By Trent Hamm
Credit cards are incredibly useful financial tools. They make shopping quick and easy. They offer rewards for the purchases you normally make. They improve your credit, which helps you obtain loans and a mortgage. They also enable you to pay for things without liquid cash on hand. Those are a lot of benefits in one small package.
However, not every credit card is right for everyone. Every person has a different story and different needs. Here are some ways to find a credit card that's right for your situation.
If you're recovering from a bad credit history, your best solution is to find a secured credit card.
With a secured credit card, you offer a deposit towards the credit limit, which provides the card issuer security. In the event that you don't pay your credit card bill again, the company simply taps your deposit in order to pay the bill (and usually cancels your card). On the bright side, it is a normal credit card, so it will begin the healing process of fixing your credit history.
Many credit unions offer secured cards, so if you're struggling to rebuild your credit, stop by your local credit union and discuss the secured credit card options.
If you often carry a balance on your credit card, you should focus on finding a card with a low ongoing interest rate.
%VIRTUAL-WSSCourseInline-884%A card with a low interest rate will result in lower bills with a smaller portion of your payment going toward interest. Of course, carrying a balance is never a good idea, and your best solution is to break free from that habit.
You can browse large collections of credit card offers on the websites of major credit card issuers such as Bank of America (BAC), Chase (JPM) and Citibank (C).
If you're carrying a large balance and are trying to pay it off, you should look for a card with a stellar balance transfer offer.
A balance transfer refers to an introductory offer granted by many credit card companies that allow you to transfer a balance from your old credit card to a new one, usually at a special low interest rate. Doing this can drastically cut your monthly payments and eliminate your interest on that debt, at least for a while. Balance transfer offers vary, so be sure to read all the details of the offer before signing up.
You can browse large collections of credit card offers on the websites of major credit card issuers. You may also want to stop by your local credit union and see if it provides any balance transfer offers.
If you frequently shop at one or two retailers, look for Visa (V) or Mastercard (MA) offers associated with those specific retailers.
Many retailers have partnered with Visa, Mastercard, American Express (AXP) or Discover (DFS) to offer credit cards that have rewards programs tied to shopping at that retailer. For example, Target (TGT) offers a branded Visa card that provides a 5 percent discount on all purchases, which can save a lot of money if you're a frequent Target shopper. The Amazon.com (AMZN) Visa offers 3 percent cash back on all Amazon purchases and 1 to 2 percent on all other purchases.
These cards differ from retailer-specific credit cards, which work only at that retailer and are generally a poor choice.
If you're a frequent shopper at a particular retailer, visit the website of that retailer and see what benefits it offers.
If you commute a long distance, consider applying for a Visa or Mastercard associated with a convenient gas station chain along your commute.
For example, the BP Visa offers a 25 cents a gallon rebate on gas you buy at BP (BP) stations. The Shell Visa earns 5 cents a gallon in flexible rewards, too. Almost every major gas station chain has some offer that provides significant rewards for buying gas -- and if you're a commuter, that can add up to a lot of savings.
In the end, everyone has different needs. While this list doesn't come close to tackling the specific needs of everyone, it does offer many avenues for finding a credit card that fits with your daily expenses.
Trent Hamm is the founder of the personal finance website TheSimpleDollar.com, which provides consumers with resources and tools to make informed financial decisions.