3 Steps to Find the Perfect Credit Card
1. Decide if an Annual Fee is Right for You
The first step in choosing a credit card is to decide between one with an annual fee and one with no annual fee.
The answer to this question is usually quite simple, but it requires some high level math. In general, low spenders (or someone who does not travel) should use a no annual fee credit card while high spenders (or frequent travelers) can benefit from annual fee credit cards.
Above is a very basic example, but it shows how you need to be a “high spender” in order to offset the annual fee associated with credit cards.
In the first example, the 0 earned with the annual fee card was offset by the 0 annual fee. You would have been better off earning 1.5% cash back (or ) with the no annual fee card.
However, in the second example, you earn enough with the annual fee card (0) to more than triple the annual fee. In this example, the clear winner is the annual fee credit card.
2. Choose Your Rewards Category
After deciding between an annual fee or no annual fee credit card, you need to decide on what rewards category you want.
Some cards simply offer cash back, while others offer travel points, hotel points, airline points, and many other types of rewards or points. Obviously, you’ll want to ensure that the rewards category you choose are something that you will use.
If you don’t like to travel, don’t sign up for travel rewards cards!
On the other hand, if you are a frequent flier, then prioritizing an airline card will likely make sense for you.
3. Do the Math and Find the Perfect Card
Once you know what type of credit card you want based on your spending levels (annual fee vs no annual fee) and rewards category, it’s time to find the perfect card for you.
The best way to do that is to take a numbers-based approach.
Luckily, Just Start Investing has created a credit card tool that will take this numbers-based approach for you. This custom tool will automatically choose the best credit card for you based on your spending habits.
Using this tool is extremely easy. At a high level, you simply input your typical monthly spending by major category. Then, the tool will recommend the best credit card for you based on this spending.
In fact, it will even help answer the question from point number one: if you should use an annual fee or no annual fee credit card.Want to get the highest quality products with the lowest prices while shopping? vist www.promosstore.com