Choosing your credit card, like everything else in your financial life, requires some thought and intentionality. It’s not like changing your quote where you can have it swapped for another at the slightest inconvenience. Choosing a card, in a way, is a financial commitment that can cost you if not taken seriously. If you have checked your credit score, and it is at least equal to 500, which is relatively average according to UK standards, then you can go ahead and explore the following as you choose the best credit card for you. If it falls below 500, you will have fewer options, but this post will help you make heads and tails of them,
Your Spending Habits
The first thing you want to get behind when choosing a credit card is your spending habits. Are you frugal? Do you have a well-worked-out budget that ensures you not only stay within your limits but can also pay back the entire balance each month? If you have sufficient experience living within your means, you are willing to sacrifice takeouts for home-cooked meals. Your entertainment schedule includes taking advantage of low-hanging fruits like European online casinos which offer brilliant bonuses and sign up offers for credit card users, budget movie nights with friends, or taking on DIY projects; then, you’re better off with a credit card with more interest-free days.
However, if you realize that it might be difficult to pay off your balance, you should look for cards with the cheapest annual percentage rate (APR). This is the cost of borrowing on the balance of the card you don’t pay back monthly. You should consider getting a No Frills card. One of the benefits of these No Frills cards and why they are popular in the UK is that they offer interest rates anywhere between 7 and 15%, which is significantly manageable compared to other cards that require the borrower to pay rates above 20% and still contend with annual fees of up to $500 yearly.
What’s in it for you?
If you’re thinking what’s in it for you, you’re not wrong to think so, and you’re certainly not alone. Many of these credit providers offer their services at exorbitant rates, and it’s only fair that you get something in return.
Rewards Credit Cards
If you want value back on money spent, look no further than reward credit cards. There are several to choose from, with some offering rewards such as free miles when you next take a trip, cash back for you to spend as you see fit, or points on their system. These points can then be spent at your discretion, whether to purchase a plane ticket, a movie ticket, cash back, or merch.
With so much on offer, it should come as no surprise that these cards are some of the most complicated to own. The first hurdle that disinterests most people is that they often come with significantly higher rates and annual fees, although it matters somewhat little because the offer is mostly reserved for people who have excellent credit and will be fine with paying whatever is asked. The second issue, even for people who can afford it, is that it can easily become overwhelming with all the information they need to jog.
Depending on the provider you end up with, you have the option of a tiered reward system where you get bonuses on certain spending categories. You could have a flat reward rate regardless of the categories where you spend or decide to rotate the rewards altogether throughout the year or biannually.
Store Credit Cards
Store credit cards are exactly what they sound like: credit cards that are offered by different retailing outfits. The right store credit card is worth it and is quite handy in certain situations. For instance, they are a great workaround for people who have less-than-stellar credit scores and don’t want to commit to a secured credit card. Even better if you shop often with that particular retailer as they might offer discounts, among other perks.
Being a store credit card does not always mean you can’t shop elsewhere. If the card is open-looped, you can, although it may attract higher interest rates.
Check your options to determine which card is perfect for you. Explore as many as possible and choose the one that best suits your spending and lifestyle.
