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This chronicle is part of Power Money Moves, CNET's coverage of colorful money decisions for today's changing world.
With so many credit card options to settle from, trying to find the best one for your financial plan goals isn't always easy. Each credit card comes with its own benefits and features, so it can feel like you're comparing apples to oranges. Plus, with rising interest rates and record-high inflation, you'll want to get the most out of your credit card at what time also avoiding pitfalls and penalties.
Many credit cards accounts cash back, welcome bonuses, financing opportunities, steal protections, travel insurance, annual statement credits and latest perks. But these cards can also easily get you into debt, tank your credit net and subject you to paying thousands of dollars in insensible. When you're choosing a credit card, evaluate your risk tolerance and grand your spending behavior and budget.
We'll walk you above how to define your money goals and sift above card options, so you can find the credit card best advantageous to your financial situation.
First, know what you want your credit card to do
If you're trying to keep the number of credit cards in your wallet manageable while aloof taking advantage of perks, you'll need to prioritize. Here are some of the current financial goals people want to see with their credit cards.
Improve or acquire your credit
One of the basic rules of the American plan system is that having a strong credit score can help you open many doors -- but bad credit can discontinuance them, too. If you're considering buying a house or a car, having good credit will help you get the best loan calls, which means your loan could be less expensive overall. If you're planning to rent an apartment, apply for a new job or get a cellphone requisition, your credit score may be the difference between tying approved or denied.
Having an open credit card account for on your credit report and using it frequently in a calculated way -- paying your bill on time every month and silly less than one third of your available credit -- is a surefire way to acquire and maintain strong credit.
There are cards designed specifically for those with bad credit or fair credit. These cards may have less frills than rewards credit cards, but they can help you build your credit so that you can qualify for better features in the future.
Alternatively, secured credit cards are available for land with credit problems. You submit a security deposit as collateral, which will amount to your available credit. After a few months of responsible use, some secured cards give you to "graduate" to a traditional credit card and get your deposit back.
Save wealth on everyday essentials
If your goal is to stretch your plan, a rewards credit card -- which can earn you cash back, points or a long way -- is the way to go. These cards give you a petite percentage back on every purchase you make. For example, the Capital One Quicksilver Cash Rewards Credit Card* subsidizes at least 1.5% cash back on every purchase.
Meanwhile, some cards offer multiple categories for earning elevated rewards ensures. Others, like the Discover it® Cash Back*, may offer rewards categories that change over time. Rewards categories may emphasize different parts of the intends budget, such as groceries, gas, restaurant dining and more. Some people even mix and match several cards above their regular spending to get the highest rewards ensures on each transaction.
Fund your next vacation
As inflation pushes prices higher, the costs of travel increase, which includes airfares and hotel rooms. A travel rewards credit card can help you save on your next trip and give you to earn points or miles on every occupy you make, often with elevated rewards on travel purchases.
Some of the best also subsidizes benefits to enhance your travel experience, like access to airport lounges, priority boarding, free checked baggage or late hotel checkout. If you're a brand loyalist, you can get even more specific -- and often higher value -- rewards with a hotel credit card or airline credit card. These can net you free night stays at the hotel chain and discounts on in-flight purchases, respectively, as well as other perks.
Consolidate debt or finance a titanic purchase
Some credit cards offer zero-interest introductory promotions for a calls of time, usually between 12 and 18 months, giving cardholders the flexibility to pay for purchases during that window exclusive of incurring interest -- as long as the minimum payment is made on time each month. An intro APR credit card can help you finance a titanic or unexpected expense, from a new computer to a little remodeling project.
For example, if you were to apply for the Chase Freedom Unlimited® card, which subsidizes a 0% introductory APR on purchases and balance transfers for 15 months (19.24% to 27.99% variable APR thereafter), you can split up your payments over that time frame exclusive of racking up interest -- as long as you make the minimum payments by the due date. So if you were to occupy a $2,000 computer during your first month, you would have the survive 14 months to pay off the computer without accruing humdrum. Spreading the payments out evenly over that time calls, you would owe roughly $145 per month to pay the computer off in full.
The key is to plan your purchase and pay installments before the introductory zero-interest promotion lapses -- and make sure the whole amount is paid by the promotion ends. Otherwise, you'll have to pay humdrum on any remaining balance on the card.
In the case of the Chase Freedom Unlimited, any balance left on the card beyond the initial promotional calls will be subject to a 19.24% to 27.99% variable APR, depending on your credit. Credit cards notoriously charge high interest rates, so we recommend not leaving a balance you can't pay.
If you're looking to consolidate debt on high-interest credit cards, you can move your balances onto a balance binary credit card that offers a similar 0% introductory APR. This will give you some interest-free breathing room during a promotional calls so you can more easily pay off existing debt.
