How do I pick the right credit card for me?
<div class="user-question">Hi Frich! How does one actually pick the right credit card? I'm overwhelmed and confused with all the options.</div>
Hi! I'm so glad you're writing in this question. Picking the right credit card is a decision that can continuously reward you as you go about your usual spending patterns. So how do you pick the right one? Let's dive in!
Don't have time for the whole thing? Here's a quick summary🔥
<div class="frich-tip">1️⃣ Best premium credit cards for high credit scores</div>
<div class="frich-tip">2️⃣ Best secured credit cards for low credit scores</div>
<div class="frich-tip">3️⃣ Best student credit cards</div>
<div class="frich-tip">4️⃣ Best credit cards for when you don't have a credit score</div>
1️⃣ Review your current spending patterns
✅ Go to your current bank account - whether it's a debit card or a credit card - and download the last few statements. Make sure they're representative of your typical spending patterns.
✅ Take your transactions and organize them according to spending categories. For example - travel, dining out, groceries etc.
<div class="frich-tip">Frich tip: If you don't mind uploading your data to ChatGPT, upload your bank statements and ask it to categorize the transactions for you. Two things to keep in mind - block out any sensitive data (such as your address) and proofread the work! AI makes mistakes too.</div>
2️⃣ Look up your most recent credit score
Which credit card you qualify for will be mostly decided by your credit score.
Remember that applying for a new credit card, negatively affects your credit score, so you want to make sure that once you apply, you're confident you will be approved for the card.
<div class="frich-tip">Frich tip: You're entitled to a free credit report from each bureau every 12 months via AnnualCreditReport.com. Check to see what your exact credit score is today!</div>
✅ If you’re building credit or starting out, look at student or secured cards since they often don't have any credit score requirements. Here are our current favorite cards.
✅ If your credit score is okay or good, focus on card perks tailored to your spending. Here are our favorites!
✅ Have irregular income? Favor cards with low interest rates to reduce penalties if you can’t pay in full every month. Here's our current favorites.
3️⃣ Evaluate fees vs benefits
Unless you're choosing a premium card, you should always go for a credit card that has $0 annual fee. However, if you're ready for a premium card or looking for certain perks, make sure you do the math before to see whether the benefits are worth more than the annual membership fee.
<div class="frich-tip">Frich tip: If you asked ChatGPT to categorize your transactions, you can also ask if a certain card is worth it based on your spending patterns. Make sure that the value of the perks you will actually use is more than the annual price of the card.</div>
4️⃣ Compare sign-up bonuses
Credit card companies are always offering sign-up bonuses. So if you're already planning to sign up for a card, make sure you get paid to do so! Here's a benchmark of a good sign-up bonus for each tier of credit cards. If the current offer isn't even close to it, wait a bit! Credit card companies tend to offer higher sign-up bonuses a few times a year.
✅ No annual fee / beginner cards: $50-200
✅ Mid-tier cards: 20,000-60,000 points
✅ Premium cards: 60,000-150,000 points
<div class="frich-tip">Frich tip: Don't sign up for a card just because of the bonus & remember to check the fine print! There's (almost) always a minimum spend required to receive the sign-up bonus.</div>
5️⃣ Read the fine print
Based on your needs, you might want to optimize for a credit card that has more flexibility.
✅ If you know you have a lot of expenses coming up (e.g. you're moving and will need to buy new furniture), consider optimizing for a card that has the longest 0% APR offer to give yourself more time to pay back.
✅ If you have an inconsistent income, look for a credit card with the lowest APR to minimize any penalties.
Found this valuable? Here are some more deep dives from the Frich team 🤝
✅ How to avoid credit card debt??
✅ How to get out of secured CCs???
✅ Master your credit card points
Hope that helped take some of the stress out of credit card hunting! Make sure to do your research thoroughly & let us know which card you end up picking.
Best,
Kristina
