Selecting a Credit Card

October 27, 2023

By Carman M. Young, CFP®

Credit card companies can be aggressive in marketing their cards and their perks. Who doesn’t want a free trip to Europe? With so many options available, how do you determine what credit card is the best fit for you? Selecting a credit card is a personal decision that should be tailored to your goals and spending habits—including your need for a credit card, understanding your credit score, and having the best card for your needs.


There are a lot of different reasons to apply for a credit card: rewards, building credit, and paying down debt. Credit cards can be powerful tools that can help you improve your credit score, but they are only useful if you use them correctly. Even if you have plenty of funds in your savings accounts, using a credit card can be a great way to earn rewards. So where do you even begin?

Credit Score

Knowing and understanding your credit score is the first step to determining what your credit card options are. Building credit doesn’t happen overnight. You must show the credit bureaus you can handle paying your balance on time consistently. You can access a free copy of your credit once a year through the 3 major credit bureaus: Experian, Equifax, and TransUnion.

Using the card

Are you hoping to earn rewards for next summer’s vacation? If so, looking at a card’s reward system is important. But if you are trying to build credit, a secured credit card might be the best option for you. Or, if you are trying to pay down debt, a balance transfer card might be a powerful tool.

  • Reward systems: When looking at a card’s reward program it is important to think about how you want to use the rewards. The first step to optimizing your credit card rewards is to understand the different types of credit card rewards and how they are generated. The first is cash back—the simplest type of reward. The primary benefit of cash back is its ease of use because the user knows exactly how much his/her rewards are worth and can use the cash for any spending need. The second is travel points—for hotels or plane tickets. Many travel companies offer loyalty programs in which customers earn miles or points that can be used to upgrade travel perks while flying (or staying at a hotel). If you travel often, this is a good option. The third is transferrable points—points issued directly by a credit card company that can be redeemed for different uses. You can typically redeem these points for a plethora of uses, from receiving cash back to booking travel. This option offers flexibility to cardholders. Note: points earned are typically forfeited when the card is closed.
  • Secured credit card: If you can’t get approved for a traditional credit card because you have bad (or no credit), a secured credit card might be the best option. When you own a secured credit card, you are required to deposit funds that serve as collateral for charges made using the card. If you are unable to make your payments, the issuer keeps the deposit. Otherwise, the funds will be returned to you once you close the account.
  • Balance transfer cards: If you are trying to pay down debt, a balance transfer card might be a good option to consider. You can pay down debt while avoiding interest charges during the introductory low APR period. Note: many of these cards require excellent credit and charge balance transfer fees based on the transferred balance.

Before obtaining any credit card, read the fine print. Read the agreement to understand the costs and fees you might be liable for (and any other annual fees you might be subject to paying.) Pay off your balance on time and in full every month. Not paying your bill can be costly in more ways than one. Most credit cards charge an extremely high interest rate and can potentially harm your credit.

Credit cards are not a one-size-fits all. Each type of reward has its pros and cons, and the best reward for someone will depend on personal preference. Shop around and determine your options, but only apply for one credit card at a time. Applying for multiple cards can harm your credit. Open one account at a time to see how each account impacts your score before applying for additional cards. Individuals who have multiple cards should be aware of the various payment due dates. Credit cards can be a powerful wealth-building tool when used appropriately. The card you choose should help you meet your financial goals in the most efficient way possible. As with any financial decision, always do your homework before you make a decision.


About Carman Young

Carman M. Young, CFP® graduated from Clemson University in 2019 with a B.S. in Financial Management with an emphasis in Financial Planning and minor in Accounting. Carman earned the CFP® designation in December of 2021. Prior to joining Abacus in 2021, Carman served as a Client Service Advisor for Oak Advisors in Bluffton, SC. As a member of the financial planning team, Carman works closely with senior advisors on the Abacus team to support their work on behalf of clients.

About Abacus

Abacus is a financial advisory and investment counsel firm focused on serving families with shared assets from businesses to commercial real estate to oil and gas holdings. Managing over $1.7 billion on behalf of its 250-plus families, Abacus consists of a team of multi-disciplinary experts who work collaboratively to serve its clients.