Consumers Want More Help Finding the Right Credit Card but Also Need Help Managing Debt

by Sandra Bernardo 0

As consumers gear up for back to school spending and, soon, holiday shopping, they’re often looking for the “perfect” credit card to match their needs. Want cash back? Hoping to travel with reward points? Unfortunately, a national survey by Experian found that consumers are overwhelmed by many credit card offers and find it difficult to select the right card.

 

What do consumers want in a credit card?  This is what the survey respondents said:

 

Fifty-four percent of survey respondents want no annual fee, while 45 percent want a rewards program.

Among the top rewards, almost 90 percent prefer cash back and 74 percent prefer gas rewards.

More than at third of those surveyed say credit cards can better meet their needs by having lower interest rates.

Sixty-nine percent of survey respondents wish they knew in advance if they would be approved before applying.

 

More than half of the respondents also said they are not satisfied with their current cards, so it’s no surprise that one in three will continue searching for a better one. To begin your search, identify what card feature is most important to you, such as a low annual percentage rate (APR) or no annual fee. Also, check your credit score because that will help you to understand what cards you may qualify for since a credit score is one of the factors lenders use to extend lines of credit. There are several sources available today where you can obtain a credit score for free. Once you have determined what your ideal card looks like, browse an online credit card marketplace that recommends cards based on your preferences.

 

You should be careful though – opening up several new cards in a short time span may lower your credit score. Opening too much credit at once can hurt your chances for additional credit in the future, when you may really need it for a big expense such as a car loan.

 

Too much access to credit can also lead you down the path of too much debt. This seems to be a nationwide problem; recently the Federal Reserve released updated data showing that the amount of credit Americans owe hit a new high at approximately $1 trillion.

 

If you have debt and are struggling to pay it off, don’t despair. You can start tackling it today with a few steps:

Figure out how much you owe by making a list of all of your credit card balances and loans along with minimum monthly payments and annual percentage rate (APR) for each.

Asses the best approach whether it is paying off the card with the highest APR first or making payments on all cards with the goal of applying any extra money you have available to pay the lowest balance first.

Consider applying for a balance transfer card with no or low APR for a set period of time to transfer the debt.

 

Credit is a useful tool for a large expense like your dream home or to cover unexpected expenses such as a medical emergency, but it must be managed wisely. Take your time in reviewing the best card options that fit your needs so you maximize the benefits of using the card, and take even more time managing your spending.

FICO infographic