Credit Card Conundrum

By: AnnaMarie Mock, CFP®

Although credit cards have a negative connotation, they can be a useful tool to have in your wallet. There is a wide array of benefits associated with different types of cards, i.e. cash back, reward points, etc. The card you choose can have a significant impact on your financial wellbeing, so here are some steps to help select the credit card to best fit your needs.

1.     It is important to identify your current credit score because the type of credit card you can apply for hinges on your overall credit health. This will narrow down what cards will most likely be approved; excellent credit qualifies for a larger variety of cards versus poor to average credit which may lead to higher interest rates and a limited selection. is a federally sponsored government website that allows for a free credit report from all three credit reporting agencies (Experian, Equifax, and TransUnion) once a year.

2.    Now that you are aware of your credit range, there are three main types of credit cards to choose from; low interest rates, rewards, and credit builders. Select that card that fits your needs and achieves your goal.


3. Once you know what type of card you prefer, compare the offers from each card; Nerd Wallet has a list of the best cards of 2018. A general question that should be applied to all types of cards is what is a competitive interest rate for that type of card.

Filter the cards by asking the right questions:


4. After deliberation, apply for the card that has the highest value and meets your needs. If you’re still not convinced this is the best card, look for additional deciding factors that are added benefits.


I would like to acknowledge that carrying a revolving credit card balance can be very expensive; credit cards use compounding interest, so the balance due can accrue very quickly. We suggest paying the balance in full each month to avoid any additional interest expenses. However, if you have existing credit card debt, create a payment action plan to pay down the balance quicker, and key is to stick to it. There are many websites and apps that can help at little to no cost: Debt Manager, Debt Eliminator, Undebt it. If you have any questions, please do not hesitate to reach out to your financial advisor.