In today’s digital world, it’s easier than ever to use up a credit card for almost all your essential expenses. You can use these small credit cards to make purchases online or at retail stores and pay them off monthly, usually with interest.

Fortunately, you have many different types of credit cards to choose from, each with its own benefits. All you ought to do is find the one that works best for your personal financial needs and lifestyle.

But with the sheer multitude of options out there, how do you know which card is right for you? While most people think about cash back rewards when thinking about which credit card to get next, there are other factors that come into play. Some cards offer special perks like travel accident insurance or extended warranties on purchases made with the card.

Let’s see the top tips for you to choose the best credit card for your usage.

Know the basics of credit cards

Credit cards are an easy way to borrow cash and make purchases on credit. In exchange for this, you’ll pay a set amount of money each month until your balance is paid off. If you’re a novice in the market of credit cards or want to make sure you understand the basics of credit cards, here are a few things to know:

- Credit card interest - When you don’t pay off your entire balance each month, you will accrue interest on your outstanding balance. This interest is added to your original balance, so your goal should be to pay off your monthly bill/balance in full every month to avoid paying unnecessary interest fees.

- Credit card rewards - Some credit cards give you rewards, like cash back or airline miles, each time you use the card. These rewards can help you offset the cost of using the card. If a card offers a low introductory APR (Annual Percentage Rate), like 0% for the first 12 months, you may be able to use it to take advantage of a short-term, interest-free loan to cover a more significant purchase.

Check for fees and interest rates

While rewards, benefits, and interest rates may be the main factor for some people, for others, only the bottom line matters. If you’re making an effort to stay on track with your budget, you’ll want to make sure you don’t choose a card that will make your finances go wrong. Credit card fees and interest rates can vary greatly depending on the card you choose.

When comparing cards, start by looking at the annual fee for each card. This is the yearly cost of having the card and is usually in the form of a percentage of your total balance. Next, check the interest rate on each card. Depending on your credit history, you might qualify for a card with a low APR.

Look at the card’s rewards and perks

Rewards and perks are other things to consider when choosing a credit card. Some cards offer generous rewards for simply making purchases with the card, like one point for every UAE Dirham spent. Others offer special perks like travel accident insurance, free baggage check, or an extended warranty on purchases made with the card.

Do some research to find out which cards offer the rewards and perks you prefer. If you have multiple cards, you may even be able to combine rewards from different cards to make the most of your credit card spending.

Find out how easy it is to get approved

When applying for new credit cards, you may be turned down or offered a specific card based on your credit history. If you happen to be a part of the latter kind, don’t get discouraged. Instead, make it a point to improve your credit score, so you’re more likely to be approved for a better card in the future.

Make sure you check your credit score before applying for a new card. It’s easier to make adjustments to your credit if you know you need to improve your score before applying.

Compare other available cards

If you’re still unable to decide on a card, try comparing different cards available to you. You can do this online very quickly. These sites provide information on your credit score, as well as offers and incentives from various credit card companies. Once you’ve narrowed down your options, it’s time to make a final decision on which card to choose.

Bonus Tip: How you can use credit cards judiciously

When used correctly, credit cards can be highly beneficial. They can help you build credit, which is very important if you’re applying for a mortgage or car loan in the near future. They can also allow you to make purchases now and pay them off over time, so you don’t have to pay all at once.

However, you should use credit cards judiciously to avoid getting into financial trouble. Here are a few tips to help you use credit cards wisely:

- Only apply for one card at a time- If you have a less than stellar credit history, you may be offered a card with a low APR or even a fee-free card. If you apply for several cards concurrently, it can hurt your credit score.

- Pay off your card each month- This is the most important rule of all. If you don’t pay off your card each month, you’ll be charged interest on the full amount of every purchase you’ve made with that card. This can add up quickly and cost you a ton of money.

- Don’t use your card for cash advances- Credit cards let you withdraw cash from your account, but it comes at a steep price. You’ll get hit with a high fee and interest charges, so you’re better off using a low-interest, short-term loan instead.

Summing up

Choosing the best credit card is all about finding the card that best fits your needs. If you know what you’re looking for, you can find a card that offers rewards, a low APR, or any other benefits you’re interested in. Before you apply for a new credit card, make sure you understand the basics of credit cards, as well as how they work. This will facilitate you to make better decisions when it comes time to apply.