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If you ask 10 different people to create a list of the best credit cards, you might get 10 different responses. With so many varieties of credit cards offering a multitude of benefits, choosing the right credit card is no easy task. Even so, this isn’t a decision to take lightly.

The best credit card depends entirely on your plans for the card and what you’re hoping to gain by being a cardholder. Some people apply for any random credit card and they never consider their unique needs. Don’t make this common mistakes. To get the most out of your credit card experience, find a card with benefits that match your spending lifestyle.

The selection process can be a bit overwhelming and tedious, but the right card can shape your entire credit card experience for the better. The way you answer the following questions can help you determine the best credit card based on your habits and lifestyle.

Discover the Best Credit Cards

What is your credit score?

Before searching for the best credit card, make sure you know your credit standing. Your credit history decides which cards you’re eligible for; and by knowing your credit score, you don’t waste time applying for cards you can’t get.

Some credit cards are specifically designed for people with good credit and other cards are designed for people with bad credit. Never assume that you have good credit. Order a copy of your credit report from the three major credit reporting bureaus or request a free copy of your reports from AnnualCreditReport.com. You should also order your credit score.

Credit scores range from 300 to 850, with many credit card issuers classifying good credit as a score 680 and higher. If your credit score falls on the higher end of the range, it’ll be much easier to get approved for credit.

Getting a credit card with bad credit is a bit more challenging, but doable. For the best chance of an approval, look for a secured credit card or an unsecured credit card for bad credit. Secured credit cards might be the best credit card for bad credit because they don’t require a strong credit history. In fact, you can get a card with no credit. These cards do require a security deposit, so shop around and compare security deposit amounts and other fees to minimize your costs.

An unsecured bad credit card is another option. Since these cards don’t require a security deposit, expect a higher interest rate and a lower credit limit. Shop around to find a lower rate card. If you can’t find a competitive rate, pay off your card every month to avoid excessive interest charges.

How much existing credit card debt do you have?

If you have existing credit card debt, the best credit card for you might be a balance transfer credit card offering an introductory rate of 0%. Balance transfer credit cards are unique because you can move your balance from one credit card to another card.

Choose a balance transfer credit card with zero interest for the first six to 18 months, and seek out cards with a low ongoing interest rate to save on future interest charges. No interest or low interest helps you pay off the balance sooner because a greater percentage of monthly payments go toward decreasing the principal balance.

A balance transfer credit card, however, is not the right choice for everyone. Only apply for a card if you’re committed to paying off your credit card balances during the 0% interest period. Make sure you compare balance transfer fees before applying and choose cards that offer 0% interest on purchases as well as balance transfers. A balance transfer fee is a percentage of the transferred amount and ranges from 3% to 5%. Keep an open eye for cards that don’t charge this fee to save money, especially if you’re transferring a large balance.

How often will you use the credit card?

Rewards credit cards are attractive, but not everyone finds them beneficial. When shopping for a credit card, consider how often you’ll use the card. Will you only use the card for emergencies? Or do you plan to use the card for everyday purchases? If so, a rewards credit card is the right choice for you because you can earn points or miles for every purchase. And once you have enough points, you can redeem them for various items.

There are different rewards programs, and redemption options depend on the type of card. If you’re a frequent traveler, look for travel or hotel credit cards where you’ll earn points or miles toward airfare discounts, hotel nights, car rentals, cruises, and tours. This is perfect whether you travel domestic or international, and some rewards cards don’t charge a foreign transaction fee resulting in additional savings. Before getting a travel credit card, compare the card’s travel benefits, blackout periods and redemption process.

Then again, maybe you don’t travel often. You can still earn rewards by using your credit card. There are non-travel cards that offer cash back and points redeemable for other stuff too. For example, request check, statement credit, a gift card, or redeem for merchandise, travel and more.

To benefit the most from a rewards credit card, use the card often, and see if you’re eligible for a sizable credit limit. Your income and current debt load ultimately determine your credit limit. If you’re able to score a generous level of available credit, use the card for all monthly purchases to accumulate points faster. Buy groceries, fill up your gas tank, pay your rent or mortgage, or use the card to pay utility bills.

As a word of caution, only use the credit card for bills and other expenses if you’re committed to paying off the balance in full every month. Determine how much you can afford to put on the card each month; and once your statement arrives, pay off the balance.

