In addition to a chequing account and savings account, most people also have a credit card (or more) in the pocket of their favorite jacket when they leave their house. Sure, there’s always the option of using a debit card, but anyone with economic savvy understands that a credit card gives you both more spending power and helps to build up a nice credit history when you have the right one and use it well.
With so many credit card options out there, though, how can anyone wade through the weeds and understand which card is the best for their specific needs? Should you get one that’s linked to one of the many American or Canadian Banks? Should you get a card that’s linked to a specific retailer, like a Nordstrom credit card or an Amazon credit card? What are annual fees, and what does APR stand for, anyway? It’s enough to make anyone want to bow out from the whole business.
If you’re wondering how to choose a card that will give you the best benefits, you’ve come to the right place. Read on for some go-to tips when choosing the best card for your wallet.
Do some Online Research to Make an Informed Decision
The first thing you need to do is inform yourself about the options at hand. Differences between companies like American Express and MasterCard can be significant in terms of interest rates and annual fees. Plus, when you’re reading online reviews of various cards you’ll see other, lesser known cards that may also be advantageous. Ever heard of the Simplii credit card, linked to one of the most popular Canadian banks? Well, if you’re a Canadian citizen, you’ll want to know what Simplii has to offer. Leave no stone unturned when researching what all the different cards can offer you, and compile a list of the few that seem right for you.
Get a Couple of Cards, Each with its own Pros and Cons
Once you have your list, it’s time to accept that you’re going to get a few different cards. Not too many—two or three is a good amount. Still, you should have a few that are your go-to cards for various purposes. Maybe one credit card has great cashback offers for clothing retailers, but another has better cashback options for buying groceries. Well, you’ll use the first one when buying a petite leather jacket, tee, or sweater at your favorite shop and enjoy the cashback pouring into your bank account at the ed of the statement period. The other credit card will be on hand when you’re buying groceries, and you’ll enjoy getting the maximum cashback from that one, too. There are travel cards that pay more for travel-related expenses, and cards that are best used for business purposes or at coffee shops. Think where you spend the most money, and get cards that will be useful for charging purchases from those vendors.
It’s a good idea to always pay your bill on time.
Whatever type of credit card you end up with, you need to remember to pay it off on time. A line of credit isn’t endless, and you’ll be spending more on accrued interest than your skinny jeans cost in the first place if you aren’t careful. A debit card makes this easier, of course, because the amount comes right off of your chequing account. Still, as mentioned, a debit card doesn’t help much with your credit. Consider scheduling a reminder on your smartphone to ensure that you make your bill payments on time to avoid fees or fines.
The world of credit cards may seem confusing, but it doesn’t have to be. Do your online research about which card is best for which purpose and which has the best APR (annual percentage rate) options. Whatever your choice ends up being, don’t forget about those bill payments.