How do I choose the best credit card?

I hate to break it to you, but there’s no such thing as the best credit card. That’s like saying one restaurant is the best in Canada. It depends on what food you like and how steep the menu prices are. The same thing goes for credit cards.


Start by looking for rewards that fit your lifestyle. Some people want free airline miles, while others want cashback. Then there are the interest rates. It’s usually true that the better the rewards, the higher the interest rates. If you carry a balance each month, you’ll end up paying much more in interest than you’ll earn in points.


Let’s take a closer look at how to choose the best credit card.


Interest Rates

The interest rate on a credit card might only be an essential factor if you usually carry a balance on it. The balance includes the amount outstanding on your credit card at the end of the month. The higher the interest rate on your credit card, the more interest you’ll pay. However, by getting a credit card with a lower interest rate, you’ll save money in the long run.


The interest rate on a credit card probably won’t matter as much when choosing a credit card if you always pay off your balance in full every month and never plan to take cash advances on your credit card.


There are credit cards out there with low interest rates. Some of these credit cards come with annual fees. Despite the annual fee, a low interest rate credit card may be the best choice for you if you regularly carry a balance.


Sometimes credit cards offer you low interest rates for a limited time. This allows you to transfer balances to the new credit card and benefit from the lower interest rate.


While you can save money with balance transfers, it’s essential to keep in mind that these low interest rates don’t usually last forever. Also, the interest rate may end if you go over your credit limit or are late on a payment.


Before you sign up for one of these credit cards, be sure to read the fine print to make sure you understand all the rules.



When signing up for a credit card, you may need to pay fees. Different credit cards come with varying fees, so you’ll want to read the fine print.


Some credit cards come with an annual fee. Usually, you’ll see the charge for the annual fee on your credit card statement once a year. Cards that charge an annual fee tend to offer better rewards or lower interest rates.


If you don’t like paying an annual fee, the good news is that there are cards that don’t charge it. Some credit cards without a yearly fee have similar rewards as those with an annual fee.

Before applying for a credit card with an annual fee, ask yourself whether you’ll earn enough rewards for the yearly fee to be worth it. Also, look for a card that offers similar rewards that doesn’t charge you an annual fee.


Besides an annual fee, other fees you may be required to pay include cash advance fees, foreign currency fees, over-the-limit fees, inactive account fees and insurance fees.

Benefits and Rewards

If you’re in the habit of regularly paying your bill on time and in full, then rewards programs may be at the top of your list. Credit card rewards come in two main varieties: rewards cards and cashback cards.


A rewards card lets you earn rewards on your everyday purchases. There are regular rewards credit cards where you may earn rewards that you can redeem at your favourite retailer. There are also travel rewards credit cards where you may earn rewards that you can use towards your next vacation.


A cashback card lets you earn cashback on purchases that you make. You may be able to use the cashback to cover the outstanding balance on your credit card or have the cash deposited into your bank account. There’s usually a minimum threshold you need to hit before the money goes into your account (i.e. $50 or $100). Sometimes the cash is deposited into your account monthly. Other times, it’s only once a year.


It’s relatively common for credit cards to offer rewards these days. When choosing a credit card, ask yourself how likely you are to use the bonuses. For example, if you barely travel at all, it probably doesn’t make sense to sign up for a travel rewards credit card. Likewise, if you hardly shop at a specific retailer, it probably doesn’t make sense to sign up for its rewards credit card.


Take the time to read the fine print before signing up. For example, your reward points may expire if you don’t redeem them within a specified period. If you barely plan to use the reward points, it may not be worth signing up.


Some credit cards come with a signup bonus. However, it may not be as useful as it first seems. You may be required to charge hundreds or thousands of dollars on your new credit card within a month or two to qualify. Make sure you’ll spend enough to get the signup bonus before applying for the credit card.


Secured credit card

If you’re new to credit cards or you’re looking to rebuild your credit, a secured credit card is one of the types of credit cards worth considering. Credit scores tend to carry less weight with a secured credit card. That’s because you’re required to make a deposit. If you fail to make your payments on time, the credit card issuer can keep your deposit, thus reducing its risk.


How Widely Accepted It Is

Another factor to consider is how widely accepted the credit card is. If you’re looking for the most commonly accepted credit cards, choose Mastercard or Visa. But if you’re looking to maximize your rewards, you might select American Express or Discover. Just keep in mind that a lot of retailers won’t accept these credit cards due to their higher interchange fees. Therefore, it’s a good idea to also sign up for Mastercard or Visa just in case the retailer you’re at doesn’t accept these cards.

Jeffrey: The first thing to know is this: there’s no such thing as the best credit card. That’s like saying one restaurant is the best in all of Canada. That depends on what kind of food you like and how steep the menu prices are. The same thing goes for credit cards. You can look for rewards that fit your lifestyle. For some folks that’s free airline miles. Others just want cash back. Then there are the interest rates. It’s usually true that the better the rewards, the higher the interest rates you’re charged, so if you don’t pay off your balance each month, you’ll end up paying much more interest than you’ll earn in points. If you call Consolidated Credit and speak with one of our trained credit counselors, they can help you figure out the most important part of this decision. How much credit card debt do you have right now and how soon can you pay it off? Until you do that, you’re wasting your time. A few more reward points won’t matter if you can’t pay off those huge balances. Once you do that, you can actually make money from your credit cards but first you need to stop giving credit card companies your money.

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