Rewards credit cards tend to have higher interest rates, hence the importance of not carrying a balance from month-to-month. You typically need good credit to get a rewards credit card, so check your credit report beforehand to ensure you’re the right candidate.

How do you feel about annual fees?

Some credit card users don’t think twice about paying annual fees. These fees can be expensive year after year, so seriously consider whether you need a card with a fee. Truthfully, if you only use a credit card in an emergency, don’t get a card with an annual fee.

Credit card issuers charge annual fees to counterbalance the cost of the card’s benefits and rewards program. If you’re not using a card enough to take advantage of a rewards program, there’s no reason to pay annually for the privilege of having the card, especially when plenty of credit cards don’t charge a fee.

If you’re thinking of applying for a card with an annual fee, make sure you understand the card’s benefits. In other words, what are you getting in return for this fee? Does the card offer an exceptional rewards program or other benefits justifying the fee?

Seriously, will you use the card’s benefits?

Just because an annual fee credit card has impressive cardholder benefits doesn’t mean you should run out and apply for the card. Remember, annual fees are only worth the cost when the fee results in significant savings over the course of a year.

Be honest and ask yourself, will I actually use these credit card benefits? The benefits might be attractive, cost-saving alternatives, but they might not be conducive to your spending habits or lifestyle.

If you’re not a frequent traveler but rather someone who prefers staying close to home, you don’t need a card offering travel rewards or premium travel benefits like concierge services, Priority lounge memberships, a personal travel advisor or elite hotel perks. These cards might also have higher interest rates along with annual fees, which means you could spend hundreds annually for no reason. A simple, no-frills credit card might be the better choice.

As you compare credit cards, make a list of the different benefits offered by these cards. From here, pinpoint the benefits you’re likely to use. This side-by-side comparison can help you narrow down the card that’s right for your wallet.

Do you own a small business?

If you own a small business, have you ever considered getting a separate business credit card? Depending on the size of your business, it might be time to separate your business expenses from personal expenses.

Even if you’re an excellent record keeper, keeping track of business expenses can be challenging when using the same credit card for both types of purchases. If you’re a sole proprietor or a limited liability corporation (LLC), apply for a business credit card using your Social Security number.

Approval is based on your business income and your credit history, and you’ll need a strong personal score to qualify. So again, check your credit report and credit score beforehand. If you have a recent history of late payments, postpone applying for a business credit card until your payment history improves and you’re able to raise your credit score.

If your business is relatively new, you may not get approved for a business credit card at this time. Some banks require a two-year financial history. The credit card application will ask for the net profit of your business.

Keep in mind that your credit card issuer may initially assign a low credit limit. Use the card responsibly by paying your bills on time, and the bank may increase your credit limit over time.

General Credit Card Tips for Success

Now that you have an idea of the best credit cards based on usage, your credit history, and your individual needs, here’s a look at a few tips for researching and manage credit responsibly.

  • Compare rates and fees. Credit card rates and fees are not the same across the board. Once you determine which type of credit card is right for you, compare multiple cards within this category to find one with the lowest interest rate and the least amount of fees. These can include annual fees, foreign transaction fees, and balance transfer fees.
  • Make sure the bank reports to the credit bureaus. A credit card can build or reestablish your credit history. If you apply for a secured credit card or an unsecured credit card for bad credit, make sure the issuing bank reports to the credit bureaus on a regular basis. Regular reporting is crucial because positive activity can strengthen your credit score.
  • Pay bills on time every month. Make sure you pay your credit card statement on time every month. Set up reminders so that you don’t miss a due date or put your bills on auto pay. Missing a due date can result in a late fee and possible credit damage if payments become 30 days past due.
  • Pay balances in full. Never carry a balance from month-to-month. Only charge what you can afford to pay off, especially if you have a rewards credit card, use the credit card for everyday purchases, or have a credit card with a higher interest rate.
  • Maintain a good mixture of credit. There are no hard and fast rules regarding the number of credit accounts to have. But it is wise to maintain a healthy mixture of different types of credit. The types of accounts you have to make up about 10% of your credit score. If you have an installment loan and no credit cards (or only one credit card), consider adding a new credit card to diversify your credit file. Although a mix of credit is important, don’t apply for too many credit cards at once. This can lower your credit score.

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Conclusion

With hundreds of credit cards to choose from, selecting the right credit card can be challenging. Asking the right questions and fully understanding your options are keys to narrowing down your choices and finding the best credit card for your spending style.