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What Should You Look for in a Credit Card Company?

June 5, 2014
Credit Cards
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It’s all about the little things, or so the saying goes. This philosophy is embraced by the business community; in a marketplace full of similar options, many try to stand out by providing extra perks or services.

Credit card companies are no different – in recent years, many have upped the ante on the benefits they provide to consumers in an effort to outshine competitors. So what exactly should you look for in a credit card company? The answer depends on what you value, but check out the information below for some ideas.

First consider the basics

Keep in mind that the most valuable quality a credit card company can have is a product that meets your needs. In other words, you should look for a card with features that are valuable to you. Secondary perks and services offered by the credit card company are just that – secondary.

Broadly speaking, the first step is to decide on the type of card that suits you. To figure this out, ask yourself the following questions:

  • Am I dealing with credit card debt? If so, you might want to consider a balance transfer card. This will help you pay down your debt faster by cutting your interest payments.
  • Do I travel a lot? In this case, you’ll want to look at cards that offer miles or points toward your next trip.
  • Am I looking for a simple rewards system? If miles and points are too much of a hassle for you, a cash-back card might be just the ticket.
  • Do I need to focus on rebuilding my credit? There are a lot of cards out there that have low credit score requirements; finding one and using it responsibly will help get your credit back on track.

Then examine the not-so-basics

Once you’ve nailed down the type of card you’re looking for, it’s time to get a little more granular. Since most major credit card companies offer cards in all of the categories listed above, you’ll want to dig a little deeper into each to decide on a specific card.

But what exactly should you consider as you’re comparing similar cards offered by different issuers? Here are some not-so-basic features to think about:

  • Customer service – It might be worthwhile to do some Internet research about each issuer’s reputation for providing good customer service. Friendly, efficient and accessible representatives can go a long way toward improving your experience with a card.
  • Security – Getting hacked is a hassle, so choosing a card that from a company that takes security seriously could save you a lot of headaches.
  • Online tools – Some people do all of their banking online, so see if the web tools offered by a prospective issuer are up to your standards before signing on.
  • Credit monitoring –Increasingly, credit card companies are providing free FICO scores on customers’ bills; if monitoring your credit from month to month appeals to you, look for an issuer that offers this perk.
  • Purchase protection – This is a catch-all term for benefits like extended warranty and price protection. These can come in handy, so read up on the policies offered by companies you’re considering before committing to a card. (Note: In some cases, purchase protection is offered through payment processors, not a card’s issuing bank. Again, do some investigating before signing on.)

Final suggestions

Knowing what to look for in a credit card company can be confusing, but the Nerds have given you a good framework for making an informed choice. Here are our final words of advice before sending you on your way:

  • Be fierce about shopping around – Wading through all the options on the market might seem tedious, but shopping around is key to finding just the right card. Don’t neglect this important responsibility!
  • Consider alternatives – Big banks aren’t the only game in town. Some credit unions and local banks also issue credit cards; this option is worth considering, especially if your credit history is limited or poor.
  • Apply carefully – If you get a card and end up regretting your decision, wait a few months before applying for a different one. Too many new credit inquiries in a short period of time could hurt your credit score.

And remember, the Nerds are always here with the latest credit card news and advice – check back often!

Credit card issuer image via Shutterstock