How to Choose a Credit Card: Insight from Consumers, Experts, and a Credit Card Company

As of November 2019, there were 374 million open credit card accounts in the United States, with approximately 70 percent of the population carrying at least one card.

That’s a lot of credit cards.

How do millions of consumers know which card to choose? It’s not like there’s a “one-size-fits-all” when it comes to credit cards. In fact, there are so many options out there that there might be multiple options that could work for you. So how do you narrow it down?

Have no fear. To help you choose a credit card, we took a look at what consumers want in a credit card and card issuers in particular, in addition to consulting industry experts and a credit card company, to get a bigger picture of how to narrow down the search and pick the best credit card. 

Let’s dive in!

What consumers say

What the experts say

What a credit card company has to say

We wanted to know what consumers felt was most important when looking for a credit card; so we took a look at some reviews to see what consumers mentioned most often. The top five factors mentioned by consumers include customer service, rewards, interest rates, wide acceptance of cards, and card security and protection. Other factors mentioned include fees, company trustworthiness, and credit limits.

Customer service

Rewards

Interest rates

Wide acceptance

Security and protection

*This data, and all subsequent findings, are from a sample of 600 credit card company reviews on BestCompany.com.

Customer service

Approximately 35 percent of consumers mentioned customer service in their review. On BestCompany.com, we specifically ask consumers to rank their experience with customer service; but it is interesting that consumers consistently commented on their customer service experiences - good or bad - in their written review.

This suggests that consumers are concerned about the company that they will be working with, and not just rates, rewards, and fees - very important factors to consider when looking for a credit card.

From our sample of reviews, the top mentioned companies for great customer service are Capital One, American Express, and Chase.

Rewards

After customer service, consumers mention rewards more than other factors. 

A rewards credit card is a great perk, allowing consumers to generate cash back, points, or miles the more they use their card. Many consumers mention cash back rewards, suggesting that this is the most popular reward option to look into as it is a great option for most everyday purchases. If you travel often, a travel rewards card or a hotel rewards card could be a great option for you, although a cash back card could still be used if you don't want to deal with travel rewards programs. But the best option for your wallet depends on your preferences and lifestyle. 

"I always get right through to a real person when I call in. Their vacation protection, price drop protection, and extended warranties have all saved me money and been pretty painless experiences. Ultimate rewards is also a really seamless experience that provides tremendous value when transferring to travel partners."

— Andrew, Chase credit card review, July 8, 2020

From our sample of reviews, the top mentioned companies for rewards are Chase, Discover, and American Express.

Interest rates

Consumer reviews mention interest rates more than not, which is indicative that this is an important factor to consumers.

With any type of borrowed money, it is a common practice to try to get the lowest rates possible as this can save you more money in the long run, although it isn't necessarily common to get the lowest rate available. It is important to keep in mind that your credit history, income, debts and history with the company are often deciding factors in the interest rate you will receive.

"Discover card has excellent customer service, competitive interest rates and no annual fee. I have had my Discover card for many years and have never had any problems with it."

— Beverly, Discover credit card review, February 5, 2020

It is important to note that most reviews comment on how interest rates are high, no matter which credit card issuer they are using (although most lenders offer a variety of cards with varying rates, so this may not be an accurate representation), as credit card interest is generally higher than other borrowing methods. But, from our sample of reviews the top mentioned companies for competitive interest rates are Discover, Visa, and Capital One*.

*Interest rates are contingent upon your credit score and financial background. Thus, if you have a low credit score, you will likely receive higher interest rates on your credit card.

Wide acceptance

Another important credit card factor for consumers is where the card is accepted. For the majority of consumers, it is important to them that their card is accepted anywhere, even globally.

"Love that Visa is accepted pretty much anywhere. Trustworthy company, very convenient, and like the perks."

— Lacey, Visa credit card review, February 22, 2020

From our sample of reviews, the top mentioned company for wide credit card acceptance is Visa.

Security and protection

Another factor frequently mentioned by consumers in their credit card reviews is security and protection. Consumers want to ensure that their information is safe and that there are protections in place against credit card fraud.

It is important to research what security credit card companies have in place to protect against credit card fraud, as it has risen 161 percent since 2015, with 45,120 cases reported in the first quarter of 2020.

From our sample of reviews, the top mentioned companies for positive card security and protection experiences are Capital One, Visa, and American Express.

Choosing a credit card can be a challenging and time consuming process. Especially for first-time borrowers, it can be difficult to know what's important when looking for a credit card and how different cards compare to others.

We asked some experts what they suggested when looking for a credit card, outlining some helpful tips and insights to make the process easier.

Look at your lifestyle

Pay off existing credit card debt

Consider fees, rates, and credit limits

Choose Your Rewards

Look at your lifestyle

Before you even begin to look at different credit card options, it is important to take some time to first consider your lifestyle and what you'd be using your credit card for. This will not only help narrow down your search, but it can also help you determine what kind of rewards would be best suited for you.

