Compare Credit Cards

Finding the right credit card can be stressful, with so many offers to consider and so much jargon and fine print to decipher. But as long as you follow these simple pointers, you’ll be fine.

1. Compare credit cards before applying. Otherwise, there’s no way of telling whether you’re getting the best deal. Marketing can be deceiving, after all. 
2. Make sure your credit is match. You should only consider applying for a credit card if it matches your credit standing. For example, don’t apply for an excellent-credit credit card if you have fair credit. Getting turned down will only make it harder to get approved the second time around.
3. Don’t apply in bulk. You should not submit more than a couple credit card applications within a short period of time, as this can lead to a roughly six-month dip in your credit score.

For more tips, check out WalletHub’s guide on finding the right type of credit card for your needs. And for your convenience, here are some benchmarks to consider as you wade your way through the credit card comparison process:

Market Snapshot: 1,000+ Credit Card Offers

You can learn more about the average terms offered by credit cards in popular categories from WalletHub’s latest Credit Card Landscape Report. 

It can take anywhere from less than a minute to a few weeks to get approved for a credit card. The amount of time depends on how you apply, how good your credit is relative to the requirements of the card, and whether the issuer can immediately verify your information. You could be instantly approved if you apply online and are obviously qualified. But if you don’t get instant approval, it’ll typically take at least 7-10 business days to hear back.

Here’s what affects how long it takes to get approved for a credit card:

• The way you apply. You can apply for most credit cards by mail, by phone or online. If you apply by mail, that’s going to add an extra 1-7 days just for your application to get there. The other two methods both allow for instant approval.
• Your credit and income. No credit card guarantees instant approval. You’ll only get it if you exceed the issuer’s credit, income and other requirements. If you’re right on the border of qualifying, the issuer will probably take longer to consider your application. The typical wait time is 7-10 business days, which translates to around two weeks.
• Your personal info. You’ll need to enter details like your name, date of birth, address and Social Security number when you apply for any card. That information also is present on your credit reports, which the issuer will check during the approval process. If the information on your application doesn’t match the information on your report, or if it gets flagged as fraudulent, it will hold up the process until the issuer can verify your identity.

So the standard timeframe in which you can expect to be approved for a credit card and receive it by mail is approximately 3-4 weeks. If you’re not approved instantly, count on 7-10 business days for approval and 7-10 business days for delivery. And if you’re itching to get your card faster, don’t forget to ask the issuer about expedited delivery.

There are many advantages and disadvantages of credit cards, but the advantages largely outweigh the disadvantages because bad outcomes are easily avoidable. Credit cards are a convenient way to build credit, finance purchases, convert currency and more. But they can also lead to expensive debt if used irresponsibly, and that could lead to costly credit score damage. There are plenty of other good and bad things to be said about credit cards when you really put them under the microscope. So let’s dive into some of the biggest pros and cons.

Here are the biggest advantages of credit cards:

• Credit building. Credit card issuers report your account details (utilization, payment, etc.) to major credit bureaus every month. This gives you a regular opportunity to add positive information to your credit reports, which will improve your credit standing. You can even benefit simply by opening a credit card and locking it in a drawer.
  Having a positive credit history will make a lot of your biggest decisions in life go smoother. You’ll more easily be able to purchase a car or a home, and you may even have better employment chances.
• Convenience. If you have a credit card, you don’t need to worry about carrying lots of cash at all times. Most merchants accept credit cards. And unlike cash, credit cards are easily replaceable and give you a $0 liability guarantee for fraudulent transactions. They also allow you to make purchases now and pay later.  
• Rewards. Credit cards often reward you for buying things by giving you cash back, miles or points. This can lead to savings on trips, merchandise, gift cards or your credit card bill in the future.
• Benefits. Credit cards usually come with some benefits built into them for no extra cost. For example, you might get insurance for car rentals and accidents while traveling. You might get purchase protection to replace damaged or stolen items you bought with your card. And your purchases could receive extended warranties, among other perks that vary card to card.
• Currency conversion. Using a credit card is the cheapest way to convert your money from U.S. Dollars to another currency. Just make sure the card you use has no foreign transaction fee.

