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If you want to open a new credit card, there is no shortage of options available. Credit card issuers try to lure users in with attractive perks such as low purchase APRs and rewards, but Americans have little opinion about which factor is more important when opening a credit card. divided. A new GOBankingRates survey found that 26% of Americans believe low purchase APR is the most important factor when opening a credit card, and 22% favor rewards and cash back. But which perks are actually better?
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To find out, I chatted with a number of financial experts to get their insights on what they believe is most important. If so, make sure these experts say it’s a more important perk.
Jaspreet Singh, founder of The Minority Mindset: Rewards
“Low APR means nothing to me. I don’t carry a balance, so I don’t know what my credit card APR will be. If you care about APR, you shouldn’t use your credit card. Credit card is only worth it if you pay off the balance in full each month.Look for rewards.Personally, I prefer cashback.”
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Tori Dunlap, Founder of Her First 100K and Author of “Financial Feminist”: Rewards
“When it comes to credit cards, it’s best practice to pay the balance in full each month. If you do this, you won’t be charged interest, so a higher APR won’t affect you. Be a responsible credit card owner.” If you’re a traveler, consider a travel card if you love to travel, or a card that rewards you with points on grocery shopping if you’re shopping with a large family. Try it, many credit cards also have great signature offers.”
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SavingToInvest.com Founder Andy Singh said:
“[It] It depends on your income.If [you are a] high income [earner], go to Rewards and Signup Promotions.If [you are a] low income [earner] If you have/expect credit card debt, focus on getting it [the] Minimum APY. ”
Brynne Conroy, Author of “The Feminist Financial Handbook”: It Depends
“It will depend on your goals. If you are trying to pay off a high interest debt, using a card with 0% APR on balance transfers can help you reach your goals faster if used responsibly. If you’re just starting out and want to travel hacks or use other rewards, these will be the metrics you should look to keep in mind that you want your bills paid off in full each billing cycle. If you do, the rewards you earn will not be offset by interest.”
Derek Sall, Founder of LifeAndMyFinances.com: Rewards
“If you’re paying off your credit card bill monthly, don’t worry about interest. Instead, focus on big reward points because you won’t be charged interest anyway. If you’re having trouble paying your credit card, you should consider getting rid of the card permanently instead of worrying about the APR.”
Tracie Forbes, Founder of Penny Pinchin Mom: It Depends
“Whether you focus on low annual interest rates or credit card perks depends on your individual circumstances and spending habits. Generally, if you have a balance on your credit card, a lower APR is more economical than reward value. On the other hand, if you always pay your balance in full on time, the reward will be more valuable.”
Ted Jenkin, CFP, CEO of oXYGen Financial: Depends
“Since most APRs are variable, you may only get lower APRs during the introductory period. Always get the best cashback or total rewards card for those who can pay their bills monthly. If you can’t pay your monthly bill, find the best low annual rate card or call your credit card company to make a deal.”
Financial Samurai: Sam Dogen, Founder of Rewards
“You should focus more on rewards! Why? Because you always have to pay the full amount on your credit card each month. Take advantage of your credit card benefits instead of letting them use you.”
Steve Chou, Founder of MyWifeQuitHerJob.com: It Depends
“If you are a frequent traveler, when you calculate the cost of air tickets and hotel stays, reward cards almost always offer more favorable perks. A lower APR is usually better if you plan to keep
Bob Lotich, CEPF, Founder of SeedTime.com: Rewards
“My first rule with credit cards is to never carry a balance, so I don’t care what the APR for a particular credit card is. I got a free hotel stay, and for those of you who make regular monthly credit card payments, I encourage you to keep an eye out for cards with more perks.”
Julie Rains, Publisher of Investing To Thrive: It Depends
“I focus on credit card benefits and am afraid to pay off my credit card balance each month before interest accrues because of the high APR. We recommend focusing more on low APRs, interest can easily exceed credit card rewards.”
Stephanie Taylor Christensen, Personal Finance Writer: It Depends
“Focus on rewards when you know with certainty that you will always pay your balances in full when they are due. APR is irrelevant. , pay attention to the low APR. If incomes are reduced due to unemployment or the like, a low APR will ultimately prove more valuable, even for financial security.”
Dave Leto, Founder of 50PlusFinance.com: Low APR
“Focus on the low APR, not the reward. If you want to pay off your debt, a low APR will allow you to put more money into your principal and help you pay off your debt faster. , only if you continue to use your credit card.Don’t let your credit card company fool you.”