John Davis, founder of ScoreSense, expands on this point: “The first step to choosing the right reward card for you is to look at your lifestyle, or more specifically, your spending habits. Categorize your monthly spending over a year, then compare to the rewards or rotating rewards according to your monthly spending forecast.”

Another important aspect of reflecting on your lifestyle is considering your credit score and finances, two factors that pull heavy weight on what interest rate and credit limit you could receive on a credit card. For example, if you have bad credit and want to build your credit, you could look into getting a secured credit card, or if you are in college you could look into getting a student credit card. Choosing the right card based on your needs and financial background is important because it could save you money on interest, and save you from greater stress in the future.

Pay off existing credit card debt

If you're looking for your first credit card, this won't be a relevant step for you. But, if you are a consumer looking for a new or additional rewards credit card to add to your wallet, it could be in your best interest to take a look at your existing credit cards and to see if you have any outstanding debt to payoff.

“Pay off any credit card debt before you worry about rewards. If you are carrying a balance on any credit cards, you should pay those off first or focus on low interest-rate credit cards,” says Erik Budde, founder of GigaPoints, a data-driven credit card comparison tool. “Any rewards you earn will pale in comparison to the interest that you may be paying.”

Consider fees, rates, and credit limits

An important step in choosing a credit card is to consider and compare fees and rates various credit cards. Take the time to assess your lifestyle and how you'd use a credit card as these factors affect your decision, especially in terms of interest rates.

Nishank Khanna, CFO of Clarify Capital speaks to this point: “If you’re apt to carry a balance, interest rates might be important. If you’re likely to use your card as a substitute for debit and you plan to pay your balance off regularly — interest should be a moot point. Instead, focus on high-value rewards that can subsidize your interests and offer benefits that make sense for your lifestyle.”

In addition to interest rates, it's important to consider the fees applied to some credit cards: annual fees, late payment fees, cash advance fees, balance transfer fees, foreign transaction fees, etc. You may find a great rate with a certain type of card, but could then get hit with large fees, so do your homework.

The credit limit you receive on a credit card is dependent upon your credit score and finances, as well as the card issuer, but some cards offer much higher limits than others. If you know what you'll be using the card for, it will be much easier to gauge the credit limit you'll need. It is important to note that you won't likely be able to determine and/or compare credit limits upfront.

Choose your rewards

In general, there are two types of credit card rewards programs: a card issuer programs, offering cash back or points, and travel rewards programs, offering miles or points. Cash back rewards earn you a certain cash amount on eligible purchases, which can save you some money in the long run. Point rewards, on the other hand, give you a certain number of points per dollar spent. These points are most often redeemed for travel costs, such as airline tickets or hotels, which can also be redeemed through travel miles.

We connected with Meera Sridharan, vice president of rewards and product strategy at Discover, to ask some questions about how to choose a credit card, especially for first-time borrowers.

Q. What things are important for consumers to consider when looking for a credit card? What should they be looking for in a credit card?

A. Consumers should consider looking for credit cards that offer flexible rewards that fit their lifestyle and spending habits. All Discover credit cards offer the ability to earn cash back rewards on every purchase, and for first-year card members we automatically match all the cash back you’ve earned at the end of your first year.

Beyond rewards, consumers should also consider whether there is an annual fee and if the credit card offers complimentary benefits. For example, Discover provides a robust suite of free benefits, all at no annual fee on any card, including Credit Scorecard, which shows your FICO credit score, Freeze it, an account on/off switch to prevent new purchases in seconds, and Social Security number, Inquiry and New Account Alerts, which can help you protect yourself from identity fraud.

Q. For first-time borrowers, what are the best rewards to consider?

A. First-time credit card holders should look for cards that offer rewards that fit their lifestyle and spending habits.

Q. When should a consumer start looking into getting a credit card — in college, after college, etc.?

A. Getting a credit card while in college can aid in establishing a credit history. Building good credit while in school can help you down the road when you’re looking to buy a car, house, or qualify for other credit products.

Q. What is the best Discover credit card for first-time borrowers?

A. We have several different cards for first-time credit card holders and each provides the ability to earn cash back rewards on every purchase while building your credit history.

Q. What is the process to apply for a Discover credit card?

A. When applying for a Discover credit card, you’ll need to be at least 18 years of age, have a Social Security number, U.S. address and U.S. bank account, and provide all the required information in the online application. Applications are taken 24/7 on Discover.com.

Learn more about Discover's credit card options.

The final word

Choosing a credit card can feel daunting, but it doesn't have to be. Hopefully these insights can help ease some stress.

Good luck in your journey to choosing the right credit card for you!