Suppose you’re thinking about opening a new credit card or reconsidering the cards currently in your wallet. In that case, you’ll benefit from conducting a little research to find the card that best fits your financial situation and spending habits. Ask your friends or co-workers about their favorite card brand, and you are likely to hear about their affinity or distrust for Visa, MasterCard, Discover, or American Express. Let’s cut through that noise and get you thinking about your own needs and what to carry in your wallet.
Card Acceptance – Since not every card brand is accepted everywhere you shop, carrying two card brands is an easy workaround. Some merchants opt out of the American Express network due to higher fees on their end. International travelers may find countries where the American Express card is not readily accepted.
Customer Service – Do you frequently need to interact with a service representative? The issuer supports Visa and MasterCard accounts, so your level of service is likely to vary more. While Discover and Amex are the card issuers, they control the experience, although that does not guarantee great service.
Eligibility – Visa and Mastercard tend to have more relaxed qualification standards than say Amex.
Lost or Misplaced Card – American Express’s unique card numbers are a popular benefit for couples/families. A lost card by one person does not jeopardize the card numbers of others.
Even if a popular card offers rewards or miles, it still might not be the best fit for you. Let’s take a look at the reasons why.
A Rewards Card
Some credit card companies offer cards with rewards, either points, miles, or cashback options. These things are attractive incentives to customers. However, you’ll want to be wary and do some digging. These cards often come with higher interest rates than non-reward cards. This might not be beneficial if you regularly carry a balance on the account. Your interest expense can outweigh the benefits, points, or miles, negating any benefit. Don’t forget about the annual fees some of these cards levy.
Luxury Cards
If you’re in the market for a luxury card that offers amazing benefits, such as an automatic upgrade to any available first-class seats on a flight, you might want to consider whether these cards can come with high fees. These cards frequently come with a hefty price tag in the hundreds, maybe even the thousands, just for the privilege of the card. For some cardholders, these fees are a worthwhile investment for the perks and upgrades. But if you don’t agree, take the time to review the fees and benefits for this card. It’s up to you to decide if the benefits outweigh the fees.
Best Value or Best Status?
You’ll have to decide what brings more value to the credit card(s) you’re considering. Do you want the best value for your money with lower fees, or do you want the best status with regards to travel or rewards? Do you have an affinity for a certain card brand, such as Visa, MasterCard, or Amex?
What reward draws you in the most? Is it airline miles? Cashback? A low-interest rate? Consider your credit score and how that might affect applying for your “best” card. Consider also if your card still fits your lifestyle changes. Those who travel less frequently might enjoy more cashback than hotel status or airline upgrades. Flexibility to use miles on a variety of carriers might outweigh a single carrier-branded card.
Resources for Credit Cards
If you’re not sure what next steps you should take, here are some links to resources that might help you make your decisions regarding the cards you have or the cards you’d like to have.
First, you might find this Awards vs. Cash Calculator handy for a good deal.
Next, there are times when you might not be eligible for a new card. Find out why in this article.
Finally, if you want to know what card might be a good fit for you, visit bankrate.com to be matched with a card that matches your lifestyle.
Get Informed Before Applying
It’s always best to inform yourself before making important decisions. Open the credit card that works best for your needs and consider whether your benefits outweigh your fees.
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