SAN DIEGO (KGTV) — Choosing the right credit card can be tough, especially with so many options available. Experts say doing your homework is essential to find out if a specific card is a good fit for your needs.
Credit card offers are everywhere — at the checkout counter at stores, on social media and in your mailbox. But knowing which one to apply for requires asking yourself the right questions.
Sarah Rathner, a credit card expert from NerdWallet, says the first step is understanding what you're likely to qualify for.
"What are you most likely to qualify for, given your credit score and your credit and financial history, because then right off the bat, you can eliminate a lot of the cards?" Rathner said.
There are different kinds of credit cards, which offer store discounts, rewards points and cashback on select purchases. Data shows about 60 percent of all new credit cards offer some type of reward.
Introductory cashback cards offer fewer perks and don't usually have a fee.
"It doesn't get easier than cashback. Everybody knows what cash is. But if you travel internationally, you might find that travel rewards cards have a lot to offer you. But those cards tend to be a little more complicated." Rathner said.
Many of those credit cards have an annual fee. The points can be cashed in to help pay for hotel rooms, airfare and get you access to airport lounges. The yearly fee typically ranges from just under $100 to as much as $900.
This fee is usually paid up front, or some credit card companies ask for monthly installments.
Before signing up for a rewards card, Rathner says to make sure the benefits outweigh the cost and to tailor your card to your spending.
"What type of spending do I typically engage in that would earn me the most points? So you can pick a card that earns more rewards when you spend the most. Whether that's grocery stores, restaurants, tickets for flights, hotel stays, car rentals, gas things like that." Rathner said.
Rathner also says to read the fine print on sign-up or welcome bonuses, because the spending minimum can be quite high.
"Sometimes it's $500 in 3 or 6 months. Sometimes it's something like $6000 in 3 months. And so if you can easily spend that amount of money on the card without going into debt, then that bonus is really just a way to make every dollar work harder for you." Rathner said.
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