while others let you earn additional miles or points when you use your card to pay for certain purchases, like gas, groceries or travel. Knowing which categories you spend the most on may help you make a decision.
Do you plan to carry a balance on your credit card?
Your credit card’s interest rate can impact what you pay if you carry a balance. If you plan to pay your balance in full each month, a small difference between interest rates may not feel as important. If you’re looking to pay a big purchase off over time or transfer a balance, a low intro APR card may be the right move.
What do you want to achieve with a credit card?
Do you want to build credit, earn points or miles, manage your existing debt or gain financial flexibility? With so many types of credit cards available, it may help to set a particular goal before comparing cards and applying.
Decide what type of card you’re looking for
Depending on your financial needs and goals, one type of credit card may make the most sense. Here are some common types of credit cards and how they may benefit you:
Rewards, travel and cash back credit cards: Some credit cards let you earn points, miles or cash back on your purchases.
It can be a good idea to choose the type of rewards card that aligns with your spending habits and financial goals — do you want to earn miles you can redeem for flights? A travel card might be right for you. Do you spend a lot on groceries? A card that offers a higher percentage of cash back at supermarkets may be the right move.
Secured credit cards: Secured cards require a security deposit, typically equal to your credit limit. They can be a good option if you’re looking to build or rebuild your credit history. By using the card responsibly and making on-time payments, you may be able to establish the credit score you desire over time.
Student credit cards: Student credit cards are designed for students with little to no credit history. These cards often come with lower credit limits. They may offer perks like no annual fee and the ability to earn points or cash back on purchases. Using a student card responsibly can help you build credit while still in school.
Low intro APR cards: Low introductory APR credit cards can be useful if you need to make a large purchase or pay off an outstanding balance using a balance transfer offer. These cards typically offer a lower introductory interest rate on purchases, balance transfers or both for a set period, giving you time to pay down your balance with low interest charges. Be sure to understand when the promotional rate ends and what the regular APR will be afterward.
Choosing a card to apply for
It can be worthwhile to research the requirements for the cards you’re interested in before applying. Some cards with lower interest rates or rewards programs could have more stringent creditworthiness requirements.
If you’re unsure where to start, it may help to see what cards you’re pre-qualified for. You may have received a credit card pre-qualification offer in the mail. While these letters don’t guarantee approval, they can be a helpful starting point in your search. Many credit card issuers also let you see what cards you’re pre-qualified for online. Pre-qualification has no impact on your creditworthiness.
Take some time to consider your spending habits and needs before choosing a credit card. When you’re ready to apply, gather the necessary information, such as your Social Security number, income details and employment information. Be prepared to provide accurate personal and financial details during the application process.
Many credit card applications can be completed online. After submitting your application, you may receive an instant decision or be notified later if additional review is needed.
Disclosure: This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.
