How to decide which credit card is right for you
It’s 10:34 on a Tuesday I’m at work sipping my coffee and scrolling through Instagram. Productive I know.
I scrolled across a beautiful photo of a beach. Not just any beach this beach looked like paradise on steroids.
The colors in the clouds were so vivid since the sun was setting giving the photo a purplish tint. I envisioned myself there. I wanted that view. I wanted to travel and use the hash tag #travelnoire and insert some kind of quote about beauty, stillness and feeling as if I were home.
I wanted serenity out in Bali, Indonesia. Sitting peacefully among the trees in my fancy roof deck. As I sipped my green juice, hopped into my private pool and pondered on life. All right, maybe I’ve thought this scenario out for a little too long.
I’ve always heard about people using credit card reward points to travel the world. These points would get people free flights, luxury stays at hotels or even cash. This post I’m going to walk you through my thought process behind choosing a new credit card.
Figure out exactly what you’re looking for before you begin your credit card search
It’s important that when you’re looking for a credit card you know what kind of rewards you are looking for. Your spending habits and income play a huge role when considering a credit card as well. Are you looking to gain points from your everyday transactions? Are you looking for flight miles? Are you looking for cash back? etc.
Let the Credit Card research begin
Once you know exactly what you’re looking for it will be easier for you to decide between credit cards. I knew that I was looking for a credit card that offered flight miles. If I traveled out of the country I didn’t want foreign transaction fess on purchases.
What is the credit card’s interest rate? And is there a yearly fee?
Since I planned to pay my balance in full each month I wasn’t really worried about the interest. However it’s still good to know what the interest rate on the credit card is just incase one month you aren’t able to pay the balance in full. You want to be sure you know how much interest you’ll be paying. Some credit cards have an annual fee, be sure to find out if the card your looking into has one.
According to wikipedia: “Annual percentage yield (APY) is a normalized representation of an interest rate, based on a compounding period of one year. APY figures allow for a reasonable, single-point comparison of different offerings with varying compounding schedules.”
When you’re looking for a credit card try to compare your top 3 favorites that you’ve found that meet your needs. This is not a sponsored post, but the card I ended up choosing the Barclaycard.
When you apply for a credit card they’re going to ask you how much money you make each year and also take a look at your credit history. Some other factors will be involved before they deicde if you’re approved and also how much of a limit you’re allowed to spend.
Don’t get trapped in the debt cycle
Americans have built up so much credit card debt because they swipe their cards and pay the minimum amount each month. In the end it will not only take you much longer to pay off your debt, but it will also end up costing you more money.
Your $300.00 purse could easily turn into a $600 one by only paying the minimum payment of $25.00 a month.
According to researchers at Carnegie Mellon
“Credit cards effectively anesthetize the pain of paying,” said George Loewenstein, Carnegie Mellon professor of social and decision sciences (SDS) and co-author of the paper. “You swipe the card and it doesn’t feel like you’re giving anything up to make the purchase, unlike paying cash where you have to hand over bills.” www.cmu.edu/
What I loved and what I didn’t love about the credit card
With the Barclay card I would receive 2X miles on all purchases. Great! I would also get to enjoy 40,000 bonus miles if I spent $3,000 on purchases in the first $90 days or $400 to redeem for a travel statement credit. This card comes with an $89.00 annual fee which starts the 2nd year.
Trying to maximize my credit card rewards.
Wait did you just say I can get 40,000 bonus miles if I spend $3,000 in three months? What! You’re going to give me points for spending my money on things I would already spend it on. This is going to be a piece of cake. I got this!
I was wrong. Like really really wrong. Like Meek Mill tryna battle Drake, wrong.
Things not going as planned
I thought I would be able to easily spend $3000 in three months, but I couldn’t.
I had to get my wisdom teeth pulled out soon. It was going to cost me $500. I wanted to pay the $500 with my credit card and since I already had the $500 in one of my sub saving accounts (Not sure what a sub savings account it I talk more about it here) I would just pay off the balance in full.
Except my credit card came in two days after I got my teeth pulled. Womp Womp. Great now I can’t spend the $500 I was planning to spend to reach me to my 3,000 goal. Urghh.
Plan Ahead, and make room for adjustments
If you’re trying to maximize your reward points and you have a certain time frame to do it make sure that you’re planning ahead for those large purchases.
Break down how you will spend the money. Will you pay your groceries with it?
Will you use it to pay your cell phone bill? Use it to get your car fixed? Buy furniture? Whatever you decide be sure that at the end of the month you will be able to pay the card balance off in FULL.
Even though I wasn’t able to put $500 on my credit card I still had hope that I could reach my goal of spending $3000 in 3 months and be able to get 40,000 bonus miles to travel.
I was on a credit card spending mission, because I’m a Leo and we don’t give up easily.
I started asking my mom and sister if they had any large purchases that they wanted to make? If so they could use my credit card and just give me the cash. I know I could trust them and that they would pay me back.
Letting my mom and sister use my credit card could’ve been dangerous if they didn’t pay me back in time and I didn’t have the money stashed away in my emergency account.
I would’ve gotten sucked into the interest debt cycle. That is a forbidden place for me. (It should be a forbidden place for you too I talk more about debt here) I’ve been there and it’s hard to get out.
I’ve promised myself that once I got out I couldn’t go back. So it’s huge that I pay off my credit card balance in full each month. Remember one of the biggest obstacles that keeps many people from building wealth is debt.
This is because at the end of the month you want to be able to have extra money to save, and invest.
I know that tackling credit card debt can be hard, which is why I’ve created The Financial Goals and Credit Card Tracker Workbook, use this work book to Get your money Charged up! Download your free workbook here.
In the end, I’m still a winner because my mom and dad will always love me lol
Although I didn’t get those extra bonus points, I still feel like a winner because I didn’t overspend just to get air miles. I know I said it was hard to spend $3,000 in 3 months, but in reality it’s not that hard.
Believe me sweetie; I could’ve spent that money, but not without falling into the debt trap. It becomes hard when you promise yourself that you will pay the balance in full each month on top of all your other bills.
It’s easier to swipe your card than it is to pay cash. When choosing to get a credit card be smart about it. It’s not free money, so be sure you plan for it in your monthly budget. Do not and I repeat do not get caught in the debt cycle trying to reach a reward point’s goal. I still have dreams of making it to Bali, Indonesia, but I also have dreams of becoming debt free.
Don’t forget to download your free Financial Goals and Credit Card Tracker Workbook here. Share it with your friends and family!
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