Credit Card Confidence
According to WalletHub, there are more than 1,500 different credit cards available to consumers. The freedom of choice can be empowering, but with so many options to choose from, how do you know which one is best for you?!
WalletHub has an interactive credit card comparison tool that can help you learn more about the various features of each credit card, and includes expert thoughts from industry professionals including Yeske Buie Partner, Lauren Stansell. Lauren was asked to share her thoughts on the best credit card for beginners, and the one she suggested is the Capital One Platinum card. Her full thoughts on the Platinum card are listed below. And of course if you have questions about what credit card would best suit your specific needs, please don’t hesitate to contact your Yeske Buie Financial Planning Team!
Which type of credit card is better for beginners: one with no annual fee and no rewards, or one with rewards and an annual fee?
It depends on your goals for the card – are you just starting to build credit or are you specifically looking for rewards? And if you are looking for rewards, do you know what type of rewards you want and how to use them? Rewards cards can be a great way to earn perks, but you have to know how to use the rewards and commit to managing the rewards and getting the most out of them. The annual fee can often be “paid for” by some of the rewards offered, but you have to actually take advantage of the rewards to make it worth it.
Cashback rewards cards can be great because of the flexibility provided. You can use the cashback on anything you want: paying off your monthly balance, paying off other debt, saving, spending on yourself, etc.
One thing we think is important before getting a credit card (or another one if you already have one) is setting policies with yourself. Credit cards have notoriously high interest rates so it is expensive to hold a balance on your card and make minimum payments over time. Instead, it is wise financial hygiene to plan to pay off your credit card balance every month; you can set up automatic payments to ensure timely payment without even having to think about it each month. But it does mean you need to spend within your means, even with access to a high credit limit. If you have a large purchase to make that you cannot afford with your monthly cash flow, look into other financing options (or use the special introductory 0% interest rate period many credit cards offer) and make a solid (and doable) plan to pay it off within a certain period.
Why don’t more credit card companies offer cards for people with limited or no credit history?
Credit card companies want to have confidence in your ability to wisely use your credit and pay off any balances you incur over time – with no credit history, they can’t confirm that ability and often won’t extend credit.
When is the best time to apply for a credit card like Capital One Platinum?
The best time is when you’re confident in your ability to use a credit card wisely and clear on your plan of action for managing your cash flow. If you don’t have enough credit history (or a high enough score), focus on improving your credit first.