If you're seeing this message, it means we're having trouble loading external resources on our website.

If you're behind a web filter, please make sure that the domains *.kastatic.org and *.kasandbox.org are unblocked.

Main content

Choosing a credit card: what to look for

Learn about how to choose the right credit for you. 
Once you are ready to apply for a credit card, there are things you need to consider when comparing across choices.
APR/Interest Rate: One of the most important things to consider is the interest rate, or APR, of the credit card. This is the amount of interest you'll be charged on any unpaid balance. While it's ideal to pay off your credit card balance in full each month, sometimes that's not possible. If you anticipate carrying a balance, you'll want to choose a card with a low interest rate so you don't end up paying too much in interest charges.
Annual Fee: Many credit cards come with an annual fee. This is a fee you pay each year simply for having the card. If you're on a tight budget, you may want to look for a card with no annual fee. On the other hand, some cards with annual fees offer additional benefits that may be worth the cost.
Rewards and Perks: Some credit cards offer rewards or perks for using the card. For example, you may earn points for every dollar you spend that can be redeemed for travel, gift cards, or other rewards. Some cards offer cash back on purchases. If you're interested in earning rewards, be sure to research the specific rewards program to make sure it aligns with your interests and spending habits.
Credit Limit: Your credit limit is the maximum amount you're allowed to spend on the card. This amount is set by the credit card company and is based on your credit score and income. If you anticipate using your card frequently, you may want to look for a card with a higher credit limit so you don't run into any issues.
Other Fees and Penalties: Lastly, be sure to review any other fees or penalties associated with the card. Some cards may charge a late payment fee, an over-the-limit fee, or a foreign transaction fee. Knowing what fees you could be charged will help you avoid any surprises down the line.
Overall, choosing the right credit card comes down to your specific needs and spending habits. By doing your research and considering the factors above, you can find a card that will work well for you.

Where do I find this information?

A Schumer box is a table or chart that credit card companies are required to include in marketing materials and credit card agreements in the United States. It summarizes key information about the credit card, such as interest rates, fees, and penalty charges, in a way that is meant to be easy for consumers to understand. It is named after U.S. Senator Charles Schumer, who sponsored the legislation that required credit card companies to provide this information.
If you already have a credit card, the Schumer box information was mailed to you.
If you are considering applying for a credit card, you can find the Schumer box by clicking on a link that says "rates", "terms", "info", or something similar. Each bank has a different way of naming it. On the other hand, what is listed in the Schumer box is mandated by law, and each credit card issuer is required to provide the following information:
APRThis is the yearly interest rate you have to pay if you don't pay your bill in full each month.
Other APRsSome credit cards have different APRs for different types of transactions. For example, you might have one APR for purchases, and a higher APR for cash advances.
Variable rate informationSome credit cards have variable APRs, which means the interest rate can change over time. This section will explain how and when that can happen.
Grace periodThis is the amount of time you have to pay your bill in full before you're charged interest.
Annual feeSome credit cards charge a yearly fee. This section will tell you how much it is.
Minimum finance chargeThis is the smallest amount of interest you can be charged if you don't pay your bill in full.
Transaction feesCredit cards might charge fees for different types of transactions, like balance transfers or cash advances. This section will explain what they are.
Penalty feesIf you miss a payment or go over your credit limit, you might be charged a penalty fee. This section will tell you how much it could be.

Want to join the conversation?