Are you interested in obtaining a credit card? The number of such options is rather extensive, thus complicating the selection process for candidates. Your FICO score is of crucial importance in making the right choice, as it has a direct impact on your eligibility.
Banks provide individuals with a diversity of credit cards, suitable for applicants with different scores. Some options are designed to provide rewards, whereas others focus on no-interest periods.
Nevertheless, most individuals are required to make alterations in their spending habits in order to qualify for the option they want. When looking for the beste credit card, make sure to gain insight into the most popular options.
Follow these helpful tips to make the best choice.
Check your FICO score
The primary step towards choosing the best credit card is checking your FICO score, which is of great importance to banks. In order to be offered some of the most favorable options, your FICO score is supposed to meet the bank’s criteria.
Moreover, the poor score range is between 300 and 579, whereas the fair score range is considered between 580 and 669 points. The majority of lenders aren’t willing to collaborate with people whose scores are below the average because of the high level of risk. According to the FICO scoring model, the good score range is between 670 and 739 points.
Individuals whose scores range between 740 and 799 points are considered trustworthy by lenders, whereas borrowers whose FICO scores exceeds 800 are believed to be extremely low risk. After having your score checked, you are expected to look for credit cards whose requirements match your results. In case your score is too poor, try your best to improve it.
Prior to working on your spending habits, make sure you check the accuracy of your credit reports. It’s common for bureaus to make errors when providing individuals with such reports. Upon noticing an error in yours, you are advised to report it immediately and have it corrected as soon as possible. Click here to learn five useful ways for increasing your FICO score.
Choose the best type
The next step towards obtaining a credit card that fits your needs is having a detailed look at the types provided by issuers. There are three essential types to take into account, whose features vary in accordance with one’s score. For instance, certain options are designed for the purpose of improving one’s credit, whereas others are suitable for individuals who wish to save money on interest. In contrast, the last type is appropriate for people with stellar scores, enabling them to earn rewards.
Furthermore, the cards designed for building credit are the best alternative for borrowers with bad or fair FICO scores. These are also appropriate choices for college students and other individuals with no previous experience in this field. The eligibility criteria for these cards aren’t overly strict, only requiring users to make a small deposit, which is returned to them after the account is closed.
In contrast, 0% APR credit cards are preferred by individuals who wish to eliminate their debts or need money to finance purchases. Users are provided with an interest-free period, which is a minimum of one year. A large number of people are interested in getting such cards prior to making a costly purchase. By paying off the balance in the course of this period, users won’t have to pay any money for interest. Nevertheless, 0% APR cards are generally issued to individuals with FICO scores above the average.
Ultimately, reward cards are an excellent alternative for people with no debts. These are highly preferred among users due to the large number of perks in the form of cashback and points that you can spend on traveling, grocery shopping, petrol, etc. In order to encourage individuals to get reward credit cards, issuers offer extra perks to new members during the first year, such as a double cashback.
Ask the right questions
After selecting a type of credit card you would benefit from having, make sure to ask the right questions when having a consultation with the issuers. For instance, people interested in acquiring a secured card are supposed to inquire about the amount of security deposit they are expected to make. Even though low deposits stand to benefit users, some issuers relate the amount of the deposit to the credit limit.
Another important aspect to inquire about is the possibility of an account upgrade over time. Make sure you select an issuer that allows upgrades in order to enjoy better terms after a certain period. The following link, https://www.investopedia.com/terms/s/securedcard.asp, explains the structure and terms of a secured credit card.
People looking for low-interest or balance transfer cards are advised to inquire about the length of the 0% APR period. It’s paramount for the one you choose to provide you with sufficient time to pay your debts off without any interest. In case you are interested in a balance transfer, make sure you learn everything you can about the balance transfer policy, such as the cost of the transfer fees and the debt types you are allowed to transfer.
In the event of a reward card, look for one that provides high earnings for the category you prefer the most. People planning to make payments abroad are strongly advised to choose one with no fees related to foreign transactions. Also, you should learn about the average period it takes for the rewards to be earned.
Select the best option
When hesitating between a few options, there are certain factors to consider in order to make the wisest choice. For example, when choosing between secured cards, make sure you select one that increases your limit over time, as well as provides you with an interest on your deposit.
People looking for the right low-interest card should be offered a debt payoff planner in order to come up with a payoff plan. Also, you are suggested to find an option that involves no late fees or penalties in order to avoid paying extra money when falling behind on payments.
Last but not least, when choosing a reward card, have a detailed look at the bonus qualifications requirements. Find an issuer that doesn’t oblige users to make large payments in order to qualify for bonuses. If possible, pick an option with no expiration date on the earnings. Consequently, you can use them at your convenience, until your account remains active.
The bottom line
Take your time in the decision-making process.
Consider all your options before selecting the most favorable one!