A credit card can be a blessing….and it can also be a curse. While on one hand having a credit card can give you built-in safety measures for your purchases and a slew of cash-back/points benefits, it can also mean fees, interest charges and spiraling consumer debt if you’re not careful.

When choosing a credit card, take your time, pick the one that’s right for your financial situation and proceed with caution.

While you’re making your choice, here are some things to take into consideration:

Your Intended Use

Credit Card IconHow and for what do you plan to use this card? Will you pay it off every single month? Are you comfortable carrying a balance? You should also decide if the card be used daily or periodically.

  • Look for the lowest possible balance if you’ll be carrying any sort of balance on the card. If you’re credit is in-tact and your balance will be temporary, look for a card with a 0% introductory rate and make sure to pay it off before the rate expires.
  • If you’ll diligently be paying off the card in full each month, you don’t need to concern yourself too much with interest rates. Perhaps you’re looking now for a card with zero annual fees.
  • For those who decide the card will be used for every possible purchase, make sure to find one that offers the best incentives. Whether it’s cash-back or travel points, you’ll want to choose the card that offers the most bang for your buck.
  • If you’re banking on this card for emergencies only, the most basic, low fee card will do the trick. This isn’t the time to apply for a pricey platinum card!

Consider the Limit

A credit limit is just as it sounds—it’s the amount of money you can charge to a credit card before you are hit with additional (exorbitant) fees. Make sure you’re signing up for a card that has a credit limit that will fit your intended use. If you’re not careful, over the limit fees and credit score declines will be in your future!

Currency Dollar IconFees Are Us?

Speaking of fees, they are seemingly endless when it comes to credit cards. Despite recent credit reforms, sneaky fees still lurk. Make sure to pay attention to how much these fees will cost you because no matter the best intentions, sometimes mistakes do happen. Take a look at fees for late payments, over limit, pay-by-phone, transaction and balance transfer fees.

A general rule of thumb could be the lower the fees, the better the card.

Shop Around

There are many places to find and compare credit cards. Online resources like Totally Money take the guess work out of collecting information and offer you an easy way to compare cards side by side. 

The Fine Print

Remember that no matter how enticing the deal may sound on the surface (20% off my entire purchase today?!), there are plenty of factors that you need to take into consideration before signing on the dotted line.

By spending the time up front to make an informed decision, you could literally be saving yourself thousands in the future.