ADVICE FOR CHOOSING THE RIGHT CREDIT CARD - American Resource FinderAmerican Resource Finder


When you’re considering applying for a new credit card, all of the choices can often seem overwhelming. So we’ll breakdown the important components of what makes up a credit card program.

Annual Fees

Many credit cards charge annual fees for their usage.  While these types of credit cards often offer better services and rewards, you should always pay attention to this as this fee can be waived for new customers.

Annual Percentage Rate (APR)

A credit card’s interest rate is the price you pay for borrowing money. For credit cards, the interest rates are typically stated as a yearly rate. This is called the annual percentage rate (APR). On most cards, you can avoid paying interest on purchases if you pay your balance in full each month by the due date.

Low Interest Cards

Many cards offer low interest rates as their main selling point.  These are often reserved for those people with good to great credit, however.  These cards can be a huge asset if you carry balances month over month.  Don’t underestimate how quickly high interest rates can add up.

Late Penalties

Almost all credit cards charge a penalty for late payments.  If you’ve found yourself repeatedly making late payments, you should pay closer attention to this information. 

Account Creation Bonus

First time customers are often offered an incentive for applying for an getting a new credit card.  These incentives can come in the form of Cash checks, cash back, and credits to you account for future spending.  If you find yourself interested in a credit card this is offering a sign up incentive, pay close attention to the fine print.  These cards often require you to spend a certain amount on your new card with a given time.  If you fail to meet these requirements, you won’t get your incentive.

Balance Transfer

If you carry credit card debt over month to month, the interest rates and fees can really add up quickly. Balance transfer cards offer the opportunity for those with credit card debt to transfer their balances over to a new card at an introductory rate, often at 0%, for up to 12 months. This can be extremely helpful as it can allow people to carry balances at an interest free rate. Of important note however, is that these interest rates are only temporary and will go to their normal levels after a certain amount of time. So make sure you remind yourself of that deadline so that you do all you can to reduce the debt as much as possible before then.

Cards For Bad Credit

For those of us who have bad credit there are still plenty of credit card options available. One of the downsides is they often carry higher interest rates and may require to be secured. Secured credit cards require a refundable security deposit to be put down as collateral.  While this isn’t ideal, it’s often a good, and necessary first step for people to build or improve their credit.

Rewards Programs

This is often the category that gets the most attention.  Beyond APR, a credit card’s rewards program is what’s most often promoted in its advertising messaging.  Because there are so many different types of rewards programs, we’ll highlight the most popular in order for you to have a better understanding of which rewards might be the best fit for your lifestyle and needs.

Cash Back
This type of reward allows you to earn cash for making purchases.  It’s generally a simple calculation of for every dollar spent, you receive a percentage in cash back. Most cash back cards earn users around 1 percent of total purchases (excluding interest and finance charges). Some cards offer a higher cash back percentage with increased usage; others offer a higher cash back percentage at select merchants or for particular types of purchases. (like travel, gas, or groceries)

Points cards are similar to cash back cards in that cardholders accumulate points based on how much the card is used over time. These points can then be put toward rewards offered by the credit card company. General reward cards offer cardholders a variety of items to cash points in for: gift cards, electronics, hotel stays, plane tickets, jewelry, pet supplies and more.

This reward type if excellent for those people who travel frequently. They are generally specific to hotels and travel and are often co-branded with airlines or hotels. An example use case would be using this credit card to earn points for your purchases, in addition to bonus points for dollars spent on stays at the respective hotel chain. You can redeem your points for free nights and upgrades at the hotel chain your card is co-branded with. This could be applied to airlines as well.