How to Find the Best Credit Card for You

consumer watch: tips for choosing a credit card

By David Bakke, contributor for Money Crashers Personal Finance 

In this day and age, there are literally thousands of credit cards at your disposal. However, the question remains: Which one is the most beneficial for you? Everyone's situation is different, so finding the best one can be difficult without some guidance.

Here is a breakdown of six various categories you may fall into, and the best credit card for each situation.

1. Those With High Balances Who Are Looking to Reduce Debt

If you have high credit card balances and would like to reduce your debt, your best bet is to focus on obtaining a credit card with an attractive balance transfer option. Consider the Capital One Platinum Prestige card, one of the best low APR credit cards available. Currently, it offers a 0% APR on balance transfers for 15 months. It is important to only transfer the dollar amount of balances that you know you can pay off during this time period. Never make a late payment, always pay at least the minimum, and never use the card for any other purchases once the transfer takes place. And be sure to pay off the entire amount before the introductory rate ends.

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2. Those Who Spend a Lot on Gas and Groceries

Of course, we all spend a lot on gas and groceries. But for larger households and people who have long commutes, the Blue Cash Preferred card by American Express provides excellent cash-back benefits. You get 6% cash back on gas, 3% cash back on groceries and department stores, and 1% everywhere else. There is a $75 annual fee, but this is well worth it if you purchase a lot in these categories.

3. Those With Excellent Credit

If your credit is stellar, consider one of the best cash back credit cards. An excellent option is the American Express Premier Rewards Gold Card. You receive 25,000 rewards points after spending $2,000 in the first three months, and an additional 15,000 points if you spend $30,000 in the first year. You also get triple points on airfare, and double points on gas and groceries. This card comes with a $175 annual fee, but it's waived for the first year.

4. Those With General Spending Across a Broad Range of Categories

In this instance, opt for the Chase Freedom or Discover More. Both cards offer 5% cash back on a rotating set of categories throughout the year, including movies, gas stations, restaurants, department stores, and more. Just make sure you opt in every quarter and time your purchases to get the most savings.

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5. Students

Presently, one of the best credit cards for college students on the market is the Citi Dividend Platinum Select for College Students. This card requires no annual fee, and you don't need a cosigner. You get 5% cash back at supermarkets, drug stores, gas stations, and on utilities payments for the first six months (1% after that) and 2% cash back on a rotating set of categories throughout the year including restaurants, department stores, hotels, and more.

6. Poor Credit Holders

If you have a poor credit score, I suggest acquiring a secured credit card, such as the Capital One Secured MasterCard, which can help you rebuild your credit. This card is funded with your own money, and you can get a credit line of up to $3,000 depending on how much you can afford.

Final Thoughts Obtaining the best credit card all comes down to your own personal situation. Identify what's most important to you, and choose the card that offers the most advantages. Credit cards can wreak havoc on your personal finances if you are careless, but they can also provide a wide variety of savings benefits if you use them properly. Which credit card do you carry and how has it worked out for you?

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David Bakke lives in Atlanta with his young son, Nicholas. In addition to striving to set a good financial example at home, David covers financial topics including credit cards, debt management, frugality, retirement, and investing strategies on Money Crashers Personal Finance.

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