How to Choose the Right Credit Card
It's one of life's little mysteries: Why do we spend days — or even weeks — picking out just the right coffee table or sofa but generally spend only a few minutes choosing a credit card?
It's unfortunate, because the right card could potentially save you hundreds of dollars each year. Fortunately, choosing a credit card that's right for you doesn't have to be complicated. By considering a few simple things, it can be easier than shopping for new furniture. Here's what you need to know:
Reap the right rewards
Reward cards are the most popular form of plastic — and they come with an astonishing array of choices. The most common are travel-related rewards and cash-back cards, though many banks offer credit cards that provide rewards in the form of gift cards for restaurants, retail stores, or online shopping.
Quiz: According to NerdWallet,1 the average American household carries credit card debt of:
Check your answer in the footnotes below.
If you're a frequent traveler, the best way to optimize your spending is with a credit card that rewards you with travel-related rewards (like free hotels or flights) and offers you extra points for travel-related purchases, such as rental cars, vacation packages, airfare, and hotel stays.
For those who don't travel frequently or prefer not to hassle with gift cards or travel reward websites, a cash-back card is an ideal solution. Card choices range from a flat cash-back rate for all spending to ones that offer a higher reward rate for one or more specific spending categories like gas, groceries, or dining out.
Pay attention to perks
For consumers who carry a lot of debt, the best “reward" is a low APR. In fact, for consumers who carry a balance, it's vital to pay close attention to a credit card's annual percentage rate; often reward cards come with higher interest charges that could eat into — or even completely cancel out — whatever rewards you're receiving. And while low- or no-interest introductory rates are a boon if you need to pay down debt, be sure the card is still right for you once the introductory period is over.
Also, though not as glamorous as rewards, many credit cards offer an array of additional benefits that may prove to be just as valuable, such as rental car insurance or lost luggage protection. These perks can prove to be quite useful, depending on your lifestyle.
Figure out which fees and bonuses are worthwhile
While some credit cards have an annual fee, don't let a yearly charge scare you off. Most cards charge $100 or less per year, so if you've found a reward card that best matches your lifestyle and spending habits — especially if you charge a lot — you'll likely come out ahead.
On the other hand, don't get seduced by those seemingly enticing sign-up bonuses. While introductory offers are worth noting, the real value of any credit card lies in the consistent rewards that accrue over time. Just be sure to read the fine print and note if your rewards ever expire.
Don't get stuck on any one card
Though loyalty is admirable, it's never a good idea to get stuck on any one particular credit card. At the very least, you should have a back-up credit card in case your primary card is ever lost, misplaced, or suspended for a security issue.
Also, choosing the right mix of credit cards isn't a one-and-done decision; your credit card mix should evolve as you do. For example, a cash-back card with high-rewards categories for groceries and gas may not be as useful when the kids go off to college or if you retire and start to travel frequently.
Bank on it
Few of us really consider just what a major impact the right credit cards can have on our bottom line. A credit card is a powerful tool that should work for you, not against you, which is why it's a good idea to discuss your potential credit card selection with a trusted representative from your local bank. As someone familiar with your financial situation, they can help you make a fully informed decision about which credit cards will serve you best based on your overall financial situation, spending habits, and goals.
If you're in the market for a new credit card,2 stop by or call your local branch to learn more about the different credit card options Synovus has to offer. Or click below to read more about credit card options and apply online.
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This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.
- Quiz Answer: B: $15,654 — 2017 American Household Credit Card Debt Study Back
- All credit cards are subject to credit approval. Back
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