Accessing valuable perks through a credit card is a promising prospect for all of us. But before you start applying for a credit card, you must pick the best credit cards for rewards that fit your lifestyle and spending needs.

Numerous decisions need to be made before you decide to apply. You need to assess your spending patterns, identify the rewards that hold the most significance for you, and evaluate the type of credit card you are most likely to be eligible for at present.

If you travel frequently, the best credit card with travel rewards might be the best fit. However, if you are looking for the best credit cards for beginners, you may need an option that is more straightforward and clearer to understand and use.

This guide provides you with all the information you need about the process of selecting the right credit card for your needs.

How to Choose the Best cards-can-save-you-money">Credit Card For Your Spending and Rewards Needs

Here are the steps you need to work through to identify the best credit card for rewards, fees, and benefits for you.

1. Know Your Credit Score

Start by reviewing your credit report as the initial step in the process of selecting the right credit card. You can obtain your credit report from the reporting bureaus Experian, Equifax, or TransUnion.

This is crucial because the state of your credit significantly influences whether your credit card application gets approved or denied. You can use AnnualCreditReport.com to check all three credit reports without charge once every 12 months.

While examining these reports, make sure to scrutinize them thoroughly. Gain a comprehensive understanding of your credit standing, whether it's positive, negative, or falls somewhere in between.

It's also an excellent move to search for any inaccuracies and promptly report them. Errors in your credit report can occur and may unfairly diminish your credit scores. If you identify any discrepancies, you have the option to dispute them with the credit bureaus.

Additionally, you can access your credit scores, although it's worth noting that the scores you find online may differ from those viewed by your lender. Different credit card issuers establish varying minimum credit score requirements for their cards.

Suppose your credit score currently falls within the "fair" range. In that case, applying for a luxury or premium travel rewards card that mandates excellent or good credit for eligibility might not be advisable.

2. Assess Which Purchase Categories You Spend the Most In

Before you start looking for cards, you should decide whether you want the best credit card with travel rewards or one that rewards more for domestic grocery and supermarket spending. This will help you find the best credit card for rewards you will use and benefit from.

By implementing a well-planned credit card spending strategy, you have the potential to enhance your rewards earnings, particularly when making card purchases in valuable spending categories. For instance, there are credit cards that provide points rewards when you make purchases in specific spending categories, such as:

• Grocery Spending
• Travel Purchases
• Dining Spending
• Gas and Transportation Costs
• Entertainment and Streaming.

Take a moment to gain insight into your spending habits as the next step in your credit card selection process. Consider your monthly expenditures: do you allocate a substantial portion of your budget to groceries for a large family? Do you frequently order takeout or dine out?

Opting for a credit card that offers heightened rewards in areas where you frequently spend enables you to accumulate more points, miles, or cash back.

3. Decide What Type of Credit Card You Prefer

After discovering your credit score and pinpointing your major spending categories, the next step involves researching the best credit card for rewards or other perks that match your needs. During this phase, it's essential to determine which credit card attributes align with your preferences and to establish a strategy for redeeming your points or rewards.

For instance, if you have a particular trip in mind and have already chosen your preferred airline, you might lean towards one of the best credit cards with travel rewards, such as an airline partner card. Alternatively, you could opt for a card that offers more versatility in spending with various travel transfer partners.

Here are some of the most common types of credit cards that you will come across in your research.

Best Credit Cards with Travel Rewards – Hotel and Airline Cards

Credit cards affiliated with specific airlines and hotel chains are a great fit for travelers who have a preference for a particular airline or hotel chain. These cards come with benefits, enhanced rewards earning, and other perks that make your flights and trips more convenient.

Airline credit cards typically provide advantages like complimentary checked bags, discounts on in-flight purchases, and sometimes even automatic elite status. Hotel partner credit cards often grant you mid-tier elite levels with benefits such as complimentary breakfasts, room upgrades, and enhanced points booking payments.

Best Credit Card for Keeping Costs Low – No Annual Fee Credit Cards

Credit cards without annual fees can be an attractive option for individuals seeking to limit their upfront costs while still reaping rewards. You'll be able to access a limited scope of benefits and build up reward points for your everyday spending without worrying whether you are getting enough benefits to warrant paying an annual fee.

