Nowadays, there are plenty of credit card options to choose from. Understanding the options you have and getting the right question is what to do to be able to find a credit card that suits your credit situation. With so many options, finding the right credit card that suits your preferences can be overwhelming. But with the right information, it’ll easily clear up confusion and help you make informed decisions on the credit card to use. We will show you the steps to take to find the right credit card for your needs.
Step 1. Check Credit Score
One main factor to look for when selecting a credit card is your score. If your credit score isn’t very good, don’t apply for a card that needs good credit. Apart from the chances that the application may be turned down, you will get a hard inquiry on your report.
Every time you apply for a credit card, a hard pull is triggered from the lender, which will allow for a review of your credit score. Normally, a hard pull reduces your credit score. If you know your credit score, you will easily refrain from applying for credit cards you aren’t likely to get approved for, which protects the score in return.
A credit score that ranges from 800-850 is excellent. But, if your score is 300-579, it is considered poor, and it would not be good to apply for a credit card that requires a very good score.
Step 2. Decide the Type of Card You Need
Sounds easy but if you are thinking of rewards credit cards, you need to check your budget first and know your biggest expenses. If you can’t find a card offering rewards, just go for the card providing rewards to cover your expenses.
Without a budget, it will be challenging to know the type of credit card you require. It is ideal to get a credit card according to your budget. With this structure, it is easier to avoid overspending.
You can easily fall into credit card debt if you don’t have a structure that prevents you from overspending.
There are different types of credit cards:
Student credit cards which are mainly for students who need help building their credit.
Reward credit cards are a type of credit card that offer cash backs or points. Some cards offer a certain percentage on all of the purchases you make, like 2%.
Cash-back credit cards provide cash-back rewards on daily expenses. They come in various varieties; for instance, you will find some offering rewards on all purchases, while others may only provide rewards in particular categories. Similarly, there are a few credit cards that provide generous rewards in certain categories but tend to cap their rewards at specified amounts.
Secured credit cards are a better option when rebuilding or establishing your credit. You must make a deposit; however, these cards will help increase your score if used properly.
0% APR cards have zero introductory rates on the purchases on the balance transfers. They are the best type of credit cards to consider if you want to make larger purchases and wish to pay within a specified period without interest.
Balance transfer credit cards often have zero percent introductory APR, which enables you to avoid credit card debts. You may transfer the debt from other cards and then repay it without incurring the interest during the introductory period.
These are a few popular types of credit cards, so take time to find out what’s the best option for you. There are various categories based on the credit score like credit cards for bad, fair, and excellent credit. After deciding on the credit card type that suits your needs, compare them in the same category.
Step 3. Apply for your Credit Card
When you find the credit card that’s best for you, you can apply for it. However, before applying, you need to get pre-qualified. Prequalification will lead to soft inquiry that will help the card issuer to know your credit. The good thing is that a soft pull won’t affect your score. But remember that prequalification does not guarantee that your application will get approved.
Ensure you follow the card issuer’s directions when you are ready to apply. Provide all the needed information, which is usually identification details like an Aadhaar card, PAN card, etc.
Once you submit the formal application, the lender performs a hard inquiry, and it can lower your score. The approval may take some time, and in some cases, it could take minutes for some private lenders.
Final Words
As we wind up, we can say that selecting a credit card is an art and a science. It is an art because you are selecting a card that reflects your spending habits, personality, and lifestyle. On the other hand, it is a science as it involves keenly analyzing features like annual fees, rewards, and interest rates to find the one that’ll provide value for your needs.
When choosing a credit card, you need to consider your score first. From there, decide the type of credit card you need. Now you only need to apply for your card at last. Remember to use it wisely. If you don’t qualify for a credit card, there are still other options that await you. You can get a personal loan online with minimal requirements.
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