Picking credit card options can be tough

If finding the right credit card feels like a daunting task, you’re not alone.

With options ranging from travel rewards to cash back and sign-on bonuses, there are many options, but not all are the right choice for you.

Nick Clements, co-founder of MagnifyMoney.com, said the question isn’t what the best credit card is, but what the best credit card is for the consumer and what he or she plans to use it for.

Clements, who worked in consumer banking for most of his career, said consumers should start by asking themselves two things: Are you using the card to borrow money? Or are you using the card to optimize travel or cash-back rewards?

Borrowing on card

“If you need the card to borrow, I put borrowing into two simple categories: 1. You’ve already got debt, or 2. You need to make a purchase and know you need to finance that purchase,” Clements said.

» Those trying to pay off debt: For those who already have debt and need to pay it off quickly, Clements recommends looking for a balance transfer credit card deal that has no transfer fee and low to zero interest.

“A famous one out there is Chase Slate, which has no balance transfer fee and no interest for 15 months,” he says. “If you have $2,000 to $3,000 in debt, move it to Chase Slate, and if you pay it off in 15 months, there is no annual fee, no interest and no transfer fee.”

He said other options include a credit union with no fee and no interest, but you have to make sure you pay it off before the interest hits.

» You want to make a big purchase and need to finance it: If your water heater breaks or you’re slammed with an expensive purchase you can’t afford, be wary of financing anything at the checkout counter, Clements says.

When the hardware store offers you a card with 0 percent on your purchase for 12 months, don’t skip the fine print, Clements said.

“Most retail offerings have what’s called deferred interest, so if they give you 0 percent for nine to 12 months, and if you don’t pay off at the end of that time, you get hit with interest retroactively from the date of the purchase,” he said. And that can be a lot of money.

He points to credit cards that offer 0 percent interest on purchases for a set period of time and no retroactive interest if you don’t pay off the entire purchase by the end of that period, such as the introductory offer from the CITI Simplicity card.

“I have a general rule, which is if someone is selling me a credit product at the end of a purchase journey, I am probably getting a bad deal,” he said. “You can get much better deals if you do your homework in advance.”

Now the fun stuff

Clements said whether it’s cash back or rewards when you use your credit card at a store, the merchant pays an “interchange or merchant fee” to the credit card issuer. He said consumers’ goal should be “to get as much back as possible of that.”

First ask yourself whether travel is a big part of your life or if you are mostly spending on groceries, gas and taking small trips. If you’re the latter, the cash back may be your best bet, he said.

Cash back

For those looking for cash-back deals, Clements pointed to CITI Double Cash and Fidelity Rewards Visa. The CITI card offers 1 percent when you make a purchase and 1percent when you pay your bill, while Fidelity offers 2 percent cash back on all purchases.

The only catch? You have to pay your statement in full and on time each month.

Clements said for families who are spending a great deal on groceries, the American Express Blue Cash Preferred card may be a good option. There is a $95 fee, but 6 percent on grocery purchases up to $6,000. He said for those who are extremely disciplined, an option could be to use the American Express Blue Cash Preferred for all groceries and then CITI Double Cash for all other purchases.

Travel rewards

Clements said for those with a travel itch, the Chase Sapphire Preferred Card can get consumers two points for every dollar spent in restaurants and on travel.

Card holders can redeem the points for travel in the Chase portal.

Airline travel credit cards

Clement said if you are dedicated to a particular airline like Delta or American Airlines, an airline credit card might work for you. He points to those who do a lot of traveling with a particular airline and would like to increase their miles.

“If you know during the year you’ll earn 70,000 flying for business, and at 100,000 you get a better flight, an airline credit card is a good way to top up,” he said.

The other people the card could benefit are those who fly Delta or American Airlines often enough that the perks of having an airline card, like priority boarding or additional checked bag waivers, may negate the annual fee.