How to Choose a Credit Card That’s Right for You
10 Min Read | Last updated: July 3, 2025
This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
Choosing the right credit card isn’t always easy. Our guide can help you learn how to pick a credit card that matches your budget and credit profile.
At-A-Glance
- Whether you’re interested in earning cash back, lowering balances, or building credit, align your financial goals and spending habits with the credit cards you apply for.
- Review your credit report before sending applications to help avoid hard inquiries and denials that could compromise your scores.
- Always read the terms and conditions of the cards you apply for to avoid expensive surprises, and make sure your credit cards work for you, not the other way around.
Credit cards are a common part of life today, and knowing how to choose the right card can be an important financial decision. But how do you decide which card is best for you? You can use the guide below to learn how to choose a credit card and why you might want to select a new one better suited to your needs.
What Are the Different Types of Credit Cards?
Knowing what cards exist could be helpful before diving into how to choose the right card. There are several different types of credit cards, but we can group them into four general categories to streamline your shopping experience:
- Rewards Cards
These cards often come with perks like cash back or points on qualifying purchases or miles for travel and hotel expenses, and different cards can offer higher rewards for specific purchases. A credit card that offers discounts on restaurants might make little sense if you only occasionally eat out. Additionally, the highest quality rewards cards can often be competitive, and many require strong credit.1 - Balance Transfer Cards
Also known as 0% introductory Annual Percentage Rate (APR) cards, balance transfer cards could help you pay down credit card debt sooner by moving one high-interest balance to a new, temporarily interest-free card. Balance transfer cards may also require strong credit.2 - Secured Cards
You may not need strong credit for a secured card since you have to deposit money onto the card before opening or using it, significantly decreasing risks for lenders. - Student Cards
Building credit requires starting somewhere, whether at college or while completing a vocational program, and student cards with lower limits and higher rates could cater to that profile.
The credit cards you qualify for often depend on your scores and your credit report standing. While cards exist for a wide range of credit scores, remember that lower scores could mean fewer perks and higher interest rates.3
6 Steps to Choose a Credit Card That’s Right for You
Here are some steps for choosing a new credit card:
- Know why you want a new card and what it should do for you.
People’s reasons for choosing a credit card vary. Some want more spending flexibility, while others want to maximize their rewards-earning potential. If you’re puzzling over how to pick a credit card, evaluate your primary goals. If day-to-day spending is your aim, choosing a card with a 0% interest introductory rate and rewards that are relevant to you could make sense.
If you don’t plan to carry a balance, a card offering large rewards might work in your favor. On the other hand, choosing a credit card that offers restaurant discounts makes little sense if you only occasionally eat out. To reap the advantages of a rewards program, it’s good to review your monthly expenditures to see where your money goes, especially if your lifestyle has changed in recent years.
- Look over your credit reports and scores to see where you stand.
Time is a finite resource, and you may not want to waste it applying for credit cards that require scores or financial profiles you don’t currently have. Tracking your credit report progress might also help you strategically time your applications for new credit cards that increase your available credit and lower your credit utilization, a key factor contributing to credit scores.4 If your credit score has improved since the last time you applied for a card, you may be able to qualify for a new one with more tailored benefits.
Did you know?
Staying up to date on credit reports and your evolving credit scores can be fast and free with American Express® MyCredit Guide..
- Select a credit card that corresponds to your profile while offering the perks you want.
While the cards that match your profile may not always offer high cash back value on every purchase, they may still offer lower interest rates or fewer penalty fees. Choosing a lower APR credit card may be more important than one with generous rewards. Try to be flexible and realistic by prioritizing your most pressing financial needs.
- Read the card’s terms and conditions so you’re not caught off guard by fees.
Some cards, like balance transfer cards, have varying 0% introductory APR periods. Interest rates kick in when those periods end, and surprise interest charges could negatively impact your credit score if you have high balances. Understanding your terms and conditions could help you prepare.
- Create a realistic budget for borrowing costs, especially if you carry balances.
Budgeting could help avoid charging purchases you can’t pay off by your issuer’s due date. If you’re charging up your card without any plan to pay off the debt, you could compromise your credit scores and borrowing power.
- Only apply when necessary, and avoid sending too many applications at once.
Credit card issuers almost always run hard credit checks when you apply for a new card, and those inquiries typically lower your score temporarily.5 While card issuers may see the occasional application-based inquiry as routine, several applications within a short time could raise red flags.
How to Choose a Rewards Credit Card
Just like with any other type of card, asking questions can help you find the answers to choosing the right rewards for your interests.
- Are you a foodie?
If you’re spending considerable cash at restaurants every month, you may want to consider dining rewards cards. - What’s your commute like?
If you have a daily commute, you know that gas can add up. A rewards card that offers cash back at gas stations could be beneficial. - Are you a big flyer?
Plane tickets can be expensive, and checked bags might even require budgeting. Travel cards could help you save on travel, foreign transaction fees, luggage, and more.
How Do I Choose a Credit Card in a Changing Economic Landscape?
Interest rates can be in constant flux. During some seasons, paying off credit card debt could become even more costly if interest rates rise to combat inflation. If rates continually rise, the minimum monthly payment due on credit cards could also increase. On the other hand, rates could go down, making borrowing more economical.
Responding responsibly to interest rate variations might better prepare you to choose a credit card that complements your budget and the national economic situation at any given time.
- If you see news that interest rates could increase and you carry a balance on your credit card, it might be smart to find cards that streamline debt payoff. With that in mind, it may be worth watching for any temporary low-interest promotions you can opt into to help you whittle down debt while accruing less interest.
- Credit card companies could change their offers occasionally, so you’ll want to evaluate whether your current credit card offers rewards in a relevant category. Another reason to consider a switch is to take advantage of a potentially valuable introductory offer.
- If you choose to open a new card, remember that closing an older credit card could negatively impact your credit score.6
Frequently Asked Questions
Experts often consider any APR good if it falls under the national average.
Leaving accounts inactive for too long could result in closure by the lender.7 A potentially easy, low-cost way to keep a credit card active is to link it to a small annual or monthly subscription with autopay so it stays in use and gets paid off automatically.
The Takeaway
Knowing how to choose the right credit card can help you to choose a credit card that’s a great fit for your needs. Look for one that offers features and benefits that you’re after; one that aligns with your big-picture goals. Be sure to consider factors like the card’s interest rate and terms and conditions as well.
1,5 “How to pick the right credit card for you,” Bankrate
2 “What happens if you’re denied for a balance transfer card or can’t transfer all your debt,” CNBC
3 “What credit score do you need for a credit card?,” Bankrate
4 “What’s a good APR for a credit card?,” Bankrate
6 “Does Closing a Credit Card Hurt Your Credit?,” Experian
7 “Inactive Credit Card: Use it or Lose it?,” Equifax
Elliot Kass is a journalist who has covered global business and technology from New York, London, and San Francisco for more than 30 years.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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