08/15/2014 01:51 pm ET Updated Oct 15, 2014

4 Tips for Finding the Perfect Credit Card

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By Mike Goldstein, Content Writer at Credit Karma

The marketplace for credit cards is more complicated than ever. Points programs, cash back plans and variable interest rates all have consumers drowning in the fine print, trying to make some sense of what they're applying for. And, if anything, it's only getting more complex.

Recent data points to the fact that sign-up bonuses are on the rise while the value of the rewards received over the life of many cards is going down. Credit card companies, in other words, are looping customers in with attractive initial rewards while decreasing cash back rates and requiring more points to be earned for redeemable rewards.

The result, for consumers, is a tricky situation. Add in the fact that one third of loyalty rewards aren't even redeemed each year, and it becomes clear that many consumers are not getting the value they deserve out of their credit cards.

If you don't want to get stuck with a credit card that you can't take full advantage of, dig into the selection process and make an informed decision. With so many choices out there, and such complexity in the fine print, how do you make sure you're making the right decision when choosing between credit cards? Read on for four key tips.

1. Think Over the Long Term

This one plays right into those aforementioned studies. When you're choosing a new card, make sure you consider not only the short-term, but also the long-term financial effects. If a card offers attractive sign-up bonuses, make sure to also look at how your rewards may change over time.

In particular, keep in mind that introductory interest rates may not last forever. It's not unheard of for cardholders to move their debts to new balance transfer credit cards because of a low introductory interest rate and end up stuck paying more after that interest rate expires. In addition to looking at how your interest rates may change over time, plan how you will use that card to make sure it will continue suiting your needs. Finally, be aware that the value of the rewards points you receive can change at the behest of your lender. The rewards you get now might not always be so valuable.

The long term is important not only to your financial health, but also to your credit health. Your average age of credit history is important to your credit score, so choosing cards that you'll be comfortable keeping open for a while can be a beneficial decision.

2. Compare Your Options

Through junk mail, internet advertisements and emails from their banks, most consumers are deluged with credit card offers on a daily basis. It wouldn't be surprising if you feel a bit overwhelmed with the number of different directions you can take your credit card search. Because there are so many options out there, and because each offer is designed to entice you to apply, it's vital to take your time and do your own independent research before making a decision.

Take the time to search based on your needs and compare the terms of at least a few different cards. Find a credit card that has attractive terms and which you think you'll be approved for. Credit Karma can match you with offers based on your credit profile and historical approval data, so it's a good place to start.

3. Read Reviews

As wonderful as independent research is, sometimes the best way to learn is from the experiences of others. Looking through the feedback of those who have already gone through the application process is an easy way to discover details about a particular card that you might've missed otherwise, like a loophole that might limit your rewards or a future adjustment in interest rates.

Those who have already applied also may be able to offer vital insight into the application process, and can shed some light on how pleasant a particular financial institution is to deal with. Getting a credit card can result in an extended relationship with that new lender, so it's best to arrive prepared.

4. Figure Out What You Really Need

This tip can double as some pretty decent life advice. Don't get carried away on a whim, and make sure you've decided what specifically it is that you need and want out of a credit card.

Depending on your spending habits, the type of credit card you really need can vary wildly. Rewards cards, for instance, can be rendered pretty much useless if you have a habit of leaving a balance from month to month. These cards tend to have higher interest rates in turn for better benefits, so incurring interest charges on the regular could wipe out whatever rewards you've gained.

If you need to carry balances from month to month, low interest rates could be your priority. If you have a low credit score and need to build it, maybe it's a secured card you need. If you have a healthy score and love to travel, a travel rewards card could be a smart choice. The point is that the credit card market is complex and chock full of great options, so know what you want and be prepared to refine your search based on those needs.

Bottom Line

Deciding what credit card to apply for should take time and research, so don't get carried away without doing your homework. Carefully consider your options and then make the best choice for you.


This content is for entertainment and information purposes only. The opinions expressed in this piece are those of the authors themselves, and not necessarily Credit Karma, its affiliates, or its business partners. Efforts have been made to present information that is up to date and accurate at the time of its initial publication. However, neither the author nor Credit Karma make any guarantees about the accuracy or completeness of the information provided.

About the Author: is a Content Writer at Credit Karma. Since joining the team in June 2013, he's been delivering the financial know-how on the daily.

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