Credit cards are very convenient and secure compared to debit card. Besides allowing you to stretch funds when your finances are tight, credit cards protect you from frauds and unauthorized users. Most credit card issuers offer protection covers for unauthorized purchases, faulty purchases and charge-backs.
You can also use credit cards to build your score with each payment you make on time. What’s more, credit cards eliminate the need to carry cash when traveling. You can use credit cards to keep track of your personal or business expenses.
Some lenders offer reward programs. If you like to travel a lot, for instance, having a credit card that allows you to earn redeemable miles is quite attractive. Besides offering the essential services of a credit card, this option saves or earns you discount on an expenditure that you have more often. Nonetheless, credit cards come with varying interests, APRs, charges, and policies and there is no one-fit-for-all. As such, the best credit card is that which meets your current needs and situation.
Besides covering the best credit card providers, you will also get to understand why you need a credit card, how to qualify for one, as well as, some pros and cons of having a credit card.
Types of credit cards
These are standard credit cards issued on a revolving credit account, which means you can carry balances from one month to another. The balance difference must be paid in full at the end of each month to avoid interest. Cash-back credit cards allow you to earn some money back on your purchases. The issuer usually sets a limit and percentage you can earn back.
These work like cash-back cards, only that instead of earning cash, the issuer offers redeemable rewards points. Rewards credit cards are popular among retail stores and supermarkets. Rewards may vary from points to air travel mileage, hotel accommodation and free services.
Most credit cards are unsecured meaning the bank does not require cash deposit or collateral. Secured credit cards, on the other hand, work like debit cards. You need to deposit as much cash as you would want to spend on your credit card. These cards are ideal if you want to build history and credit score.
These credit cards allow you to transfer balance owed in one card to another card. Balance transfer credit cards are ideal f you are looking for a low-interest card to replace your current choice. They come with lengthy interest-free periods (up to 12 months) allowing you to manage your balances with less effort.
There are several other minor categories of credit cards in the market. These include retail credit cards that are issued by a store. You can only use them in the specific store. Gas credit cards are more like retail cards, albeit used in gas stations. Platinum and gold credit cards are offered to members with excellent credit score. Other variations include low-interest credit cards and corporate credit cards.
What you should consider when finding the best credit card?
i. Interest rates and card policies
Banks and lenders that offer credit cards operate within set market regulations. However, they still have varying policies regarding their products, services, features, charges, and offers. Credit card interest rates vary significantly from one lender to another. Comparing the best credit card rates is one way of finding the lowest prices in the market. It is also crucial to read through the policies and determine whether you have the discipline to follow through with the terms. Some cards are safer and more affordable than others.
ii. Look for a card that is suitable for your needs
As aforementioned, credit cards come in various types designed for specific requirements. If you have a bad credit score, it will be challenging to qualify for cards that require great to excellent ratings. If you own a distribution company, on the other hand, having a credit card that offers redeemable points for gas seems like a feasible option. It is, therefore, essential to understand your needs and personal circumstances. With this in mind, you can set out to find the best card for your unique needs.
iii. Improved customer features
Excellent credit cards offer something more than low rates and APRs or redeemable reward points and cashback. They provide new features that make shopping and managing your balances much easier. It could be an online calculator, pre-qualification, mobile app or notification service, a waiver on late fees or $0 charge on foreign transfers; the list is probably longer. If you seek these features, then you must compare your options and find a card that has them.
iv. Better customer service and convenience
Besides low rates and suitable terms, the best cards are associated with exceptional customer service. Some lenders allow you to finish the online application and mail the credit card. They also provide online customer support, account management, and resourceful tools. Others have better frameworks and reach, so it is much easier to use their credit cards. The best credit cards should be affordable and convenient to use.
Criteria used to rank the best credit cards
- Monthly interest rates and APRs
- Types of credit cards offered
- Minimum qualification requirements
- Terms, fees, and charges
- Availability of reward programs and bonuses
- Market availability (local branches)
Top 10 best credit cards
How to get the best credit card
I. Improve your score
If you want to qualify for the best credit cards, you need a high to excellent credit score, to begin with. There is the best option for every set of needs. However, some cards have low-interest rates, less-stringent policies, and massive bonuses. Most lenders that offer these cards also have higher qualifications. An excellent score reduces your risk and improves your creditworthiness among lenders. Increase your score by paying your loans and dues on time, and you will soon be qualifying for the best credit cards in the market.
II. Assess your needs
To get the best card, you must know your needs. A card that is great for one person may have nothing much for another. Once you know what you need and how you will use the card, it becomes much easier to find the right product. You should also read the terms and make sure you can meet all of them. If they are too strict, you can always find better options for your needs.
III. Compare various offers
The only way you can get the best credit card is through comparison. Best is by itself, a comparative that requires more than one product. The more credit cards you review, the more knowledge you will have about what they offer and if the terms suit your needs. In other words, you will be narrowing the search to best credit cards for your unique needs.
The several types of credit cards that exist in the market are enough reason to step back and review your options before making a decision. No single credit card is one-fit for all. Your circumstances and finances determine the range of choices you have. As a customer, you should review existing offers and find those that best align with your needs. Before applying for a credit card, make sure you understand how it works, how much you can borrow, interest rates, deadlines, and late fees and transaction processing, among other things. This way, you will be able to get a credit card that is easy to manage and does not get you into more debt than necessary.
What are the different types of credit cards?
There are several types of credit cards, mainly distinguished by features. The broad categories are standard and specialized credit cards. Standard cards are also known as general cards and contain the necessary information and low fees. Specialized cards may include added features and charges. Credit cards can also be low interest, cash back, and rewards among other sub-divisions.
How do Visa cards differ from MasterCard?
Visa and MasterCard are the most popular payment technology companies offering a convenient way to shop across various regions in the world. They link banks, governments, business, and the final customer. However, Visa and MasterCard are merely brands as they do not issue the credit cards. The actual differences between the two are quite subtle. Visa offers three memberships (base, signature and infinite) just like MasterCard (base, world and world elite). The main differences become apparent when considering perks in each membership level. Perks are simply covers for car rental insurance, fraud protection, purchase protection, travel and concierge services among others.
Do I qualify for a credit card?
Different lenders have different eligibility requirements, so it is essential to call your bank's support desk. You will generally need to meet the age requirement (18+ years) and have a valid email and physical address with a correct phone number as well as a bank account with the issuer. You may also be required to show proof of employment or income and must meet the minimum threshold set by your issuer.
How much longer until my credit card arrives?
Most issuers allow you to apply for a credit card online. The process is straightforward and takes under 5 minutes. You will then be required to submit your documents after which it may take up to two weeks before your card is sent to you.
How much do I pay for a credit card?
Credit cards are often offered for free if you take out the processing fees. Some issuers charge a one-time membership fee.
What rates are charged on my credit card?
Rates vary from one issuer to another. The most current rates charged on credit cards include APR (annual percentage rate), cash advance rate, international transfer rate, and balance transfer rate. Some issuers also charge a late repayment APR.
Can I get a credit card with no credit history?
Yes. Most issuers look for credit history before approving credit card applicants. It is difficult to qualify for a card if you do not have an account. However, there are various offers available for those with bad credit and no history. You can also consider secured credit cards.
What is a pre-approved credit card?
Getting pre-approved by an issuer means they have checked with the credit bureaus and determined that you are an eligible candidate for a credit card. However, you still need to apply for the card through the laid out process.