Which Credit Card Should I Get?

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Are you in the market for a new credit card? The television commercials and online advertising from all of the big card issuers may be tugging you in a variety of directions. It can be both confusing and overwhelming.

Don’t fret.

In this article, I’m going to walk you through the process of picking the right credit card for your wallet.

With the help of money expert Clark Howard, I have created a decision tree that should give you confidence that your next credit card move is the right one.


Clark’s Credit Card Decision Tree

Clark often gets asked: “Which credit card should I get?”

And inevitably, his response is some variation of: “It depends. Tell me more about your financial life.”

That’s because giving advice on the “right” credit card can require a very personalized response.

Are you new to credit and you’re looking for a card to get things started? A credit card whiz who is looking for a 5th rewards card for your wallet? Or maybe you’re someone in between who just wants to make sure you’re getting the most out of your monthly spending.

The suggestion for each of those consumers would likely be a different credit card.

Because of that, I sat down with Clark to pick his brain to develop a tool to help you find your individual answer to the question: “Which credit card should I get?”

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What came out of that discussion is this decision tree.

You’ll want to answer all the questions and follow your own path. Kind of like a “choose your own adventure” book from when you were a kid — only this adult version could save you big bucks!

Oh, and when you’re done, you’ll want to make sure the card you’re considering falls in line with Clark’s rules on how many credit cards you should have.


Question 1: What Is Your Credit Score?

First thing’s first: Clark wants to know what type of credit score you’re working with.

Credit card applications are subject to credit checks, so there’s not going to be any hiding your credit history. In fact, many of the “top” rewards credit cards may require a score that is higher than what you have.

A lower credit score may mean you need to find a card geared toward improving your credit history so that eventually you’ll be eligible for the card with the shiny rewards you desire. Some quick tips for improving your score via credit card usage include: making purchases each billing period, keeping your credit utilization rate low and paying your bill both in full and on time each month.

Clark says a 680 credit score is the approximate line in the sand that card issuers may use to determine eligibility for their popular credit cards.

If your credit score is below 680 …Clark wants you to visit your local credit union to ask about a credit builder program. Alternatively, he says you could apply for the Petal Card or consider getting a secured credit card.
If your credit score is above 680 …Move on to Question 2.
If you don’t know your credit score …Read this article on how you can get your credit score for free and then return to Question 1.

Question 2: Do You Routinely Pay Your Credit Card Balances in Full Each Month?

Clark says that many consumers like to think they’ll pay their credit card bill in full each month but notes that card issuers aren’t going broke waiting on that to happen. Even users who enter into a card relationship with the intention of paying the bill in full sometimes find themselves carrying a balance.

Time to do some honest self-reflection.

Are you one of the people who tells Clark that you want to pay your bill in full each month without doing so, or are you actually doing it?

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Clark says that consumers who regularly carry balances on credit cards should forget about rewards and instead focus on the interest rate (APR) on their cards.

Exorbitant interest charges will cost you more than any rewards a card may offer. And the cards that offer the best rewards often have some of the worst APRs, so it’s important to be self-aware on this.

If you answer “Yes” …Move on to Question 3.
If you answer “No” …Clark wants you to visit your local credit union to apply for the best low, fixed-rate card you can find. Many credit unions have fixed APRs in the 8-10% range.

Question 3: Do You Spend a Significant Amount of Time and Money on Travel Each Year?

Most people love the idea of a vacation. And the credit card companies know this.

Travel rewards cards are some of the most popular credit cards on the market because they reward travel with … more travel. And that allows frequent travelers to earn things like free flights and hotel nights.

But there also are credit cards that reward non-travel spending with travel rewards. Those might work for you, too.

Clark says there are two ways to think about whether you’re a good candidate for a travel card:

  1. Are you looking for travel as a reward? You could be a candidate for a card that gives you travel rewards for all types of spending.
  2. Are you looking for rewards for your travel? You could benefit from either a brand-specific airline or hotel rewards card, or you could be a candidate for a premium card that gives you travel-related perks.

If you fall into that latter category, you’ll need to consider whether you spend enough on travel to justify applying for one of these cards as they usually carry an annual fee.

Clark says that you can travel as little as three times per year and see some positive return from basic travel cards that do things like upgrade your airline boarding status, but you’ll likely need to travel at least 10 times per year to see the benefit of a travel card that offers more extensive rewards at the cost of a significant annual fee.

