Choosing the right credit card: Five questions to ask yourself


Because there's no one way to use your credit card, you should consider your habits and criteria of the differents cards available.

Marie-Christine Daignault | Desjardins Group

A credit card can be a valuable ally when used wisely. To choose the card that best suits your lifestyle (and not your credit aspirations!), it's important to have a good grasp on your consumer habits.

Here are five questions to ask yourself when choosing the right credit card for you.

1.  What type of credit card user are you?
Do you use your credit card on a regular basis or just occasionally? People use their credit cards differently: Some use their card to pay for practically all of their expenses, while others use it only for online shopping or specific purchases. Some carry a balance every month and others prefer to settle the amount in full. 

Because there's no one way to use your credit card, you should consider your habits and criteria such as: 
  • Interest rates
  • Annual fees
  • Rewards programs
  • Other benefits such as special insurance, discounts, privilege rewards
2. What do you mostly use your credit card for?
Depending on the card, the interest rate on the unpaid monthly balance and the annual fee can vary. That's why it's important to understand why you're using a credit card and not another payment method. 

Do you use your credit card to...

 ...avoid transaction fees?
When you use a credit card like a debit card, you avoid transaction fees. To take advantage of the 21-day interest-free grace period on your purchases, the account balance must be paid in full every month.

 ...get rewards?
Some credit cards offer very enticing programs that are just that if the card is used regularly and the balance is paid off every month. (lien vers le texte sur les programmes).

 ...finance purchases?
There are credit cards with lower interest rates that, despite the fees, can be more beneficial than other credit cards to finance a purchase or project. 

3.  Am I a rewards points or cash back person?
The real question is this: Do I want to benefit now or later? There are two types of rewards: 

1. Cash back 
More tangible, cash back cards offer rewards that are lower in value but more frequent. This type of reward is great if you use your card less frequently but still want more than a basic credit card.

2. Points 
Earn points over time to redeem for products or more substantial discounts over a longer period of time. It's great if you're a frequent flyer.

4. Am I a globetrotter or a weekend warrior? 
Every card comes with travel insurance but the length and coverage vary. If three-day coverage is enough for some, others can enjoy coverage up to 60 days.

Compare each offer to find the advantages that best suit your lifestyle and get you the savings and peace of mind you're looking for.  

5.  How many credit cards should I have?
The idea is to limit the risk of finding yourself owing more than you can repay. Financial institutions and countless businesses offer a wide choice of credit cards. The challenge is making the right choice according to your income, financial commitments and spending habits. 

Note: Having no more than two credit cards helps to maintain a good credit file. Some couples find it useful to have two credit cards to help them separate personal and household expenses.

To help with your decision, see Which card is best for you

Was this article helpful? You might also like: 5 tips of how to put your credit card to better use

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