How to Find the Right Credit Card

Rebecca LakeUpdated April 21, 2023

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.

Credit cards can offer a convenient way to make purchases or cover expenses. Some even make spending more rewarding by offering cash back, points, or miles on the purchases you make. The average person has approximately 3 credit cards and 2.4 retail store cards, according to Experian. But when it comes to choosing a credit card, quality is more important than quantity. Different credit cards have different benefits and drawbacks, and what’s ideal for one person may not work as well for another. Knowing how to choose a credit card can help you find one that matches your spending style and needs. Beyond rewards, it's important to consider the card’s annual percentage rate (APR) and fees as well as other card benefits. Here are more of the specifics about how to find the best credit card for you.

Check Your Credit First

Reviewing your credit history is an important first step when you’re choosing a credit card. Banks and credit card companies can check your credit reports and credit scores to decide whether to approve you or not. If you are approved, your credit scores may influence the interest rates you'll pay for that credit card. You can get copies of your credit reports for free from each of the three credit bureaus (Equifax®, Experian®, and TransUnion®) through AnnualCreditReport.com. Once you have your credit reports, review them for:

Negative items, such as late payments, that could be lowering your score
Errors or inaccuracies
Potentially fraudulent activity

If you spot a credit reporting error, you can dispute it with the credit bureau that's reporting it. All three credit bureaus allow you to initiate disputes online. As for checking your credit score, AnnualCreditReport.com doesn't offer access to that. But you can check your FICO score for free with Experian. VantageScores, credit scores created by the three credit bureaus, are also offered for free through select partners. Credit card companies may use credit score ranges to assess who qualifies for individual cards. For example, here's how FICO credit score ranges work.

800-850: Exceptional credit
740-799: Very good credit
670-739: Good credit
580-669: Fair credit
300-579: Poor credit

Checking your credit scores against these ranges can help you narrow down your list of likely options for choosing a credit card.

Know What You Need

If you're wondering, what credit card is best for me? consider what you want the card to do for you. For example, are you interested in:

Building or rebuilding your credit?
Earning cash back on purchases?
Accumulating points or miles that you can use toward travel?
Making a large purchase at 0% interest?
Transferring a balance at 0% interest?

If you're focused on earning points, cash back, or miles, then it makes sense to hone in on the best rewards programs when deciding how to pick a credit card. But if you're trying to build or rebuild credit, then your options may be limited to secured credit cards. Opening a secured card requires a cash deposit that often doubles as your credit limit.Or you may simply want to keep your credit card interest charges to a minimum. This is where it's important to consider your payment habits. If you think you'll carry a balance from month to month, then a card with a low purchase APR can help you save money on interest. On the other hand, if you're confident you'll always pay your monthly bill in full, you might consider a card with a higher APR if it offers more perks and benefits. You might also look at a charge card. With a charge card, you pay no interest because you're required to pay the balance in full each month.

Dig Into Card Details

Once you've determined which type of card you need (i.e., rewards, secured, or low interest), the next step is to compare what's available in the category you’ve chosen. Again, you'll want to look for cards that correspond to your credit score range. From there, you can view the details and ask some key questions.

What to Consider for Rewards Credit Cards

If you're interested in rewards credit cards, you'll likely want to know:

What type of rewards the cards earn
Whether rewards are tiered or applied at a flat rate
What limits, if any, apply to the number of rewards you can earn each year
Whether an introductory rewards bonus is offered and what's required to qualify for it
How rewards can be redeemed and what rewards are worth at redemption
Whether rewards expire

If you're looking for a travel rewards card that earns points or miles, you'll also probably want to look at whether rewards can be transferred to travel partners. For example, some travel rewards cards allow you to transfer miles or points to select frequent flier or hotel loyalty programs. That can help you get more mileage from your rewards, so to speak.

What to Consider for Secured Credit Cards

With a secured credit card, you'll probably want to find out:

What minimum deposit is required
What the maximum security deposit allowed is
Whether your deposit is refundable
Which credit bureaus the card reports account activity to

Some secured credit cards offer rewards, but not all of them do. So if you find a card that allows you to earn cash back, miles, or points while building credit, you might consider that an added bonus.

What to Consider for Credit Cards That Can Help You Save on Interest

When you want to choose a credit card to save on interest, you might want to look at:

Introductory APR pricing, such as 0% introductory APR, for purchases and balance transfers
Regular variable APR for purchases and balance transfers

If you're planning to make a large purchase or transfer a sizable balance, then you might want a card that offers a longer introductory APR window. Just be sure you understand when the introductory period ends and what the new APR will be in case you're still carrying a balance at that point.

Weigh Costs and Benefits When Choosing a Credit Card

When deciding how to pick a credit card, and comparing credit card offers, it's important to understand how much value you really stand to gain.

Look at Both Rewards and APR

A card that offers a generous rewards program might look appealing, for example. But don’t forget to consider how much you might pay back in interest if you carry a balance. A high APR could eat away at the value of any rewards you earn.

Check Out How You Redeem Rewards

How you redeem rewards can also determine how much bang you’ll get for your buck. Redeeming cash back for a statement credit, for example, might offer more value than using rewards for gift cards or online shopping. And with travel cards, you're typically better off using miles or points for flights, hotels, and other travel expenses rather than other redemption options.

Consider Perks vs Annual Fees

Annual fees are something else to pay attention to. While some credit cards have no annual fee at all, others can have annual fees that add up to several hundred dollars a year. These cards may offer premium perks, such as airport lounge access, annual travel credits, or elite status in hotel loyalty programs that can help offset the fee. But consider how likely you are to use those kinds of benefits or any other benefits included with a higher annual fee card. A different card with a lower annual fee could make more sense, even if it means sacrificing a few perks.

The Takeaway

Figuring out how to pick a credit card shouldn't be hard. Choosing a credit card basically comes down to knowing:

What you need from a card
What you're willing to pay for a credit card
Which cards you're most likely to qualify for, based on your credit history

Ultimately, the credit card that's best for you is the one that offers the best combination of benefits and costs — and that you can get approved for.If you’re looking for a place to start, Lantern can help. With our online tool, you can quickly compare card rates and terms. That way you can get a range of options that are targeted to your wants and needs.

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About the Author

Rebecca Lake

Rebecca Lake is a freelance writer specializing in personal finance, investing and small business. Her work has appeared online at U.S. News and World Report, Forbes Advisor, CreditCards.com and Investopedia. Rebecca writes about a variety of topics for SoFi, including budgeting, saving money and student loans.

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