Best Credit Cards for Reward Flexibility – Bank Cards

Bank rewards credit cards provide an unparalleled level of flexibility when it comes to redeeming the rewards you earn. These cards also frequently feature substantial bonuses for everyday spending in various purchase categories.

When it comes time to redeem your points, you will usually have the option of selecting cashback or transferring your points to various airline and hotel programs. Owning a premium bank rewards card also opens the door to valuable benefits like complimentary access to airport lounges, free checked bags, and annual travel credits.

Best Credit Card for Starters Who Want to Keep Things Simple – Cashback Credit Cards

Cashback credit cards can be an excellent choice if you prefer simplicity when it comes to credit card rewards. With these cards, there are no intricate rewards programs to work out, and you won't need to worry about fluctuating values of your rewards points. Moreover, cash rewards grant you the ultimate freedom to make savings on any purchases you want.

4. Credit Card Terms You Need to Understand Before Applying for a Card

As you start searching for the best credit card for reward points that align with your needs, it's essential to familiarize yourself beforehand with the fundamental credit card terms that you'll come across.

Equipping yourself with this knowledge will empower you to compare offerings from various card issuers and make an informed choice.

How Do You Earn Credit Card Rewards?

Credit card rewards typically correspond to how much you spend on the card. These rewards often take the form of cashback, points, or air miles.

What is a Credit Card Welcome Bonus?

A credit card welcome bonus is a valuable incentive to attract new customers. To qualify for this bonus, you usually need to meet a minimum spending requirement by a specified period. Successfully meeting this spending requirement results in receiving a cash back, statement credit, or a specific number of points or miles as a reward.

What is APR?

The annual Percentage Rate represents the annual interest rate a card issuer charges, expressed as a yearly percentage. If you regularly pay your entire statement balance by the due date, a card's APR may have less significance, as you won't accrue interest charges on your spending. However, knowing how much extra you may need to pay if you fall behind on your balance is essential.

What are Credit Card Perks?

Beyond rewards points, some credit cards offer additional perks that can prove highly valuable and save a substantial amount each year. Examples of perks on the best credit card with travel rewards include:

• TSA PreCheck or Global Entry credits.
• Access to airport lounges.
• Travel statement credits.
• Rental car coverage.

What are Credit Card Fees?

Credit card fees are additional costs linked to particular cards. Typical fees to be mindful of include annual, foreign transaction, late payment, and balance transfer fees. While some credit card fees may not necessarily be a deal-breaker, it's crucial to make sure you know how much you will be charged when spending abroad or if you are late in paying your bill.

Credit Card Minimum Payments

A credit card minimum payment is the smallest amount you're required to pay each month to avoid late fees and potential damage to your credit score. While it's technically possible to only make minimum payments, it's generally not recommended.

Here's why:

• Interest Charges: If you only make minimum payments, you'll likely be paying interest on the remaining balance. This can significantly increase the total cost of your purchases over time.
• Extended Debt: Carrying a balance can extend the length of time it takes to pay off your debt, potentially delaying your ability to purchase other items or save money.
• Credit Score Impact: While making minimum payments won't necessarily damage your credit score, paying your balance in full each month can help improve it.

To maximize the benefits of your credit card and avoid unnecessary costs, it's best to aim to pay your balance in full each month. If you're unable to do so, try to pay as much as possible to minimize interest charges and reduce your debt.

5. Research The Application Requirements of a Credit Card Before Applying

Good credit scores are a vital factor when seeking approval for a new credit card. However, if you aspire to enhance your approval odds, it's essential to familiarize yourself with additional elements that card issuers may consider. This includes household income, credit history, and any existing debt you have accumulated.

There are also some credit issuer restraints you may need to know about. These include the fact that Amex only extends welcome offers once to a customer. At the same time, Chase typically refrains from approving individuals for a new card if they have submitted applications for five or more cards within the past two years.

Takeaway: How to Choose The Best Credit Card for You – 5 Essential Steps

Choosing the best credit card for rewards requires finding an option that aligns with your requirements. It's advisable to opt for a card that provides optimal rewards in the categories where you spend the most. For example, frequent flyers will want the best credit card with travel rewards contributing to future flight discounts.

Before submitting a credit card application, it's crucial to have a clear understanding of your credit score. And even when applying for the best credit card, for starters, you need to be mindful of any constraints imposed by card issuers that could impact your eligibility for approval or the acquisition of a welcome bonus.