How To Find A Credit Card For My Lifestyle
Did you know that with the right credit card, you can fund your lifestyle AND earn rewards? The more you swipe your card, the more points you can earn. There are specialized credit cards from merchants and financial institutions that offer unique perks for you.
What To Consider?
Your Spending Habits
A credit card is an open line of credit. It’s essential to evaluate our money habits first before opening a credit card. You need to ask yourself: Can I handle the amount I borrow with each credit card transaction? For example, if you are an impulse buyer, will you be tempted to hit your credit card limit each month? Any transactions not paid at each statement accrue interest, increasing the original cost of the item you purchased. If you can handle the revolving door, a credit card can be leveraged to build rewards and earn you more in the long run.
Positive Impacts
- Financial stability
- Credit score stepping stone
- Earn cashback and merchandise through rewards
Negative Impacts
- Debt accumulation
- Fees
- Credit score slippery slope if not properly managed
Rewards
Most credit cards come with a rewards program. For a retail credit card, the merchant may entice you to sign up by offering a one-time discount or in-store credit. For a financial institution’s credit card, you are often approved for larger limits than what you would get from a retail credit card. A financial institution’s credit card is also more open-ended. Financial institution reward programs are more exclusive! Every swipe at any merchant will earn you points. These points can be redeemed for cashback, merchandise, travel points, and more.
If you have a favorite store, it wouldn’t be a bad idea to sign up for their rewards credit card if it means you get exclusive deals and discounts. If you want something more broad, shop around at financial institutions that offer the best interest rate and the best rewards program that fits your lifestyle.
Credit Limit
When you first open a credit card, you will be given a credit limit, which is the maximum amount of money you can borrow on the card. Your credit limit is determined by reviewing many factors like credit score, credit history, and debt-to-income ratio. Someone with no credit or really poor credit may have an initial credit limit as low as $100, but those with fair or good credit may qualify for credit limits of several thousand dollars or more. Whatever the amount is, remember that you have to pay it back!
Common Types Of Credit Cards
Travel Card
Are you a traveler? A credit card that specializes in travel can help cover airfare, hotels, transportation, and more. With each swipe from everyday purchases like gas or groceries, you are that much closer to your next vacation.
Retail Card
Does your treasured pastime involve walking up and down store aisles, looking for the best bargains? Pick your favorite shopping destination and check to see if they offer a credit card. This card may offer a sign-up bonus, exclusive discounts, or have a points system that earns you free merchandise.
Rewards Card
Need something a bit broader? Look into a standard rewards credit card. A general card will reward you with a certain percentage of your transactions. This percentage will build and build in points, redeemable for all kinds of things, like gift cards, cash back, merchandise, and more.
Avoid opening every credit card available to you. The more you open, the more it will affect your credit score in the long run. Instead, choose which one best fits your needs and your lifestyle.