Credit Karma Tidbit #2: Choose The Credit Card You Need, Not The One You Want

Deciding between the things we need from the things we want is tough—eating the salad over the burger, heading to the bank instead of the mall, studying or going for a night on the town. In the case of credit cards, choosing the credit card you need instead of the one you want could save you thousands (like this savings dashboard shows) and help your credit score. The key to choosing the right credit card is in finding what benefits your spending habits and encourages responsible credit management. The wrong card for you is the one you choose for its rewards points, retail discount, or promotion offer, and ends up encouraging you to spend more. If one of the descriptions fits you below, the recommended card type could be a match made in credit heaven:

If you carry a large balance month to month… you need a low interest credit card. Low interest credit cards help you save the most on interest charges if you tend to carry heavy monthly balances. While it’s ideal to not carry a monthly balance at all, a low interest card lets you focus on controlling spending at the least cost. The Capital One Platinum Prestige Credit Card offers an amazingly low 11.9% APR.

If you spend on credit daily… opt for a cashback credit card or rewards credit card. If you charge daily on credit, a cashback or rewards card helps you earn money, airline miles, or points back. Extra savvy move if you use cashback earnings to pay off your monthly bill. But, this is ONLY beneficial if you pay your balance in full each and every month. Otherwise, since both cards carry high interest rates, you will pretty much negate your cashback savings and rewards when you pay steep interest charges. A recommended cashback card is Chase Freedom Visa, which has a generous $100 cash back offer right now.

If you need to build credit… go for a secured card. You need to pay a security deposit and secured cards come with application fees, but it also safeguards against defaulting on monthly payments. It’s one of the best ways to rebuild credit. Public Savings Bank Secured Card is a popular choice, with no credit check and no annual fee.

If you need to pay off credit card debt… check out a balance transfer credit card. Move existing credit card debt to a balance transfer card, which offers 0% APR on balance transfers for 6-18 months. You can save a significant amount of money on interest on your debt. The key to saving the most money is to fully pay off your debt before the 0% APR offer expires, and watch out for any additional balance transfer fees. Citi Platinum Select Card has a 0% APR for purchases for 12 months and an awesome 0% APR for balance transfer for 18 months.

You can check out this credit card categories, plus recommendations and reviews for credit cards.

About Credit Karma: Before another trial-and-error lesson in personal finance costs you cash and stress, take money matters into your own hands. That’s what Credit Karma’s CuteGeek column is all about: personal finance lessons to help CuteGeeks get good financial karma and build a great credit score.