Credit cards can help you do more than just shop online or check out quickly at a store. They can be your safety net if you’re traveling and get stuck somewhere overnight. They can help you pay for car repairs if your check hasn’t arrived yet. They can even help you build your credit so that you can gain access to additional financing options in the future.

But how do you know if a credit card is right for your situation, or which one you should choose? Asking yourself the 11 questions below can give you a better idea.

1. Why do I need a credit card?

Consider your current situation and your expenses. Write down a list of pros and cons of how a personal credit card could help. Then compare this list to the pros and cons of using a debit card, cash, or other options. By doing this, you’ll be able to determine if a credit card meets your needs.

2. Can I get a credit card that meets my needs with my credit score?

For those with lower credit scores, you may not get the same features and benefits as someone who has built their credit history over many years. By looking at what perks matter to you, from cash back to travel points, as well as what cards you may be approved for based on your score, you can have a better idea of whether a credit card may meet your needs.

3. Will my credit card impact my credit score?

Yes, a credit card can impact your credit score in the following ways:

  • If you are unable to make monthly payments, this could hurt your score
  • The length of time that you’ve had a credit card can factor into your score
  • Having a hard inquiry done before getting accepted for a credit card can temporarily impact your score
  • Having multiple credit cards or lines of credit, also known as a credit mix, can factor into your score as well
  • A high credit utilization ratio can have a negative impact on your score, this means coming close to maxing out your available credit
  • Paying your credit card bill on time or consistently paying down its balance can help to improve your credit score

4. How can I avoid unnecessary fees and costs?

To avoid high fees and costs, you’ll want to read the terms and conditions of the credit card when you sign up. Check the APR (annual percentage rate) to see if it is fixed or variable. The latter may involve increases over time. Next, check for an annual fee. Another item to consider is that some cards charge fees on international purchases, including when you travel or if you make a purchase from a store or website overseas. These can add up, as well as fees for cash advances.

By carefully reviewing the terms and conditions, you can potentially avoid surprises and unnecessary fees.

5. How much credit do I need?

To determine how much credit you may need out of a credit card, consider taking these steps:

  1. Calculate the expected fixed costs you will use the credit card for
  2. Add in padding for unexpected costs and emergencies
  3. Determine the maximum amount you may need on a monthly basis in the event of job loss

By taking these three items into account, you can calculate the maximum and minimum line of credit you’ll want to take.

6. Can I afford the monthly payments?

To calculate whether you’ll be able to afford monthly payments, look at the maximum line of credit and the APR after the introductory period. From there, divide the amount by the payback period and installment cycles. If this maximum number falls within your range, you can likely afford the credit card you’re looking to get.

7. Does this card have the perks I want?

Choosing the right perks can be the deciding factor when you’re looking at two or three similar credit cards. Think about what you’ll want to do this year and even three to five years from now.

If you currently just want to save money or treat yourself to something every once in a while, consider a cash back credit card that lets you earn while you spend. Do you have travel aspirations? If so, consider credit cards with travel perks. Travel perks can include points for airlines as well as upgraded status with car rentals, cabins, and lounges at airports.

At BHG Money, we offer a full suite of credit card solutions for all your personal needs—with premium benefits from a low APR to multiple cash back rewards options.1

8. Will my purchases be protected?

Some payment services do not offer protection if the goods or services you purchase are not delivered. On the other hand, credit cards may hold the payment in escrow and can potentially return your funds if this happens. Keep in mind that this is case-by-case and may require further proof.

9. Can my balance be recovered if my card is stolen?

If someone steals your credit card, uses it, and you catch it in time, you may be able to put a stop on the payments and get all your money back. Contact your credit card provider if this happens to begin the process as soon as possible.

BHG Money’s suite of credit cards each comes with Zero Liability Protection, which means you’re not held responsible if there are unauthorized transactions on your account. Each card also comes with a second layer of security, Mastercard ID Theft Protection. This alerts you in the event of possible identity theft and provides you with resolution services in case you are a victim of identity fraud.

10. Can a credit card build my credit score to buy a house or a car?

Yes, paying your credit card on time each month can help you build your credit to secure future financing. This is because card providers typically record your payments so that the information is accessible by the credit bureaus.

11. Should I get a credit card?

If you are looking for features and benefits that compliment your spending habits, a credit card may be a good financing solution. Ask your provider about the options available to see which one suits your needs.

If you have a larger purchase that you know you’ll need to finance, another option is to look into a personal loan. See how affordable your goals can be in just 30 seconds by visiting our Payment Estimator here, or call our team at 866.280.5476 to speak to a loan specialist today.

1We group similar merchant category codes into Purchase Categories that are used to calculate the stated rewards. We make every effort to include all relevant merchant category codes in the listed Purchase Categories. However, even though a merchant or the items that it sells may appear to fit within a Purchase Category, the merchant may not provide us with the merchant code that will fall within that Purchase Category. Because of this, we cannot guarantee that a purchase will qualify for more than the standard 1% (one percent) cash back as any purchase where a merchant uses a category code outside of the eligible Purchase Category does not qualify for additional cash back rewards.