Here are the biggest disadvantages of credit cards:

• Easy to overspend. Since you’re not using physical money or a checkbook and don’t have to pay right away, credit card purchases may not feel quite as expensive when you make them. So it’s easy for balances to get away from you if you’re not careful. One of the best ways to avoid overspending with a credit card is to use the Island Approach. That means using one credit card for nothing but everyday purchases that you should be able to pay off by the due date every month. If interest charges ever show up on that account, it will mean you’ve been overspending.
  If you have a credit card balance that you’re carrying from month to month, or you’re planning to make a purchase that will lead to one, you should use a separate card for that. This will help you get the best collection of credit card terms, save more money and avoid spending too much. Making a budget and tracking your spending to keep yourself honest is a wise idea, too.
• High interest rates. If you don’t pay your balance in full by the due date, you will have to pay interest to the credit card company. And those interest charges will accrue at a very high rate. The average interest rate for all new credit card offers is 18.78%. The more interest charges you rack up, the higher your minimum monthly bill payments will be. And missed payments can lead to even more costly penalty rates as well as credit score damage.
• Fraud. Fraudsters couldsteal your credit card number and make purchases in your name. But so long as you report any such transactions, you won’t have to pay for them.
• Confusing terms. Credit card terms and conditions aren’t always the easiest to understand. In some cases, people end up being surprised by certain interest rates, charges or limits because the credit card company presented them in a confusing manner.
  The best way to avoid such a fate is to do your research when choosing an account. Focus on the types of things that are likely to affect you most, based on how you plan to use the card. WalletHub has also done lots of research on the credit card market, including a complete breakdown of the various benefits each major credit card issuer offers with its cards. Hopefully, that will help you better understand what you’re getting into.
• Multiple ways to hurt your credit. It’s not just missing payments that will hurt you. Applying for a card causes your score to dip temporarily, and using over 30% of your credit line is also bad for your credit. But setting up automatic monthly payments from a bank account, not applying for a new account in the months leading up to mortgage shopping, and either spending less or paying your bill more should help you avoid negative outcomes.

You should get a credit card. It will make everyday spending more convenient and can help you improve your credit standing. But at the same time, you should be aware of the drawbacks and sure to protect yourself. As long as you spend reasonably, pay off your purchases, check your credit report and score often and keep your utilization at a good level, you should benefit greatly.

An APR on a credit card basically shows how much interest a balance will accrue over the course of a year. For example, a $1,000 balance on a card with a 25% APR would grow to about $1,250 in 12 months.

The APR on a credit card is not its interest rate, however. When you carry a balance from month to month, interest is assessed on a daily basis. A credit card’s interest rate is therefore its APR divided by 365 (days in a year). So a card with a 25% APR charges interest at a 0.068% daily rate. Furthermore, given that interest charges from one day become part of the balance accruing interest the next day, your effective APR (EAPR) will always be a bit higher than the advertised, or nominal, APR. For example, the effective APR on a card with a 25% nominal APR would be about 28.39%.

You can read more about credit card APRs and how interest works from WalletHub’s guides on the topics.

There is no right answer for how many credit cards you should have or how many credit cards is too many. The specifics differ from person to person, depending on how well an individual can manage one credit card, then two credit cards, and so on. So while three credit cards could be too many for one person, someone else might be able to comfortably manage seven. But that’s about where most people draw the line. The average adult has 5.6 credit cards, including 3.1 cards that can be used anywhere and 2.5 store cards. 

Having several credit cards can help you save more money by allowing you to get the best collection of rates and rewards for your biggest transactions. And it can help your credit score if you keep your utilization low and your payments on time. But what you should watch out for is applying for too many cards too quickly. It’s best to not apply for more than one per year, or six months, as each application puts a hard inquiry on your credit report and temporarily hurts your score. 

Here’s what determines if you have too many credit cards:

• Your credit report and score. If you have a history of financial mistakes, such as missed payments or worse, you should be careful about overdoing it. Besides, it may be hard to get too many cards worth having if you have damaged credit. 
• Your utilization and payment history. You don’t want to rack up more debt than you can comfortably afford to pay, or you risk carrying large balances and wasting lots of money on interest. And if you’re maxing out all the cards you have, credit card companies probably won’t want to give you additional spending power. 
• Company rules. Some issuers have unofficial rules regarding how many credit cards is too many for an applicant to have and still get approved for a new one. This could be an overall card limit or based on how many existing accounts you have with the issuer you’re seeking a new card from. There are lots of rumors floating around that Chase does this, for example.
• You’re having trouble keeping track. Even if your credit is good and you’ve been keeping your payments current, at some point it may be hard to manage all your open accounts. 

While we can’t tell you for sure how many credit cards you should have, the more data that’s at your disposal, the easier it will be to make that decision. WalletHub can help with free daily credit score updates and personalized credit-improvement advice.