There’s no such thing as a “perfect” or “best” credit card. However, there might be a credit card offer that suits you better compared to others.

If you’re on the hunt for a new credit card, don’t rush the process. Instead, consider these five factors as you narrow down your options and choose your next credit card application:

1. FICO® Scores and Credit History When looking for a new credit card, start by assessing your credit situation. Credit card applications typically involve a review of your credit report by one or more major credit bureaus—Equifax, TransUnion, or Experian. Keep in mind that this type of credit check, known as a hard inquiry, can slightly impact your FICO® Score.Your FICO® Scores are based on the information in your credit reports. They provide the card issuer with insights into your credit management history, indicating how likely you are to repay borrowed money as agreed.Given that your credit history and scores play a role in whether you qualify for a new credit card and the terms you receive, it’s a good idea to review your credit details in advance. You can access your FICO® Scores online via myFICO.com and obtain free copies of your three credit reports at AnnualCreditReport.com.
2. Card Issuer’s Qualification Requirements The next consideration is the types of credit cards you’re eligible for based on your credit reports and FICO® Score. A higher FICO Score increases your chances of qualifying for various credit cards and financing options. Conversely, a lower FICO Score may limit your choices, necessitating credit repair efforts.Some card issuers may disclose their basic qualification criteria for different credit card products. While you may not know the exact FICO® Score required for a particular card, the issuer might specify that applicants need a “good” FICO Score or better to be eligible.Each lender sets its own criteria for credit card qualifications, which may vary by FICO® Score range:
   • 800+ FICO® Score: Exceptional
   • 740-799 FICO® Score: Very Good
   • 670-739 FICO® Score: Good
   • 580-669 FICO® Score: Fair
   • <580 FICO® Score: Poor
   Keep in mind that credit history and scores aren’t the sole factors in the application process. Other details, like income, debt levels, recent credit card applications, and more, can also influence your eligibility.
3. Annual Fee When choosing a new credit card, consider whether the card comes with an annual fee. An annual fee shouldn’t deter you from opening an account if the card’s benefits outweigh the cost.For example, let’s say you’re eyeing a rewards credit card with a $300 annual fee. However, this card offers a $300 annual hotel credit that you know you’ll use. Plus, it comes with other valuable perks that exceed the annual fee. In such a scenario, applying for the card could be a smart move.On the flip side, some annual fee cards may offer benefits that don’t align with your needs. For instance, a monthly gym credit won’t be useful if there are no nearby gym facilities. If you don’t anticipate getting sufficient value from a card to offset the annual fee, it’s wise to explore other options.Additionally, some annual fee cards may feature lower interest rates compared to no-annual-fee cards. Calculate the overall cost to ensure that the annual fee justifies securing a lower interest rate. If you consistently pay off your full balance each month, you can often avoid interest charges on new purchases.
4. Annual Percentage Rate (APR) It’s essential to review the annual percentage rate (APR) offered by a credit card company before applying for an account. If you ever carry a balance from one month to the next, the APR can significantly impact the interest you pay.While the best practice is to pay your full balance each month to avoid interest charges, understanding the APR is crucial. It’s worth noting that carrying a balance to improve your FICO Scores is a myth—always aim to pay in full.
5. Benefits and Rewards One of the most exciting aspects of selecting a new credit card is exploring the benefits and rewards it offers. Many credit cards provide opportunities to earn cash back, points, or miles on everyday purchases.Some cards offer bonus rewards categories, providing higher cash back rates for specific types of purchases. For example, a travel rewards card might offer enhanced rewards for travel-related expenses. Aligning these rewards cards with your spending habits can maximize your points, miles, or cash back.Beyond rewards, credit cards often feature valuable perks like travel credits, airport lounge access, cell phone protection, free checked bag benefits, and rental car insurance.

In conclusion, finding the right credit card can be an exciting journey. Take time to assess your credit situation, compare offers from various issuers, and explore the card features that align with your financial goals before submitting any applications.