When searching for a credit card, it's important to keep your buying habits in mind. Do you spend heavily in one category each month, such as at grocery stores or restaurants? Or is your spending spread out? Your spending habits are the most important factor to consider when searching for the right rewards card for you.
If you spend most of your money at grocery stores and dining out, look for a card that provides the most rewards for those purchases. If you're constantly charging gas purchases, look for a card that provides the most cash back or rewards pumps for fuel charges.
And if you spend in a wide variety of categories each month? You might look for a card that offers higher cash-back bonuses in specific categories that rotate.
Do you have a lot of existing credit card debt? If you are burdened with credit card debt, consider a credit card that offers 0% interest on balance transfers for a limited time. Many cards will let you transfer debt from other cards at an interest rate of 0% for 12 to 18 months. If you pay off this debt during that period, you'll be able to eliminate it without paying high interest rates. Just make sure you pay off that debt before the 0% offer ends.
Are you a frequent traveler? If you fly often, look for a credit card that provides miles instead of cash back. You can then use those miles to book free flights around the globe.
Do you want more flexibility? If you want the option to use your rewards however you want, a card that offers cash back might be a good choice. You can usually have this cash back deposited directly into your bank accounts, use it to pay down your credit card's balance, turn it into gift cards, or even send it to a charity.
How strong is your credit score? The higher your credit score, the more likely you are to qualify for credit cards with strong rewards programs and valuable welcome bonuses. If your score is low, though, you might have to settle for a more basic card. Use that card and pay off your purchases in full each month. Over time, this record of on-time payments will help boost your credit score.