Choosing a credit card might be one of the biggest financial decisions you make this year. There’s a lot of different credit cards out there and you really need to figure out what kind of spending you’ll do. It’s important that you’re realistic about what kind of limit you want, as well. I recently got a new credit card after a few weeks of serious hunting to find one that would best my needs. From reading online credit card surveys to checking the fine print, I really put in the extra effort to make sure I got a good card for my personal needs. Here are my tips on how to choose a credit card, take a look and get yourself prepared to make a really educated choice regarding credit cards!
1) Check Online Surveys
There are a number of credit card surveys, such as the uSwitch survey, which put the top credit cards to the test to see who comes out on top. Unsurprisingly, American Express came out on top as the best overall credit card. This card consistently ranks in the top few spots year-after-year and when you’re choosing a credit card you want one that offers exceptional value for money, customer support and usability.
2) Think About Points
Are you looking to collect airpoints or reward points from your credit card? If so, then you should look at options your bank offers that meets your needs. I personally decided I wanted a card that gave me points I could redeem for free flights. Unfortunately, credit cards in New Zealand are not that competitive and I get a low number of points compared to my spending, but it all adds up.
3) Get a Realistic Limit
When I applied for my credit card I was automatically given a $25,000 limit, which is a terrifying amount of money for me personally. I immediately changed my credit card limit down to $10,000 which I think is a lot more manageable. I don’t really use my credit card for credit, so much, more like a debit card with some extra features. Don’t make the mistake that so many others have made and get yourself into credit card trouble.
4) Read the Fine Print
It’s really important that you take some time to read the fine print so there are no nasty surprises. This includes reading about any interest you might recur and what kind of time frame you need to make payments within. Credit cards can be a great way to improve your overall credit rating if you’re careful and keep up to date with payments. If you regularly miss payments and overspend, your credit card could have a negative impact on your credit rating – so be careful and think long term, too.
