Credit Card Issuers

In the early days of “Money Mondays,” debt was always a big topic of conversation. While most people are polar opposites on the idea of debt, for reasons not including political correctness, I was split down the middle. The point I always have and still do attempt to make is that debt can screw you over when used for the wrong reasons, but it can be amazing when used for the right reasons.

If you’re using debt to buy things that you don’t need, with money you don’t have, to impress people you don’t care about, that’s probably not the best reason. If you’re leveraging a loan to build up equity, such as a business or to invest in some other way, that’s something I would fully support in the right circumstance. Maybe you need to whip out the old credit card because you kid broke his tooth at hockey practice. That’s okay too. In any case, the way we use credit cards needs to be managed.

What Type Is Right For You?

While we can take out long-term loans for things like a mortgage, a car or maybe for school, those kinds of loans don’t make sense for daily expenses. That leaves us with credit cards. Out of the bazillions out there, there are things you definitely want to be aware of before you sign on the dotted line. Hopefully this will help you decide which is the best credit card for you.

What Do You Need Credit For?

Credit cards can be separated into 3 categories: personal, business, and student. The three work in basically the same way.

The difference comes in the interest rates and fringe benefits of each card. Personal cards are your basic option. Depending on your spending habits, you may want to choose one that offers perks in an area of interest. For example, if you coached your son’s little league team, you might want a card that gave you incentives on the purchase of sport equipment. Business cards typically include travel insurance, preferred rental car rates, and higher spending limits to support the growth of a business. And student cards ideally will have low (if any) annual fees, and they don’t require you to have any sort of credit history.

The “Nice To Have”s

There’s usually more than one card that would fulfill your “need to have” criteria. Trying to navigate through them all can be a tough thing to do in finding the best credit cards for you. While there isn’t enough time to go through all the nuances of every single card, there are some basic things you can think about to narrow down the choices.

The main variables that differentiate the cards include:

  • the interest rate(s)
  • the balance transfer (how much do you want to transfer to your chequing)
  • the credit limit
  • the effect on your credit score (some build you score more than others)
  • the availability of a guaranteed source of credit
  • the size and nature of the reward program (dividends, miles, points, etc.)
  • the added perks like travel insurance

There’s Help

If your head is about to explode and brain matter is starting to ooze from your ears, there are a number of resources you can use to help guide you through the decision making process. I like http://www.lowestrates.ca. You can do a side-by-side comparison of all the major cards on the market. While I would never suggest anyone get a card “just because,” knowing what’s out there can help you decide whether or not you could use a credit card and, if so, which one best suits your needs.