I was out for dinner with some friends recently, and because they know I blog about money, they commented on my choice of credit card when it was time to pay the bill.
“Do you like your credit card?”
I do, actually. I love it.
I raved about my Tangerine Cash-Back credit card, because I hands-down adore it, and it’s a great fit for me (The Boyfriend has positive things to say about it too). I went over how I can choose my own reward categories, and how I’ve earned over $200 in rewards this year, and how it has no annual fee.
But looking back, you know what I should have said instead?
“Sure, I like it, but you might hate it. I have no idea.”
Like, literally no idea. Because here are the real questions you need to ask – or more likely, answer – before you can decide if a credit card is the right one for you.
- How much do you spend every year?
- How much do you spend in typical categories, like groceries, gas, pharmacy, travel and entertainment?
- How much do you make every year? (Because some cards have strict income minimums.)
- What kind of rewards do you enjoy and prefer getting?
- Do you carry a balance on your card sometimes?
I love my friends, and we’re pretty open about money because I’m the most awkward dinner guest ever, but that is a whole ton of very personal details I just don’t know about anyone other than The Boyfriend. If you want to get into the nitty gritty, great, let’s rock, but even still, I can only give you solid credit card advice if you spend roughly the same amount as I do, on the same things, in the same places.
Even if you’re Kate Saves, who I’m convinced is my blog twin, that’s a pretty long shot (and even then, I don’t know Kate’s life! Maybe she’s way more frugal than I am when it comes to groceries? No idea.)
When it comes to my credit cards…
- I’m all about no-annual-fee cards, because I straight-up do not spend enough to offset the annual fee when it comes to earning rewards.
- I like cash back cards, because I’m not locked into a rewards program I might only sometimes use.
- I’ve had a few travel rewards cards, and they’re great too if you can swing the minimum spend to score their sign-up bonuses.
- I personally don’t care about the interest rate on the card, because I never carry a balance
But when it comes to recommending a card for you ?
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I have no idea. I don’t know your life.
Luckily, there are ways you can find out what card is going to be the best fit for your life, and sadly, none of them are sitting across from you at the dinner table. That’s because they’re all patiently waiting on your laptop screen whenever you need them.
I’m talking about comparison websites.
You guys know I’m a big fan of comparing car insurance rates, but if you haven’t used a comparison site before, you can use them to compare just about anything, and that very much includes credit cards.
Here are links to some of the best comparison sites you need to check out if you find yourself asking friends if they like their credit card – because if I’m that friend, I’ve very much learned my lesson and will be directing you to these sites anyways.
- Lowest Rates breaks down each type of credit card in a perfect amount of detail, giving you the nitty gritty on different types of perks that might be important to you, including balance transfers, low interest rate card and business cards.
- Ratehub compares each card based on the information you give them about your average monthly spending, and can even get into the details about your spending categories, like grocery and gas spending, to recommend the right card.
- RateSupermarket lets you compare cards side by side to see how they compare on set factors.
Most of these sites will also, spoiler alert, have promotions they run with the different card providers at different times.
If you have your eye on a particular card, it might be worth checking to see if there’s an incentive at any of the comparison websites that could score you some extra cash back or a gift card – but only if you’ve already decided that’s the right card for you, based on your spending habits and needs.
So as with basically every piece of financial knowledge I’ve learned, when it comes to choosing the right credit card, it really boils down to a combination of…
- “It depends.”
- “Do your own research.”
- “Obviously, take free money if it’s appropriate.”
I need to make that into some kind of artsy poster. In the meantime, here’s a pinnable image for ya.
What else would you add, if you were advising someone on how to choose the right credit card? Do you think personal recommendations matter when it comes to choosing a card – or a rewards program, for that matter?
I think we can all agree that free money should be taken when appropriate. 😀
I’d recommend using a web tool like what you linked to at ratehub that analyzes your and spits out suggestions. You just have to be careful because these are all affiliate links who have a goal of selling you a new account and there are some times you can find a better targeted offer by not using an affiliate link, though I suppose it’s pretty rare.
Totally – it’s all about understanding the industry enough that you can get the best deal, in the right place, on a thing that’s right for you!
I usually just go for the zero percent cards and rotate the bank to increase my chances of being approved. I took the plunge and opened a card that has a $95 fee and a crazy high-interest rate for the miles. I’m cancelling before the fee hits and paying in full. Zero percent is way less stress, but I want to give it a try. For the sake of the blog, right? As TJ said, I think it’s important to remember that most of these sites have a dog in the fight somehow (through affiliates, referrals, etc.). Comparing comparison sites. It’s like the Matrix or Inception. 😉
I can’t wait to read about your credit card adventures! I swear, if I was in the States I’d be such a credit card churner. The MILES PENNY. SO MANY MILES.
It sounds like you’re not too concerned about dinging your score by opening and closing cards to get the 0% interest rate. Wouldn’t you be better off just not carrying a balance to avoid the interest, cutting out the hassle and score dinging of rotating cards, especially since your credit score is also used outside of the borrowing world? Just wondering.
I love mine! Unfotunately NZ doesn’t have fee free cards and rewards aren’t that great, but better than nothing. If I have to spend money to live, then I may as well get something for it.
While I’m all too familiar with the rewards-not-being-great thing, I am SO surprised that you don’t have fee free credit cards! Seriously?! Is there just a culture of using debit for every transaction? Or like… everyone just accepts that you have to pay an annual fee to have a credit card? This is seriously post-worthy. I feel like a no-fee card could come in and just destroy everyone there – I’m SO curious why that hasn’t happened!
Another great comparison website is http://www.walletsavvy.com . And if you are Canadian, our government offers free comparison services online at http://www.fcac-acfc.gc.ca/Eng/forConsumers/topics/Pages/home-accueil.aspx . They compare credit cards, banks, etc and they don’t have a pony in the race with regards to trying to sell you cards.
Thank you so much Matt! Super valuable resources, I hadn’t heard of either of them and I’m glad you have!
I am pretty sure Kate Saves is also my blog twin.
RIGHT?!
Also thought you said Kate Spade when I first read this and was wondering how you knew that I’m a luxurious monster and used my Kate Spade bag for the first time today.
It was glorious, thank you for asking.
I *wish* I was Kate Spade.
(also I loved the pic of the bag you posted. Gorgggg)
I’ve been trying to comment on this foreeeever but my stupid old near-death computer for some reason kept freezing on this comment submission only? So now I’m commenting from work (shhh). First, thank you for the hilarious shout out. It’s extra hilarious because I have been hardcore researching this exact credit card because it feels like it’s made for my life. Our life? Same thing. Except not, because you and Alyssa are who I want to be when I grow up, since you’re both all investment-fancy and pro at those adult-y finance things. One day!
But for real this is such a great post, and I agree 100% (of course). Credit cards are such a personal tool for each individual person – that’s why I like the Ratehub comparison, since it takes into account a person’s own habits. I read card reviews like it’s my job, but at the end of the day, no one particular person/blogger/bank/etc can tell me what credit card is best for me. (Except for maybe you, it seems, haha)
AHAHAHAHAHAHAHA oh my goodness you think I’m investment-fancy that is the sweetest thing ever you are the kindest human. I am anything but: literally, roboadvisors saved me from the pain of having to admit I knew nothing about buying my own ETFs. I mean uh… were the right choice for me at the time (still are, I <3 technology.) Plus, in terms of adulting, girl you have a house.
And if the calculators and research are pointing you towards the Tangerine card anyways, I really do love it and have had a great experience with them. They even have a tool that tells you which categories would have earned you more money every month, and you can change them! How great is that?!