4 Ways to Get a Good Credit Card
Sep 25, 2023
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Good credit cards fit your lifestyle and preferences well. They pay a healthy rewards rate on your purchases, offer other perks, and come with excellent customer service. Fortunately, getting a good credit card is easier than it might sound — even if you’re new to credit cards. This article will dive into how a credit card works and a few tips for getting one that meets your needs and spending habits.
How does a credit card work?
A credit card is a type of financial product that lets you borrow money at your leisure by swiping the card or using the card number for online shopping. Many credit cards let you earn cash back or points on your purchases and offer other perks.
When you use your card, the issuer pays for the purchase. You then repay the borrowed amount each billing cycle — usually 30 days. You must make at least the minimum monthly payment by the end of the grace period (which is also often 30 days) to avoid late fees and damage to your credit score. Any unpaid balances between billing cycles accrue interest, which is added to the balance.
Tips for getting a good credit card
Here are some tips that can help you get an excellent credit card:
1. Improve your credit score
Maximize your credit score before looking for a credit card. First, get a copy of your credit report to see your score and other matters. Make sure there are no errors — these could hurt your score through no fault of your own. If you find any errors, dispute them immediately.
After that, ensure you pay your bills on time, keep accounts open, and maintain low balances without ceasing spending on your cards. These habits help you grow your score to access even better opportunities — not just your first card.
2. Do your research
Credit cards have numerous features, benefits, and drawbacks to keep in mind. Do some research online before you apply for a credit card. First, it’s smart to compare rewards rates and categories across credit cards. Choose a card that offers a higher rewards rate for categories that match your typical spending. For instance, you could consider a card that lets you earn more for spending on groceries and gas. Additionally, consider other perks cards offer, like travel benefits, purchase protection, liability and fraud protection, and phone insurance.
Some cards may offer welcome bonuses that you can earn if you spend a certain amount of money within a specified time frame. For instance, a card may offer a $200 welcome bonus if the card member spends $3,000 within the first three months after opening the account. Compare welcome bonuses and choose the best deal that you can easily meet the criteria for.
Finally, you should compare fees across cards, including annual fees, foreign transaction fees, and balance transfer fees. Considering these costs is important, because high fees could end up outweighing the rewards you’d earn on your card.
3. Read online reviews
Before signing up for a credit card, it's also a good idea to read online reviews from customers who have used the card. This can give you a better idea of the card issuer's customer service and whether they have a high customer satisfaction rate. Choose a credit card from a reputable card issuer with many positive online reviews.
4. Get prequalified
Prequalification involves giving a card issuer some basic information about you and your finances so they can show you what terms you might qualify for with a credit card. The issuer will do a soft credit check, which won’t affect your score.
Prequalification terms are not guaranteed. However, they indicate you have a high chance of getting approved, and your actual terms will likely be close to the ones in the prequalification. Some Canadian credit card issuers will mail you prequalification offers.
Find an excellent credit card
Luckily, getting the right credit card may not be as challenging as you may think. Start by getting a copy of your credit report and working on your credit score. In the meantime, research cards online, read online reviews, and prequalify for your top choices. Following these tips will help you get a card that complements your lifestyle and spending habits.
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