Credit cards provide you with many advantages. They can help you build your credit so you can buy a car, get an apartment or a business start-up loan in the future. Because the credit card companies provide you with a monthly summary of your purchases, credit cards can help you manage your personal budget. In addition, different credit cards offer a variety of perks, including cash back and airline points, that can benefit you now.
No or Low Fees
If you qualify for a high-limit card, you have excellent credit. Many cards offer no annual fees. In selecting the best high limit credit card for your needs, pick a card with no annual fee. In addition, some cards do not charge certain fees that can add up. They don't charge over limit fees or foreign transaction fees. The latter one could come in handy if you study abroad or travel to Mexico on spring break. In addition, no fee credit cards will waive the late fee and won't raise your interest rate on your first late payment.
If you travel often, then you can pick a card that gives you rewards or points that you can use to get free travel perks including hotel rooms, airline tickets and car rentals. Some cards allow you to transfer miles to airlines without any blackout -- no fly -- dates. The miles or perks you earn from these cards are unlimited and do not expire. Some cards offer as much as 1.25 miles per every dollar you spend.
If you don't travel much, the best card for you may be one that provides you with cash back for your purchases. Some cards provide a straight 1 to 1.5 percent cash-back percentage on every dollar you spend. These cards also typically provide a one-time bonus ranging from $50 for the first $500 you spend to 5 percent of the first $1,500 you spend during some initial period, for example, the first three or six months. Most cash-back rewards do not expire.
Interest Rate and Transfers
If you intend to run a balance, factor in the interest rate when you're choosing a credit card. Credit card interest rates can be as low as 7 percent for candidates with great credit, although they typically range from 10 to 15 percent range for those with a shorter credit history. In addition, many credit cards offer balance transfers at 0 percent for six or 12 months. If you have a high-interest credit card or loan, you can transfer that balance to your new card. You may even be able to pay off the transferred loan balance before your regular interest rate kicks in.
Tiffany C. Wright has been writing since 2007. She is a business owner, interim CEO and author of "Solving the Capital Equation: Financing Solutions for Small Businesses." Wright has helped companies obtain more than $31 million in financing. She holds a master's degree in finance and entrepreneurial management from the Wharton School of the University of Pennsylvania.