7 Factors to Consider When Comparing Credit Cards

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If you ever seriously try to compare credit cards, you might notice how much it’s like navigating the cereal aisle at the grocery store. The abundance of possibilities is alluring, but if you really try to make an informed, analytical choice, you could become a victim of “analysis paralysis.”

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It doesn’t have to be that way. To help make your credit card comparison a little bit easier, here are seven key factors to consider. (You’re on your own with the cereal.)

1. Understand Your Financial Profile and Spending Habits

Before you start comparing credit cards, it’s best to understand your own financial profile. Your credit score and credit history play a big role in what type of credit card you can get.

2. Ask Yourself: Why Do I Want a Credit Card?

Whether you’re getting your first card or adding to a collection, ask yourself why you want a credit card.

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3. Compare Credit Card Rewards

One of the biggest benefits of having a credit card is that many offer rewards for purchases you’re already making. Some cards offer a percentage of purchase spending as cashback, redeemable for statement credit, while others offer points or travel miles for every dollar you spend.

4. Compare Annual Fees

Another way to compare credit cards is by an annual fee, which can range anywhere from none to upward of $450 for “elite” travel cards.1 Typically, cards with more lucrative rewards charge higher annual fees.2 But that doesn’t mean you can’t find a great rewards card with no annual fee.

5. Compare Interest Rates

Credit cards can have a variety of different interest rates, aka APRs. APRs for purchases, balance transfers, and cash advances, for example, are usually all different.

6. Compare Additional Fees and Penalties

Along with APRs and annual fees, some common credit fees include balance transfer fees, cash advance fees, foreign transaction fees, late fees, returned payment fees, and many more. Whether you’ll have extra fees depends on how you use your credit card.

7. Compare Extra Benefits

Many credit cards offer additional benefits like rental car insurance, airport lounge access, roadside assistance, and extended product warranties, to name a few. But it’s not uncommon for extra benefits to come with a higher annual fee.