Ask An Advisor: Which Credit Card Is Best?

Detail of  "Credit River panorama, at Creditview Road in Mississauga, Ontario, Canada" by Ian Muttoo via Wikimedia Commons used under Creative Commons Attribution-Share Alike 2.0 Generic.

Dear Abigail,

My daughter plans to apply for a credit card.  Which one should she get?

– Client

Dear Client,

Good question!  There are thousands of varieties of credit card available in a rainbow of colors and “metals” (even platinum!)  So, I don’t have the name of a card I’d recommend right off the top of my head.  I do, however, have a method I use for finding a good credit card.  I just work down these easy steps until I find one that matches what I’m looking for:

  1. Check local credit unions.  Credit unions frequently have exceptional deals on banking costs across the board.  Their car and credit card loan rates are generally very low, their checking and saving account rates are generally higher than average, and their service is usually top-notch.  I would suggest that your daughter look online for local credit union, and then visit them in person.  I would also remind her that credit unions require membership to join, and that she needs to meet the membership requirements.  I’ve seen requirements be very strict, or as loose as “be a resident of the state,” so she may have to try a couple before she finds one she likes.  If that doesn’t work, then I suggest she…
  2. Check local banks.  Sometimes small, local banks have good deals, too.  They have to compete with credit unions (which are not-for-profit) and the bigger regional and national banks (which are very much for-profit.)  Unless you have a specific need for a national bank that can’t be met by a smaller institution, I’d suggest the smaller bank.  I use a small bank that only serves Little Rock, and have been very pleased so far.  If you still aren’t finding what you need (seriously?), then you could also…
  3. Search a national database of credit cards.  If you go to Bankrate.com, you can find a handy credit card comparison tool that will help you filter card offers by the type of card, rates, fees and other terms.  The cards are pretty competitive amongst themselves, but I’ve reliably found better deals with local establishments.  This would be the last good place I’d look.

I’d also suggest you take the time to talk to your daughter about the risks of using credit cards, and the importance of paying them on time and paying down the balance quickly.  They’re a financial tool that has backfired for many, many users.  You don’t want her to be one of those unfortunate people.

– Abigail

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