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How You Should Evaluate Credit Card Offers

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023 - How to Evaluate Credit Card Offers

Credit card offers are everywhere! From college campuses to your mailbox at home, and even the sidebar advertisements on the websites you visit. These companies want you to apply for their cards and start making charges as soon as possible. But does that mean you should?

A credit card is just like any other type of loan. You’ll not only be financially obligated to pay the card issuers back, but you’ll also be subject to the terms they put forth. And if you’re careful about what you agree to, then you might be signing up for a lot more headache than you bargained for.

Here’s how you should evaluate credit card offers and pick the best ones to fit your financial needs.

What’s My Goal with This Card?

What are Credit Cards For?No matter what type of credit card you’re hoping to get, one of the first questions you’ve got to ask yourself is: What is this card going to do for me?

For instance, I love credit cards with great rewards programs that I can later turn into gift cards or cashback. So, I purposely will seek out the ones that will give me the most points for the things I buy frequently like online purchases or trips to the grocery store.

Maybe you’re looking for a great credit card that:

  • Has a  lower interest rate
  • Offers balance transfer opportunities
  • Will accept you even if you have a low credit score

It doesn’t matter what the reason is. The goal here is to be an advocate for yourself and get a card that’s going to change your financial situation for the better.

What Else Can This Card Do for Me?

What Do Credit Cards Do?

Credit card rewards and 0% APRs are nice, but that’s not all a credit card can offer you. To be competitive, many issuers are now throwing in all kinds of extra perks to make their card really stand out from the crowd. 

When we were planning a series of family vacations one year, we purposely applied for a credit card that was affiliated with our favorite airline. Why? Because it meant we could check our bags for free. Even though that’s a pretty small thing, it was very convenient and we got a lot of benefit out of it.

Checked bags are just the icing on the cake. Some credit cards can get absolutely crazy with the amount of perks they’re willing to offer you.

For example, have you ever heard of the legendary American Express Centurion Black Card? It’s an exclusive, invitation-only credit card that automatically gives you elite status with dozens of different hotels, airlines, and other travel programs. However, to qualify, you have to spend $500,000 per year – good luck with that!

While that one might be a little extreme, there are plenty of other “regular” cards out there that offer more practical perks like:

  • Extended warranties
  • Special dining privileges
  • TSA PreCheck
  • Rental car insurance
  • Early access to entertainment venues
  • And many, many others

Be sure to check so that you know everything you’re entitled to.

Where Did the Offer Come From?

What is a Credit Card Offer?

I’ve received random credit card offers in the mail every other day for years now. And honestly, about 99.9% of them end up going straight into the garbage.

Why? First of all, many of these cards are from banks I’ve never heard of. The last thing I need is to apply for a credit card only to find out that it was an identity theft scam.

Secondly, from my experience, the best credit card offers are the ones that you seek out yourself.

There are dozens of sites devoted to evaluating credit cards that have led me to offers from Chase, Citi, and Captial One that have resulted in all kinds of free flights and hotel nights. Believe me – you don’t have to look very hard to find legitimate offers that are going to be great.

So do yourself a favor. Ignore the spam and be very selective about what you apply for.

How Much Will This Cost Me?

For years, I had a stern policy that any credit card that had an annual fee should be automatically passed over. Why? Because why should I pay anyone for the privilege of letting me spend my own money? That just sounds ridiculous!

But then that all changed when I started getting into the credit card rewards game. In fact, there was one card from Chase where I paid an annual fee of nearly $400 to get. Why in the world would I do that?

Hear me out. The introductory reward offer on the card was $1,000 of points that could be redeemed for cash. And if that wasn’t incredible enough, it also offered $300 of travel credit per calendar year, which since it was June I got this perk twice and was able to get $600 total.

So, let’s review. Spend $400 to get an easy $1,600 in rewards? Absolutely! You can sign me up for that deal all day long.

Now obviously, not every credit card with an annual fee is going to be worth it. To know for sure, you have to take a few minutes to calculate the cost against the benefits it will provide.

Keep in mind that this doesn’t just apply to rewards. For instance, if the card has a great balance transfer offer that could potentially end up saving you thousands of dollars in interest payments, then that could be just as lucrative as any rewards offer.

What Are the Other Fees?

 Annual fees are just one of the costs that credit cards have. Remember that they can also charge you in other ways too.

For example, one time when I was younger and in Canada on vacation, I paid for several things on my credit card.

When I got home to the U.S., I learned very quickly that each of those purchases incurred a foreign transaction fee which added up to a lot of unnecessary expense. Now I look for this little detail when I apply for new cards.

All the same, if you utilize cash advances and frequently have late payment fees, then these are other charges that you’ll want to read in the fine print and know upfront how much they will cost.

The Ultimate Question – Could I Get a Better Offer?

If there’s one thing I’ve learned from years and years of churning through credit cards, it’s this: There’s always a better offer just around the corner. 

Just when you think you’ve signed up for a great introductory offer or some awesome rewards program, another card issuer will come along and put out an even sweeter deal. 

The best thing you can do for yourself is to:

  • Keep your eyes open for new deals
  • Work towards keeping your credit score high and in good standing at all times
  • Be patient

Do this for long enough and be selective about which ones you pick, and you’ll be sure to always have the credit card that’s right for you.

Contributor’s opinions are their own. Always do your own due diligence before investing.

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Written by DJ Whiteside

DJ writes about retirement and credit cards. He loves looking for new ways to optimize savings, build wealth, and sharing what he learns with others.

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