Additional credit card research
How do you know what card to apply for? If you’re looking for any easy way to compare the best credit cards, check out our search tool below:
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Credit card pro tips
Among the common questions we try to answer are “What are the benefits of a credit card” and “What are points on a credit card?” Both the former and the latter can vary based on which card you’re talking about, so we’ve done our best to cover these subjects in broader detail.
Although the best credit cards offer a slew of obvious benefits including cash back and travel rewards, other perks aren’t always advertised prominently. Examples include:
- Zero liability for fraudulent purchases
- $0 foreign transaction fees
- Rental car coverage
- Free FICO® Score
- Extended warranties
- Roadside assistance
You might have to dig deeper to find them, but these features can truly come in handy. If used correctly, they can even help you save money, travel safer, and protect yourself from undue risk.
Understanding points and other rewards
Rewards come in a variety of flavors — points, miles, cash back, etc. — and it always pays to understand how these rewards work from card to card. To do that, you’ll need to hit the fine print.
Take this for example: You might see that a particular airline card offers the first checked bag free on every flight. It’s a great perk, but without scrutinizing the fine print, you might not learn that cardholders also get checked baggage insurance, car rental loss and damage insurance, discounts on eligible in-flight purchases, or other goodies. If you aren’t aware of all the features, you probably won’t get the maximum benefit from even the best credit card.
Always treat your card like cash
Sometimes emergencies happen. We get it. But unless the situation is dire, you should never use available credit to justify making a purchase. Try your best to restrict card use to purchases that you can afford to pay off in the same month. Otherwise, you could seriously jeopardize your long-term financial health.
When should I pay off my credit card bill?
Always strive to pay your credit card balance in full by your statement due date. There’s no better way to build a solid credit history and healthy credit score.
Credit is a powerful tool when seasoned with self control, but left unbridled, it can wreak havoc on your financial future. Case in point: The average American household has . If your card has an 18% APR and you’re only making the minimum payment (usually around 3% of the total balance) you’ll rack up over $2,000 in interest charges every month and continue to lose ground.
Paying your credit card off in full also helps to keep your credit utilization ratio low. Your credit utilization ratio is the percentage of your available credit that you have used. Credit bureaus use this metric to gauge how responsible you are.
When it comes to credit utilization ratio, low is best. Credit cards can negatively affect your credit utilization if you continuously run large balances.
We recommend keeping your credit utilization for each credit card below 30%. You can track your credit utilization on your credit card with some simple math — (balance ÷ credit limit = ratio).
Most card issuers report your balance and activity to the credit bureaus once per month. The problem is that the report might be issued before your monthly statement is due. So even if you pay your card in full each month, it will appear to credit bureaus that your utilization ratio is higher than it actually is.
If you’re committed to keeping your credit utilization ratio low, call your credit card help line, ask when your credit activity is reported, and make sure to pay your balance before that date. (Paying off charges immediately isn’t a bad idea either.)
What credit card should I get?
It all comes down to your everyday spending habits. Ideally, you want a card that rewards those spending habits rather than one that forces you to adjust how you purchase things. These cards we’ve covered are some of the best on the market and a great place to start.
Further reading: Money360’s guide to choosing a budget.
Can you ask for a lower rate on your credit card?
Yes, you can. In fact, a of 952 American cardholders found that 69% of people who asked their credit card issuer for a lower interest rate were successful. What’s equally as interesting is that only 25% of people ever take the time to try.
Your interest rate isn’t the only thing you can haggle over. Late payments, annual fees, and credit limits are fair game too. Of all the survey participants who asked:
- 87% got a late payment fee waiver
- 69% got a lower interest rate
- 89% got a higher credit limit
- 82% had their annual fee waived or reduced
Here’s how to lower your interest rate
Negotiating better rates doesn’t have to be scary. Follow these three primary tactics to improve your chance of success:
- Leverage your loyalty. It’s simple: Companies are more willing to work with longtime customers. Your best play is with the company you’ve been doing business with the longest.
- Do your homework. Find a better deal and use it to your advantage. Credit card companies need your business. Remember: Over half of the people in the survey scored a better rate simply because they called and asked.
- Be persistent. You probably shouldn’t call day after day, but there’s nothing wrong with a little persistence. If at first you’re told “no,” ask to speak to a manager.