How to Pick a Credit Card for Good vs. Poor Credit

Choosing a credit card is not something you should do lightly. We often hear from members who want to repair their credit, and sometimes they tell us that they ran into trouble because they chose the wrong credit card. Not all credit cards are the same.

Whether your credit is good or bad, you need to understand how to evaluate credit cards. Credit cards for good credit have different qualities than credit cards for poor credit. We’ll help you understand the difference.

Which Credit Cards are Best for Good Credit?

Let’s start by talking about which credit cards you should consider if you have good credit. When you have a decent credit score (690 or higher) you have some leverage. More options will be available to you than if your score were lower.

Here are some things to consider when you’re evaluating credit cards for good credit:

• Compare interest rates. If your FICO score is good or excellent, then you can probably qualify for a low interest rate. Most credit card issuers will give you a range of potential interest rates. If you know your credit score, you can determine what your interest rate will be.
• Check the balance transfer policy. If you’re applying for a new card and your credit is good, you may be able to transfer your current balances to the new card at a lower interest rate. Just make sure you read the fine print – sometimes low transfer rates are only offered for a limited time.
• Compare rewards and perks. If your score is good, you’ll have your pick of a wide range of cards. You may want to consider looking at a card that has cash back rewards or points, especially if you charge a lot and pay your balance each month.

If your score is very high, you’ll be able to pick the best deal possible. Just make sure to do your evaluations before you apply for a new card. Remember, each time a potential creditor pulls your report, it has a small impact on your score.

Which Credit Cards are Best for Poor Credit?

If your credit is poor or damaged, your options are somewhat limited when it comes to qualifying for a new credit card. However, that doesn’t mean you shouldn’t do some comparison shopping and try to get the best deal possible. Here are some factors to keep in mind as you weigh your options:

• Consider a secured credit card. If your credit is very bad or you have no credit history, your best bet might be to get a secured credit card to start. A secured card is secured by a deposit you make, usually enough to cover your credit limit. For example, if you got a card with a $500 limit, you’d have to pay a $500 deposit.
• Compare annual fees. Sometimes, credit card companies offer cards to those with poor or limited credit, but they charge an annual fee. Charging a fee is one way these companies protect themselves. It’s not always a bad idea to get a card with a fee attached, especially if it helps you establish good credit. Just make sure you know how much the fee is before you commit.
• Compare interest rates. It’s common for major credit card companies and banks to offer cards with low limits and huge interest rates to those who can’t qualify for their regular cards. It might be worthwhile, but make sure you compare the rates and understand what you’ll be paying. Some rates are tied to the prime rate and may fluctuate.
• Look at rewards, points and cash back options. Even if your credit isn’t great, you may still be able to get a card that offers you some nice perks. There are a few cards that offer cash back after you spend a certain amount, and they’re accessible even to people who don’t have good credit.

The most important thing you can do is read the fine print before you apply for any card. It’s your job as a consumer to understand what having a credit card entails. If you don’t understand something, pick up the phone and ask.

Whether you have good credit or poor credit, you should still plan on doing some research before you apply for a new credit card. Interest rates, fees and other rules can vary greatly from card to card, and doing your homework will ensure that you get the post possible card for your needs.

If you have any other questions, feel free to get in contact with a team member at your local branch.