Lulu Gal, the founder of Lulu.Gal Jewelry: Reward
“If you have to choose between the two, I recommend going with Rewards. Cards with lower APRs are helpful for people who tend to keep balances on their cards (but don’t have to pay the card back in full. There is!) A card with rewards brings something to your everyday shopping because you shouldn’t carry around a balance if you’re using the card the right way. [have to pay] Therefore, APR becomes irrelevant. It will make more sense for you to choose rewards that best suit your individual needs. If you don’t travel much, miles may not be for you. Choosing cards with rotating categories may not be optimal if you haven’t spent much on the higher categories so far. A fixed reward system may be better in that scenario. . It’s all about choosing the one that makes the most sense based on how you shop. ”
Studenomics: Martin Dasko, Founder of Rewards
“If you don’t have a balance, you need to focus on credit card perks to get the card that allows you to get the most out of your lifestyle. Pay the bills if you can get the right credit card rewards. You can only get benefits.”
Chris Phelps, Wells Artisan: It Depends
“If you are a frequent balancer, you can get better service at a lower APR. If you’re paying off, ask for better rewards all day long.”
Brian, Founder of Lazy Man and Money: It Depends
“Whether you pay attention to credit card interest rates or reward points depends on whether you have the money to pay off your credit card each month. If so, set up automatic payments to collect reward points. A low APR is much more important if you don’t have the money to pay off the full amount and maintain your balance each month.”
Len Penzo, Founder of Len Penzo dot Com: It Depends
“It’s a question that depends on your level of financial discipline. is difficult to control and you are likely to maintain a monthly credit card balance, it is imperative that you focus on finding the credit card that offers the most favorable interest rates.”
Paul Vachon, Founder of The Frugal Toad: It Depends
“I don’t carry around credit card balances, so I prefer rewards. Low interest rates benefit people with credit card balances by reducing overall debt payments over time. increase.”
Joe Udo, Founder of Retire by 40: Rewards
“When buying a new credit card, people who are on top of their personal finances should look out for sign-up bonuses. Many cards offer lucrative cash or reward points bonuses. If you want to pay off your monthly balance, this is the most cost-effective, but you have to be aware of the minimum spending requirements.If you can afford it, go for it!”
Money Crashers: Andrew Schrage, Founder of Rewards
“We recommend that you avoid carrying a credit card balance every month if possible.
There are important exceptions to this recommendation. Many rewards credit cards (especially cashback credit cards) have long 0% annual interest introductory periods, making it difficult to transfer existing high-interest balances or fund large purchases that cannot be repaid in one month. appeal to new cardholders who need to As long as you pay your balance in full before the introductory period ends, you can earn rewards with these cards without paying interest on the balance carried over. However, if you do not pay off all balances by the end of the trial period, you may accrue deferred interest. This is the interest you pay on your advanced balance, charged at the regular rate (usually 15% APR or higher).
If you feel tempted to charge more than you can afford during the introductory period, avoid the temptation of 0% p.a. credit cards and choose a Basic Rewards credit card instead. Only charge what you can pay off and treat your card like cash. ”
Patrice Washington, Financial Coach, Star of ‘Opportunity Knock$’: Low APR
“The real question is, what reward is worth shouldering credit card debt? The biggest reward is financial freedom. Please, APR is not an issue when those people consider compensation, they don’t pay interest.”
CardCon Founder Jason Steele: It Depends
“People avoiding interest by paying their balance in full each month should focus on rewards. Those with balances should look for the lowest APR.”
Todd Tresidder, Financial Coach at FinancialMentor.Com: It Depends
“It depends on two things: how you use the card and what you are using the card for. If you pay the card monthly, the APR is not an issue, so the decision is easy. If you— [which is] Not recommended — then the problem becomes more complicated. To decide what is best for you, you should consider the costs and benefits of each offer. Interest costs typically outweigh the value of card benefits when holding balances. ”
Simon Zhen, Chief Research Analyst and Editorial Director of MyBankTracker.com, said:
“Choosing between a low-interest credit card and a credit card with rewards depends solely on your ability to consistently pay off your entire card balance each month. You will be paying interest rates that are likely to offset the value you get from.In this case, we recommend choosing a credit card with a lower annual interest rate to minimize interest.”
Learn more about GOBankingRates
Gabrielle Olya contributed reporting for this article.
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