How to Pick the Right Credit Card

With so many credit cards on the market today, it can be difficult to decide which one is right for you. While some offer lower interest fees others have better rewards perks. Plus, credit card issuers typically offer enticing sign-up bonuses that can make it even harder to choose between cards. Luckily, we’re here to steer you straight. Below, we’ve put together a list of tips on how to pick the right credit card.

Check your credit score

The first step to picking the right credit card is to check your credit score. You can check your credit score for free in Canada, using online services like Equifax, TransUnion, Experian, and Borrowell. Knowing your score will help you determine what credit cards you are eligible for. The higher your credit score, the better the odds of being approved for a credit card.

Choose your preferred type of credit card

There are many types of credit cards, from travel and cash back credit cards to rewards and secured credit cards. Once you know your credit score, the next step is choosing the type of credit card that’s right for you. The best type of credit card is the one that meets your unique needs. For example, if you don’t travel very often, then a travel credit card might not make the most sense. In this case, you might opt for a cash back or retail credit card that allows you to earn rewards on purchases. Alternatively, if you’re looking to build or rebuild your credit, a student or secured credit card could be a great option. Meanwhile, low-interest, balance transfer cards, or 0% APR credit cards may be a great option for people looking to minimize how much they pay in interest.

Ask yourself the right questions

To help you decide between credit cards, we recommend asking yourself the following questions:

Will this credit card help me build my credit? (Please note: many secured credit cards won’t build your credit history because they don’t report payments to credit bureaus)
How much does it cost to have the credit card? (e.g. what are the annual fees and interest rates?)
Can I upgrade to a credit card with better benefits in the future?
What is the credit card issuer’s balance transfer policy?
How long is the 0% APR period (if applicable)?
Does the card offer rewards? If so, how quickly will I earn rewards?
Does the credit card offer a sign-up bonus?
Do I spend my money in ways or at places that align with this credit card? (e.g. if you’re considering a retail credit card, make sure you shop at that store enough to make the card worthwhile)

Apply for the credit card that offers the best value

The questions above should help you narrow down your options. However, you might still need to choose between two or three similar cards. To do this, you have to examine the differences between the two and carefully consider each. There are several factors that might set one credit card apart from the rest. For example, if you’ve narrowed your choices to a few student or secured credit cards, look for one where the credit limit automatically increases after you’ve made a few consecutive on-time payments. If you’re debating between two low-interest credit cards, research if one offers a debt payoff planner that can be helpful if you’re in debt. If you’re leaning towards a rewards or travel credit card but aren’t sure which to choose, we recommend choosing the one with lower spending requirements and no expiration dates on rewards.