Why it Pays to Consider all of your Options when Shopping for a New Credit Card
We all remember those days when credit flowed freely. Our mailboxes were crammed full of credit card offers and we essentially had our pick of credit cards.
Shopping for a credit card in today’s economy, however, is decidedly different. We are no longer inundated with credit card offers, and we may not even be eligible for some of the credit cards that, just a few years ago, we could have easily obtained.
Order your Credit Report
Before you begin the process of shopping for a new credit card you must understand where you stand as a customer. To do this, you should order a copy of your credit report from the three, major credit reporting agencies.
If you want further information about your credit score, you can go to myfico.com to get your FICO score. This website also gives you access to financial tools which allow you to see how some of your financial decisions can affect your FICO score, either for the better or the worse.
It is important to understand that most banks will consider you a good credit risk if your credit score is 750 and above, so understanding where you stand is a great, first step when shopping for a credit card.
Consider your Future Plans
Before you apply for a new credit card, consider whether you will make any large purchases in the upcoming months, as a new credit card can reduce your FICO score, which may make it harder to snag a home loan or a car loan (or get a better rate).
You may want to pay off and cut up your old credit card once you have received a new credit card, but reconsider closing the account, especially if you plan to make any large purchases in the upcoming months, as closed accounts lower your available credit, which in turn lowers your FICO score.
Decide on a Card that’s Right for you
If you carry a balance, your first priority should be to find a credit card with a low interest rate. If you travel often, consider a travel rewards credit card, and so on. Make sure your credit card meets your needs and that the terms and conditions of the card make sense for the type of spender you are.
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