If you answer “Yes” to traveling often …Move on to Question 4a.
If you answer “No” to traveling often …Move on to Question 4b.

Question 4a: How Much Do You Plan To Charge on Your Credit Card Each Month?

Now that we’ve established that you’re a traveler who runs up a significant amount of spending in this category each year, we need to get a little more detailed on your spending to figure out which type of travel credit card might be right for you.

Clark says that you typically need to charge roughly $10,000 per month to justify paying for one of the travel cards with an annual fee north of $500. Unless you’re a frequent business traveler or a wealthy person, you likely spend less than that with your credit card.

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If you charge less than $500 per month … Clark says you may want to consider a low-fee airline card that can earn you free checked bags and seat upgrades. This is especially beneficial if you’re brand-loyal to one airline. Otherwise, consider a no-annual-fee travel rewards card with fixed rewards. Discover it Miles, for example, offers 1.5 miles for every dollar spent and has a cash-back match bonus for the first year of card membership.
If you charge between $500 and $10,000 per month …Clark says you should find a card that allows you to “make your annual fee back” with rewards for a modest amount of travel each year. He says the Chase Sapphire Preferred card is a great choice for many travelers.
If you charge $10,000 or more per month …Clark says you should consider cashing in on rewards like free annual hotel nights and airport lounge access offered by high-annual-fee credit cards. The Platinum Card from American Express is a popular choice in this tier of credit card.

Question 4b: How Much Do You Plan To Charge on Your Card Each Month?

Now that we’ve ruled out travel rewards credit cards for you, it’s time to focus on making the most out of your spending with Clark’s preferred rewards system: cold, hard cash.

For most consumers, Clark believes that cash back rewards cards are the best path to assuring you’re getting a solid return on your spending each month.

His favorite cash back cards offer up to 2% back on every purchase you make without annual fees or category limitations. Clark carries a couple of these types of cards in his wallet.

If you charge less than $500 per month …Clark says you should apply for a no-annual-fee cash back card that gives you steady 2% rewards without categorical restrictions. He often recommends Citi Double Cash for this type of spending.
If you charge more than $500 per month … Move on to Question 5.

Question 5: Do You Already Have a 2% Cash Back Card?

If you’ve made it this far into the exercise, congrats! It’s now time to examine what’s already in your wallet to ensure our recommendation for your next card matches your spending.

As mentioned previously, Clark is a huge proponent of having at least one 2% cash back card in your wallet. He carries both the Citi Double Cash and the Navy Federal cashRewards card (which pays him 2% back through a promotional deal that’s no longer available) in his wallet.

He wants rewards seekers to have one of these cards in their wallets as a “safety net” to ensure that you’re getting at least 2% back on every purchase you make. So if you don’t have one, he wants you to start there.

If you do have one, we’ll move on to finding a way to beat that 2% in some high-volume spending areas in your life.

If you answer “Yes” … Move on to Question 6.
If you answer “No” … Clark says you should apply for a no-annual-fee cash back card that gives you steady 2% rewards without category spending restrictions. He often recommends Citi Double Cash for this type of spending.

Question 6: Check Your Budget: How Do You Spend the Most Money Each Month?

If you’re already carrying a card that gives you 2% back on all purchases, the next addition to your wallet should be a card that can beat that rate of return on as much of your spending as possible.

Start by taking a quick glance at your spending habits. How you’ve spent money in the recent past is probably one of the best indicators of how you’ll spend it in the near future.

If you’re able to identify a large monthly spend in a specific category, there’s a good chance that you can find a credit card that will offer you enhanced rewards for that type of spending. Examples of these categories would be things like dining, groceries or gasoline purchases. Rewards for spending in those categories can be as high as 5-6% back with some credit cards.

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Likewise, if you’re able to identify that you’re spending a large portion of your money with one particular business, you might find that there is a credit card geared toward rewarding spending at that establishment. Examples of businesses that offer up to 5% back on purchases with their co-branded credit cards include Target and Amazon.

If you find that your highest monthly spend is with a particular business …Clark says you’re a candidate to consider applying for a card that rewards spending with that particular retailer. Amazon, Target, Walmart, Costco and Sam’s Club all have rewards credit cards worth considering.
If you find that your highest monthly spend is in a particular spending category …Clark says you should consider applying for a card that offers the best rewards return on this category. The Blue Cash Preferred from American Express gives 6% back on supermarket purchases, Capital One’s Savor card offers 4% back on dining and the Sam’s Club Mastercard gives 5% back on gas.

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