There’s no such thing as a “perfect” or “best” credit card. Yet there may be a credit card offer that’s a better fit for you compared to other available options.

If you’re in the market for a new credit card, it’s important not to rush the process. Instead, consider the following five details as you narrow down your options and choose the next credit card application you want to submit, from myFICO.

For more loan and credit education, visit myFICO’s blog at https://www.myfico.com/credit-education/blog

1. FICO® Scores and Credit History

One of the first details you should consider when you’re ready to pick out a new credit card is the condition of your credit. When you apply for a credit card, the lender will typically review your credit report from one or more of the major credit bureaus—Equifax, TransUnion, or Experian. (Note: This type of credit check is typically a hard inquiry which has the potential to reduce a FICO® Score by several points.) The lender will likely analyze your FICO Score as part of your credit card application as well.

Your FICO® Scores are based on the information in your credit reports. These details help the card issuer understand how you’ve managed credit in the past and determine how likely you are to repay the money you borrow in the future as promised.

Because your FICO® Scores and credit reports generally play a role in your ability to qualify for a new credit card (and your borrowing terms), it’s wise to review your credit details yourself before you apply for a new account. You can access to your FICO® Scores online via myFICO.com. And you can get free copies of each of your three credit reports online as well from AnnualCreditReport.com.

2. Card Issuer’s Qualification Requirements

The next detail to consider is the types of credit cards you’re likely to qualify for based on the condition of your credit reports and FICO® Score. If you have an exceptional FICO Score, you’ll probably have an easier time qualifying for credit cards and other types of financing. A poor FICO Score, on the other hand, could limit your options and you might need to focus on repairing your credit.

Some card issuers may share their basic qualification credit requirements for different credit card products prior to the application process. For example, while you might not know the exact FICO® Score you need to qualify for a credit card from (hypothetical) XYZ Bank, the bank may disclose that applicants need a “good” FICO Score or better to be eligible for the account.

Most credit scores have a 300-850 score range. A higher score indicates a lower credit risk to lenders while a lower score signals the opposite. Typically, if you have a FICO® Score of 670-739, a lender will consider you to have “good” credit.

Each lenders sets its own qualification criteria when it comes to credit card qualification requirements. Below is a general overview of how what the different FICO® Score ranges may tell a lender about your credit risk level.

Of course, credit history and credit scores, like FICO® Scores, are not the only factors that lenders consider when they evaluate new applicants. Other details on your application may impact your ability to qualify for a new credit card as well, such as your income, debt levels, number of recent credit card applications, and more.

3. Annual Fee

Another detail to consider when you’re choosing a new credit card is whether the credit card company charges an annual fee. An annual fee doesn’t have to discourage you from opening a new account. Yet it is important to confirm that a credit card offers enough value to justify the cost of its annual fee before you open this type of account.

Let’s say you’re thinking about applying for a rewards credit card that charges a $300 annual fee. However, the card features a $300 annual hotel credit that you know you’ll use each year. In addition to the annual credit, there are other benefits on the card that will offer you far more value than you pay out in the form of an annual fee to the card issuer. In this scenario, applying for the credit card could be a great deal.

On the other hand, some annual fee credit cards may come with benefits that don’t appeal to you. A monthly credit to a popular gym doesn’t make much sense, for example, if there are no facilities in your area. If you don’t believe you’ll get enough value out of a credit card to offset the cost of its annual fee, it may be better to look for an alternative.

It’s also worth noting that some annual fee credit cards may feature lower interest rates compared to no-annual fee cards. But it’s important to calculate the cost and make sure the annual fee is worth securing a lower interest rate on your account. Plus, if you always pay off your statement balance each month, you can typically avoid paying interest on new purchases.

4. Annual Percentage Rate (APR)

It’s also wise to review the annual percentage rate (APR) that a credit card company offers before you apply for a new account. If you ever carry a balance on your credit card from one month to the next, the APR on your account could have a meaningful impact on the amount of interest you pay.

Of course, the best way to manage a credit card account is to always pay your full balance off each month. This good habit usually helps you avoid paying interest on your account. It may also help you maintain a low credit utilization ratio which could be good for your FICO® Scores. (Note: If you’ve ever heard you need to carry a balance on your credit card to improve your FICO Scores, that’s a myth.)

5. Benefits and Rewards

Perhaps the most exciting details to consider when picking out a new credit card are the benefits and rewards that different accounts have to offer. In addition to credit-building potential (when managed responsibly, of course), many credit cards feature the opportunity to earn cash back, points, or miles on your everyday purchases.

Some credit cards also offer bonus category rewards—higher rewards or cash back rates when you make certain types of purchases on your credit cards. For example, a travel rewards credit card might offer you 2x, 3x, or even higher rewards when you use your account to make eligible travel-related purchases. Other credit cards may offer higher rewards on dining purchases, gas purchases, or grocery purchases. If you’re strategic, you can align these types of rewards credit cards with your spending habits, and potentially earn more points, miles, or cash back.

In addition to rewards, many credit cards feature other valuable benefits. Annual travel credits, free airport lounge access, cell phone protection, free checked bag fees on certain airlines, and rental car insurance are a few examples of perks that some credit cards may offer.

Bottom Line

Trying to find the right credit card may sometimes feel overwhelming. Yet there are many solid options available.

Once you understand where your credit stands, take the time to compare competing offers from multiple credit card issuers. As you review available offers and the features those credit cards have to offer, you can find the best solution for your situation—before you start filling out any applications.

About myFICO

Get your FICO® Score from the people that make the FICO Scores, for free. Plus, free Equifax credit monitoring and a free Equifax credit report every month. No credit card required. For more information, visit https://www.myfico.com/products/fico-free-plan-a

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