When you're getting ready to redo your living room you probably spend a good bit of time thinking about the what color paint you're going to buy. You want a color that reflects your taste and lifestyle--and one that goes well with the furniture.
You should spend at least the same amount of time pondering your options when you're ready to apply for a credit card. While it's certainly a lot more fun to look at paint color chips than it is to read credit card descriptions and agreements, your choice of credit card is likely to have a lot more impact on your life over the long term than the color of your living room.
So how do you find the credit card that will work suit your lifestyle and your financial situation? Ask yourself these questions before you make your choice:
Do you plan to use your credit card for everyday expenses and to pay it off at the end of each month? If so, the card's interest rate may not be as important for you as it would be for someone who wanted to use the card to stretch out the payments for a big ticket item over several months. If you're not likely to pay off your card each month, you'll need to check the interest rate. The difference of a point or two in an annual percentage rate can have a big impact on your budget.
You can get some good low or no-interest deals on balance transfers. Just be sure to check for the balance transfer fee, the annual interest rate or for any other fees that could decrease the savings you'll realize by transferring your credit card debt to a new card.
It's easy to find credit cards that don't charge fees, and in most cases you'll want to do that. But there are times when paying an annual fee may be worthwhile, because the card benefits you receive more than make up for the extra expense.
Consider United's MileagePlus Explorer Card, which costs you $95 per year after the first year. But the card entitles you to perks like boarding flights before general boarding and getting the first bag for you and a companion checked for free. A frequent flyer might think the extra cost is well worth paying for those privileges.
If you like to travel, a card that allows you to earn airline miles or get discounted rates on hotel and car rentals may be a good fit. If you're more the stay-at-home type, bypass those airline miles to look for cards that reward you with restaurant gift certificates or cash back. You can also look for cards that cater to your special interests. If you're a music fan, for example, you might want to consider something like Sony or MTV-branded credit cards, which provide discounts on merchandise and/or tickets to special events.
Although some credit cards have stopped charging a fee for transactions made outside of the U.S., others still impose that additional charge. You'll save money if you can go with a card that's more traveler-friendly.
Are you an animal lover? A breast cancer survivor? A proud graduate of a certain university? You can help support an organization with an affinity credit card that gives them a certain percentage of any charges made with that card.
If you're happy with your current credit card except for the interest rate you're paying, the bank may be willing to offer you a better deal. It can't hurt to ask.
Need more help? The U.S. Federal Reserve's Consumers Guide to Credit Cards offers tips on how to read credit card offers and evaluate them. That's an important step in finding the credit card that's just your style.