Credit cards are valuable belongings that individuals in replacement with cash to meet their daily, monthly, personal, or business needs. However, using the right credit card will not only meet those pressing needs, but these credit cards can also provide rewards and bonuses when paying for expenses.
In addition, your spending rate also affects your credit score. You can have a poor credit score when you use the wrong funds to pay for particular items. For example, if you use your personal funds to pay for business needs or your business funds to finance your private expenditure, you might have a bad credit score.
Steps to Getting the Best Credit Cards
Below are steps to take to get a suitable credit card that meets your needs. They include the following;
1. Observe Your Credit Report
The first step to picking the right credit card is looking at your credit report. In your credit report is written your credit score. The better your credit score, the greater your chances of getting credit cards with great bonuses.
To properly check your credit report, there are software applications that allow you to check this report every three months. Plus, these services are free. During the checking process, you get a picture of what sums up your credit. If there are mistakes in your report, quickly issue a complaint.
Sometimes, credit errors can occur, which can reduce your credit score. But once discovered, you could contact credit repair professionals who can offer cheap credit repair. These credit repair affiliates can also give you the perfect credit score possible.
These companies also help to resolve issues like debit card fraud and can remove the collection account from a credit report. You can also look into the top ten credit repair companies which can provide top-rated credit repair.
You could also take up credit error complaints to the credit bureaus. To ease the process, The Consumer Financial Protection Bureau can provide samples of dispute letters. These credit bureaus also handle issues regarding credit card fraud.
Another alternative to checking your credit scores is through an online platform. However, your scores will differ from the credit scores your lender will see.
Different credit cards have diverse credit score requirements. Also, these requirements vary among credit card issuers. So, if you have an average credit score, it is best not to apply for cards with high rewards. Instead, you can apply for average reward cards.
2. Monitor Your Spending Rate
Observing your spending habits is the second vital step to picking the best credit card. With the credit report at hand, you can notice the items you spend money on regularly, which alters your credit score. You will also see the amount you spend on each item.
With this, you can catalog your needs and focus on the important ones. For example, when dealing with personal expenses, you can major in groceries, gas, and any other utility bill. Then, you can cut down on shopping sprees, frequent vacations, and entertainment.
The appropriate credit card tactic can increase your reward-earning ability in diverse spending categories. For example, credit cards increase the value of the reward when you spend in certain areas. Some of these might include vacation, utility bills, groceries, etc.
Also, when you choose a credit card that offers the best rewards for recurring expenses, you can gain better rewards. Such rewards could include increased miles, cash back, or points.
3. Be Knowledgeable About Different Types of Cards
The third step is to research the different cards available. This step is vital after you have checked your credit report. Then, you have categorized your spending and identified your areas of heavy expenditure. This heavy spending will indicate which credit card offers high bonuses in line with your spending rate.
Types of Credit Cards
Several types of credit cards come in handy to meet specific needs. Below are examples of some standard cards:
● Cash-Back Cards
This type of credit card benefits people who like to simplify their credit card bonuses. With this card, the individual does not need to bother about the card issuer reducing the value of the rewards. Plus, there are no bonus programs to follow.
Better still, cashback credit cards allow you to spend money on anything you desire. For example, some credit cards offer cashback rewards for categories under the gas station and streaming services. Some cards might also cover supermarket expenditures. As an incentive, you can get a higher amount of cash returns if you get a premium cashback card.
● Bank Bonus Cards
Bank bonus credit cards offer big bonuses in several daily spending categories. This card is also not rigid in redeeming points. When you desire to redeem points, you decide which form the rewards should take. For example, you can opt for an airline or hotel transfer or choose to have your cashback.
These features are what make these bank cards versatile. But, if you desire to have the highest bank bonus card, you should make use of yearly travel credits and airport lounge access
● No Yearly Fee Cards
These unique types of credit cards suit individuals who desire to reduce out-of-pocket expenses when receiving bonuses. Plus, it exempts the individual from annual fees.
Some companies offer credit cards that circulate over 4% cash back categories. These cards will also help individuals can use their earnings to the fullest.
● Hotel and Airline Credit Cards
Some hotel and airline credit cards are suitable for individuals who travel a lot. These cards benefit individuals who love to stick to a particular travel pattern. In essence, these cards assist in making these trips more relaxing and easy.
Airline credit cards can provide discounts when buying inflight. These cards can also offer free checked bags and raise your flight travels to elite status. Hotel credit cards can offer bonuses that can upgrade your status to mid-tier. These bonuses include complimentary breakfast, room upgrades, and extra points on paid stays.
4. Study Credit Card Terminologies
You should learn the credit card terms when looking for the best credit card to meet your needs. Furthermore, knowing the words will enable you to compare the bonuses across credit cards. So, let’s look at a few credit card terminologies.
● Minimum Payment
The minimum payment is the smallest amount you pay per month to a credit card issuer. If you don’t adhere to this payment, you can have last-minute fees, which can lower your credit score.
Fees are extra charges that come with credit cards. Some of these fees include balance transfer fees, annual fees, and foreign transaction fees. Late payment fees are also inclusive. Some of these fees are not as big as they seem. Nonetheless, you should know about them before you open a new account.
Your credit card rewards are proportional to your spending rate. Which means the higher you spend, the higher your premium. Examples of rewards are cash back, points and miles.
APR stands for Annual Percentage Rate. This term connotes the interest rate charged by the card issuer at an annual rate. An APR might not be significant to you if you do not have outstanding debt. In addition, for some credit cards, if you pay the total statement balance, there will be no interest charge.
Perks are different from rewards but are also valuable bonuses offered by some credit cards. Some perks include airport lounge access, airline fee credits, rental car coverage, etc.
● Welcome Bonus
A welcome bonus is an incentive aimed at targeting new customers. Well, this bonus amount varies across credit card issuers. Nonetheless, these customers must spend the minimum amount to obtain this bonus. Plus, this has to be within the first few months of opening the account.
5. Examine the Credit Application Process
Good credit will increase your chances of getting the best credit cards. So, to increase your chances of getting this card, go over certain areas which a credit card issuer might consider. Such regions might include outstanding debts and household income.
There are several vital steps involved in getting the best credit cards. However, it all boils down to your expenditures. Therefore, looking for cards that go in line with your recurring expenses is advisable. That way, you can maximize the bonuses and perks offered by different credit card issuers.