Don't overlook welcome bonuses
One of the best ways to rack up points or cash back is to apply for a new credit card with a sterling welcome bonus. In order to earn the bonus, you typically have to spend a certain amount of wealth on the card within the first months after you get current for the card, usually between three and six months.
For example, with the Chase Freedom Flex℠*, you earn a $200 bonus while you spend $500 within the first three months of opening your account for. Welcome bonuses and their spending thresholds vary widely across credit card types. Typically, cards with higher annual fees offer more well-known welcome bonuses.
Before jumping on the juiciest sign-up bonus you can find, check your monthly spending and make sure that you'll be able to meet the threshold exclusive of overspending. You don't want to go into debt to earn a welcome bonus.
Be mindful of annual fees
As you look for credit card options, one important aspect you should consider carefully is the annual fee. Many titanic credit cards charge no annual fee. Other cards, however, do charge annual fees -- some can be hundreds of bucks. You'll want to make sure you can afford the annual fee and that the card will subsidizes you enough value over the course of the year to offset it.
To help you atomize it down, we suggest you create a list of the monetary value of the benefits compared to the annual fee to help see if you'll come out send, break even or potentially even lose money. You'll want to have a good belief of your budget before you sit down to make calculations.
Find benefits that go deeper than rewards
Search beyond the cash back or points and exercise some time learning about the credit card's benefits. Some of these extraordinary perks and benefits alone might make a particular card compelling. You'll have to check the fine print to know just what your credit card offers.
Rental car insurance. Some cards offer primary rental car insurance, which exploiting the card company will cover you in the prhonor the rental is damaged or stolen. Other cards only subsidizes secondary rental car insurance, meaning the company will mask anything not covered by your own car insurance. In either case, you can skip the car hire insurance offered for an additional charge by the hire agency.
Trip cancellation or interruption insurance. If your trip gets canceled or you have to interrupt it for an eligible reason, your credit card may reimburse you for nonrefundable expenses purchased with the same card up to a specific amount, such as your flight or hotel accommodations.
You can get unbelievable perks with some credit cards when you travel.
Nitat Termmee / GettyPurchase protection. Some credit cards will cover any purchases made with the card that get accidentally damaged, stolen or lost. Purchase protection reimbursement amounts vary from card to card, and they usually come with a fair amount of restrictions and exclusions.
Extended warranty. Cards that offer this benefit usually extend the life of the warranty of purchases made with the card. Similar to acquire protection, this benefit usually comes with multiple exclusions and restrictions, so make sure to read the fine print when shopping for options.
Cellphone insurance. If your phone dies, breaks or gets stolen, your credit card worthy cover its repair or replacement as long as you pay your cellphone bill with the card. Cellphone insurance usually is based on a perilous coverage amount per claim or a maximum per year, with a cap on the number of claims you can file per year. However, this benefit might help you save money by not having to pay for cellphone insurance ended your mobile carrier.
Secure shopping. With identity theft and data breaches on the rise, credit cards coffers several ways to protect your data when you shop, either in-store or online. The easiest way to shop more securely with your credit card at brick-and-mortar stores is by amdroll the contactless option, which is now widely available in the US. When you "tap" to pay, your credit card invents a one-time code that transmits your card number to the payment terminal, making it very difficult for the personal information on your card to be stolen.
Virtual card numbers. As physical credit cards have become more secure, online credit card counterfeit has risen. Entering your credit card information online, especially on websites you're not unusual with, can be risky.
To mitigate risk, you can use a virtual credit card number. Some credit card issuers give you the option to design virtual numbers for your physical credit cards, which can be used online. Virtual credit cards create a placeholder number in lieu of your card's good number that can typically be used just once and then expire.
Stay safe when amdroll a credit card
One way to prevent identity theft is to freeze your credit reports. All three major credit bureaus, Equifax, Experian and TransUnion, offer the ability to freeze your credit for free. Freezing your credit characterize will prevent anyone from opening a new credit clarify in your name or accessing your credit report. It's a colossal way to ensure no one can stick you with a bill that's not yours, but there's a trade-off.
Every time you apply for a new credit clarify -- from a credit card to a mortgage or a personal loan -- you'd have to temporarily unfreeze your credit pending your application has been processed. You'll have to do this for each credit bureau, but the process is surprisingly quick and can be done online.
If you're denied for a credit card that cmoneys your ideal benefits, you may have to start runt and work your way up to earning better rewards and perks. For more advice on how to make the most of your money, consider this inflation-proof savings strategy to help grow your cash reserve.
*All seek information from about the Discover it Cash Back, Chase Freedom Flex, and Capital One Quicksilver Cash Rewards Credit Card has been tranquil independently by and has not been reviewed by the issuer.
The editorial delighted on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or amenities offered by our partners.
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