How Lifestyle Drives Credit Card Perks

ElitePersonalFinance
Last Update: February 7, 2021 Credit Cards

Choosing the right credit card is not a question that offers better rewards. Instead, the right question should be: “What credit card reward program best fits my lifestyle.” Many articles will tell you this credit card is better than another. The truth is that people have to pick their credit cards based on different criteria.

In this article, we’ll look at how you can choose the perfect credit card based not on broad appeal but rather based on your unique financial position. We’ll explore how using your self-defined, long-term plan will enable you to select a card that accelerates your goals or helps to erase debt gradually.

Choosing to Correct The Past

The first thing to do when selecting the right credit card is to decide whether you want to focus on the past or the future. Credit cardholders with high existing balances reduced credit from previous mistakes, and a weak debt profile may want to concentrate on fixing their credit history. Choosing a credit card designed to help restore credit and defray prior balances is an effective way to erase past errors.

One great debt-correction card is the U.S. Bank Secured Visa Card. This secured credit card helps you restore credit. The card offers a credit line up to $5,000 if the holder can provide collateral. This aspect is critical because it affects curtailing excessive spending and keeping the cardholder under control. After a 12-month period, the cardholder’s spending is evaluated. If the payment history is adequate, the owner can upgrade to an unsecured card, thereby improving a credit score over time. As with most cards in this family, the APR of 19.24% is considered high. However, the annual fee of $29 is affordable.

Credit card users seeking to correct the past may also want to consider cards with a high balance transfer offer. With this method, the cardholder moves the existing high balance from an old card onto a new card. The new card offers a small or even a 0% APR on the balance transfer amount. This reduced rate allows the holder to pay old balances without the added burden of high-interest rates. Chase Slate is the most impressive option for this goal. The card offers a 0% APR for the first 15 months of balances from transfers and new purchases. Keep in mind that the transfer limit is $15,000. Additionally, if you believe you will need a period longer than 15 months to pay off past debts, consider first that this card carries an APR of 13%-23%.

The Citi Simplicity card is optimized for those requiring a longer period to pay off balance transfers. This option permits a 0% APR for 21 months. The APR is identical to the Chase Slate card. Be aware that the card carries a transfer balance of 3%. Late fees are non-existent, and there is no annual fee. Secured cards and balance transfer optimized cards are excellent options for those working to repair past credit problems. If you’re committed to rebuilding credit and correcting the past, these cards are for you. However, remain vigilant, the credit card companies use an enormous amount of data to construct these offers, and they’re aware that most balance transfer customers are not likely to eradicate their debts in 15 or even 21 months. Therefore, be sure that you have a realistic plan to eliminate all debt within the required period. Otherwise, you’ll face heavy APRs.

Choosing to Optimize The Future

Credit card companies want your business, and they’re willing to pay for it. Those with a strong credit history can enjoy incredible benefits and savings. The question you must ask yourself is, “how does my spending profile indicate which card is best for my budget?” The aspect of lifestyle becomes an important consideration.

A strong cashback offering is best for those with a family and children. Better still are credit cards that offer healthy rewards on everyday spending categories like groceries. The Amex Blue Cash Preferred has always offered the strongest rewards for standard categories. The card’s most powerful aspect is a 6% cashback bonus on all groceries up to $6,000 a year on spending. The Capital One Quicksilver also offers a respectable flat 1.5% cashback without an excessively high credit score prerequisite.

While cashback is a benefit everyone can enjoy, those with more particular lifestyles will benefit from deeper research where the net cash value is even greater. If you’re a frequent traveler, the Chase Sapphire Preferred card has excellent value. Cardholders will earn 2 points for each dollar spent on travel or dining. The value compounds as users opt for the Chase Ultimate Rewards booking service, where points increase by 25%. One additional value comes from a bonus totaling 50,000 points earned after spending $4,000 within the first three months of opening the account. Coupled with the 25% jump earned through Chase Ultimate Rewards, this nets out to a value of $625 on travel. If you can accurately project your future spending on travel and dining, do the math and choose this card.

Finally, consider the Chase Freedom card for those who are uncertain of their future spending patterns. The 5% cashback offering is robust, and the applicable categories rotate so that the user enjoys an even spread of perks. These categories include restaurants, groceries, gas, and even wholesale clubs. Go for the $150 bonus by spending $500 within the first three months of opening the account.

When choosing a card, take a moment to understand your spending patterns. The best value for one consumer is a poor choice for another. Start with your personal budget, examine the high spending categories and decide from that information which way to go.

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