It’s easy to think that, for the most part, all credit cards are created equal. They all do more or less the same thing, and unless you’re in the market for a very specific card, why should it matter which one you get?

The answer lies in the very specific and unique ways in which people use their credit, as well as the distinct financial situation that every potential borrower is in. Depending on how you use the card and where you’re at in life, ostensibly similar cards could have drastically different effects on your financial health.

Rather than asking a friend for advice or applying for the first card you see on a commercial, take some time to understand the various factors that determine which card is most appropriate for you. Here’s a breakdown of the most important things to take into account.


One of the biggest factors with a card is the APR, or the amount of interest you’ll pay in a year. Every card has its own APR, which is typically a large range. The APR you qualify for depends on your credit score. The higher your score, the lower the APR.

Some cards also have an introductory APR of 0% which can last up to two years. Credit cards with 0% APR are perfect for someone looking to make a huge purchase who doesn’t want to pay interest fees. Many cards also have a balance transfer APR of 0%, so if you have credit card debt from another card, you could transfer it to a new balance transfer credit card and not pay interest on that new balance.

The APR only matters if you plan to keep a balance on the card, according to Eric Rosenberg of Personal Profitability.

“If you pay off your card in full every month, you don’t have to worry about the APR,” he said. “Just focus on the rewards compared to the annual fee. If you will get more valuable rewards than the cost every year, you found a great card for your needs.”

Most credit cards also have variable APR, which can change depending on the prime rate. When the Federal Reserve changes the country’s interest rates, the rate on your credit card will also change. This can be a huge range, so be sure to check it regularly.

Annual fees

Often the cards with the best rewards and biggest cash-back perks have the biggest annual fees. When you’re looking at a card, make sure to check its annual fee. Some of these are waived for the first year, but many aren’t.

Annual fees typically range from $50 to $100 depending on the card. A card with a $95 annual fee isn’t a deal breaker if it has other benefits, like free checked bags when you fly. Again, this decision is personal. Do the math to see if the benefits outweigh the costs. Many people sign up for a card that waives the annual fee for the first year and then cancel the card before the second year.

If you’ve been assessed an annual fee and want to cancel the card as a result, you can call the customer service line to see if they can refund you the fee and then close your account.

Other fees

A major reason why frequent travelers get credit cards is to take advantage of no foreign transaction fees, which are often 3% of the purchase price. Most travel cards don’t have these fees, saving you a bundle if you go abroad often.

Most cards also come with a balance transfer fee of 3-4%, but there are cards that waive this fee when you transfer your balance. Again, each card has their own policy on what they charge.

If you get a fee you disagree with or are surprised by, always call their customer service number.

Many credit card issuers will waive a fee if it’s the first time you got it. For example, if you thought you had set up autopay, but didn’t and ended up having a late fee on your account, call the credit card issuer, and see if they’ll make a one-time exception.


These days, not only do credit cards come with cash-back rewards and other incentives, they also often have sign-up bonuses. This is especially common with travel rewards credit cards, which offer points when you spend a certain amount within 90 days. You can redeem these points for plane tickets, hotel stays and often cash.

These bonuses vary. The cards that require excellent credit scores tend to have the best bonuses. Bonuses also change throughout the year, so do your research before signing up. A card that offers 50,000 points now might offer 75,000 later in the year. Once you earn the bonus, you often aren’t eligible to earn it again.

Before you sign up for all the travel cards you find, make sure that you can actually use the rewards they have. There’s no point in signing up for a Delta credit card when Delta doesn’t fly out of your local airport.


Almost every card available on the market comes with some sort of cash back reward or other feature. The most basic is a general 1% cash back reward, but some provide up to 5% on certain categories.

Most of the time these are trivial compared to sign-up bonuses and other perks. However, if you time it right, you can earn some serious bank with rewards credit cards. For example, if you have a card that offers 5% cash back on gas and you spend $250 on gas every month driving for work, you could earn $150 in rewards over the course of the year.

Before you fall for a card’s seductive offer, do some basic math to figure out if you’ll earn enough rewards to justify it.

Some of these cards come with annual fees. If you won’t earn enough points to pay for the annual fee, it’s probably not worth it.

Some cards also change rewards quarterly and require you to enroll in the rewards every few months. This can be confusing for people who just want to earn a few bucks every time they shop.

Most cash back credit cards also have a limit on how much you can earn per quarter or year. Again, calculate how much cash back you’ll likely earn. It’s hard for most people to reach this limit unless they have a large family or use the card to make purchases for their business.

Credit limit

Every card comes with its own credit limit, which partially depends on the card and partially on the user. The credit limit is how much money the credit card company is willing to give you access to at any one time.

The credit limit matters for two reasons. One, you plan to make a lot of big purchases at one time and need a large credit limit. Two, you want a big limit because you want to improve your credit utilization percentage on your credit report. If you qualify for a card with a smaller credit limit, you can often call and negotiate.

Some people actually prefer cards with a low limit so they won’t be tempted to spend more money than they can afford. Either way, it’s an important factor to look at when deciding on a credit card.

Customer service

Ideally, you wouldn’t have to take into account how reliable a company is when you call the help desk, but credit cards are tricky. Whether it’s because of a mistake on your credit report, a case of stolen identity or a malfunction with the chip reader, eventually you’ll have to contact the issuer about a problem.

Do some research on a company’s customer service reputation before applying for a card. It doesn’t have to be perfect, but you want to avoid borrowing from an issuer who’s going to disappear or give you the runaround when you need them most. Credit is a lifeline for many people, and it’s dangerous to get involved with a company who doesn’t respect the importance of that fact.

If you’re someone who has struggled to stay current on your credit card bills, you may want to inquire about how a company treats customers who fall behind on payments. Will you lose points or other benefits? Will you run into penalties and fees? Is there a program in place, such as a temporary interest reduction, for customers who get into hot water? When will a delinquent account be considered for deactivation? Hopefully you won’t run into these issues, but if you have a history of less-than-responsible credit usage, it’s information you should be aware of.

You should also be aware of how a company handles fraud and how that fits into your lifestyle. If you don’t often deviate from your typical purchases, you may want to go with a company who puts a hard stop on an account when they see divergent activity. If you’re someone who loves to travel and spend impulsively, you may want to find a balance between being protected from fraud but not constantly hassled about suspicious-looking purchases.

The bottom line

Finding a credit card doesn’t have to be a strenuous process, but it should be a considerate one. A credit card will stay on your credit report and could influence your future finances and how you spend money.

It’s especially important to be deliberate about your credit card use if you have a low credit score or a bad history of debt. In this case, make sure to find the right secured credit card for you. If you don’t find something perfect, be patient. It’s better to wait for the perfect card than sign up for the wrong one.