How to compare credit cards
- Figure out the features that are most important to you. This will depend on the type of card you're choosing. Let's say you need a balance transfer card. The features to look at would be the length of each card's balance transfer offer and its balance transfer fees.
- Check for any annual fees on the cards you're comparing. If you're stuck between two credit cards that work for you, one of them may have a cheaper annual fee.
- Use secondary features as your tiebreaker. These are the features that aren't quite as important but still have value. Secondary features could include sign-up bonuses or a FICO® Score for free.
- Read the fine print. All credit cards display common card features in a standardized format. Keep an eye out for the following fees and compare them to other cards: balance transfer, cash advance, late payment, and foreign transaction.
Do you need a credit card?
Although a credit card isn't a necessity, there are several ways it can help you financially. Our credit card guide could help you learn these important things:
- Improving credit: The best credit cards can help you build or rebuild your credit. When you use your credit card and pay the bill on time, your credit score will go up. This can help you qualify for financing, such as a car loan or mortgage, at a low interest rate.
- Earning rewards: With rewards credit cards, you can earn cash back or travel points on purchases.
- Fraud protection: Legally, you're only liable for up to $50 in losses if your credit card is used fraudulently. But most credit card companies go even further. Many credit cards offer zero-liability policies -- meaning you aren't responsible for any fraudulent charges. You also don't need to worry about a thief draining your bank account through your credit card (which could happen if your debit card was stolen).
- Extra perks and discounts: Credit cards can offer all kinds of benefits, such as extended warranty coverage on purchases or complimentary rental car insurance. Many of the best credit cards of 2024 have features that can be worth hundreds of dollars or more.
When should I have one credit card?
You should stick to one credit card if:
- You want to keep your finances as simple as possible.
- You've never had a credit card before, or you've been using credit cards for less than a year.
- You've had problems with missed credit card payments or overspending.
- You value simplicity in managing your finances and don't want to worry about tracking multiple bills.
When should I have multiple credit cards?
You should carry multiple credit cards if you want more card benefits and you're confident in your ability to manage everything. There are some big advantages to having multiple cards:
- You can carry cards that earn more in different areas, such as one flat-rate cash back card and another with bonus categories. This is a simple way to maximize your rewards.
- You can use features from each of your cards and get more value overall. Instead of choosing between two of the best credit card offers, you can have both.
- You'll have more available credit, which helps you maintain a lower credit utilization ratio. This can result in a higher credit score.
How to improve your credit score
Your credit score plays a large role in which credit cards you can get. If you have a low credit score and you work on raising it, that will open up more credit card options for you.
Here's the best advice you can follow to improve your credit score.
Review your credit report
You're legally entitled to a free annual credit report from each credit bureau (Equifax, Experian, and TransUnion). Go to AnnualCreditReport.com to request it.
Once you have your credit reports, review them for errors that could be damaging your credit score. If you find any errors, visit the website of the credit bureau that issued the report to file a dispute.
Get a credit card
The easiest way to improve your credit is by using a credit card and paying the bill on time. If you don't have a credit card, look for the top credit cards aimed at consumers in your position.
If you don't have much credit history yet, the best credit cards for beginners would be ideal. If you're rebuilding credit from issues on your credit history, then secured credit cards are the most suitable option.
Stay below 30% of your credit limit
The amount of your credit that you use impacts your credit score. Say you have a card with a $1,000 credit limit. If the balance is $500, that would put your credit utilization ratio at 50%.
A lower credit utilization helps your credit score. As a rule of thumb, aim to stay under 30% credit utilization at all times. It's good for your credit, and as an added perk, it helps you stay out of credit card debt.
Follow good payment habits
Learn your credit card's due date and always make your payment on time or early. Each on-time payment improves your payment history, which is the biggest factor in your credit score. You may want to set automatic payments so you don't miss any.
It's also recommended that you pay off your credit card every month. While this isn't necessary for your credit score, it's a way to avoid interest charges on your credit card purchases.
2025 Award Winner
