Money Monday: 5 Steps to Selecting the Right Credit Card

Selecting the right card for your financial situation.

After a fairly lengthy dry spell, credit card offers are popping up again in mailboxes, on television and via email. Before you jump at the first “You’re Approved!” message that comes your way, consider these five steps to selecting the best possible card for your personal financial situation:

Know your credit score. Credit card issuers use a scale of 640 (any lower would be considered “poor credit”) to 750+ (excellent credit) when determining interest rates and terms on their cards. Educate yourself before filling out your application by pulling a copy of your credit report for free at The site is run by the three largest credit reporting agencies in the U.S. and offers free annual credit reports, as required by federal law.

Comparison shop online. The Internet has put the shopping power in the consumers’ hands when it comes to credit cards. Sites like, WOW! and feature “find a credit card” options that allow you to select specific criteria (rewards cards, student credit cards, low-interest credit cards, and so forth) and view a list of the best options. The sites also feature educational tools for consumers that want information on topics like debt payoff, balance transfers and credit reports.   

Know the differences among cards. Not all credit cards are the same. Retail cards are issued by retail stores; premium cards offer high credit limits and typically come with perks like travel insurance and/or emergency roadside services; secured cards require a cash security deposit. Before you make your selection, be sure that you’re picking the card that best suits your needs and lifestyle.

Pick your rewards program. Many of today’s cards are tied to points, airline miles and cash back offers earned by cardholders as they spend. The rewards can be redeemed for merchandise, gift cards and other perks. Be sure to read the fine print when selecting your card and the associated rewards program. Wells Fargo, for example, offers a Cash Back Card that allows customers to earn 3 percent cash back on gas, grocery and drugstore net purchases (defined as purchases minus returns/credits) and 1 percent cash back on all other net purchases with no annual card fee. Be sure to read the fine print when selecting your card and the associated rewards program.

How do you plan to use your card? If you pay off your balance every 30 days, look for an offer with no annual fee and a longer grace period (so you don’t have to pay finance charges if you are a day or two late with your payment). If you will be maintaining a balance on your card, find one with the lowest possible interest rate. If your card usage will be high (for monthly expenses and groceries, for example), find one that features a high credit limit and a good rewards program. If you’re only using it for emergencies, then a card with a low interest rate, low fees and low credit limit should do the trick.

As with any financial decision, be sure to read all of the fine print on your credit agreement before using your card and keep an eye on your monthly statements and any updates to your agreements. Learn more about credit card usage and fraud at the Federal Trade Commission's Credit & Loan page here.

For additional information on using credit responsibly, visit the Wells Fargo Smarter Credit Center.


This article has been prepared for informational purposes only. The accuracy and completeness of this information is not guaranteed and is subject to change. Since each individual’s financial situation is unique, you need to review your financial objectives to determine which approaches might work best for you.


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