We have spent the last few years improving our credit. Inevitably, as your credit improves, you begin to receive credit card offers in the mail. If your credit is shaky, the offers that you may initially receive are probably not the best options. As time goes on, provided your credit continues on an upward course, the offers will improve.
Keeping that in mind, here are 5 signs that I look for in a good credit card:
- No annual fee—I do not like to pay for annual fees. Especially since I try not to make it a habit to use credit, I do not prefer the concept of having to pay for the privilege of having a credit card, regardless of if I use it or not. However, to be fair, there are some desirable cards that do charge annual fees, so you may want to base it off of the other factors listed below as well.
- Low interest rate—Unsecured credit cards can be costly enough to use without having exorbitant interest rates. Look for credit cards that have an interest rate between 6.99% and 9.99% preferably. Limited time offers of even lower or 0% are always good, too, as long as the standard interest rates are acceptable.
- Rewards—I am all about getting rewarded for purchases. Look for credit cards that offer rewards of some sort, whether cash back, discounts, or points. Determine what reward system matters most to you—for example, since I do not fly, frequent flyer miles are probably not the most useful reward for me personally.
- Decent credit limit—You may be able to get credit cards with a limit of $250 or $500 with promised raises later on, but if possible, it is better to look into higher limit credit cards. You want to avoid getting too many different credit cards with low limits—it is better to get 1 or 2 with more substantial credit limits.
- No late fee/penalty rates—Although this is a newer concept, there are credit cards that do not charge late fees if your payment arrives after the due date. Since accidents happen, this is a convenient feature. Likewise, some credit cards do not utilize penalty rates if you miss a payment altogether, which can prevent your interest rate from rising. Although these features should not be abused, they are nice to have for those occasional times when you are running behind on a payment.
There are some other aspects to consider when opening a new credit account, but the ones that I have mentioned above are the primary ones that I look at. Since your credit can take a hit if you open credit cards and later close them, it just makes financial sense to do a little research and limit the amount of credit cards that you obtain to exclusively quality options.
What do you look for in a good credit card? Do the credit cards that you have currently exhibit these positive traits? Comment below and share your credit card experience with us.
