Need a credit card fast? If you choose that credit card wisely, it can reduce financial stress caused later by soaring APRs and a multitude of late fees.

And remember: While credit cards and credit card debt can be a huge source of financial stress, particularly if you build up a significant balance, they can also be important tools for raising your credit score and strengthening your financial standing.

But a large segment of the card-carrying population is causing themselves more financial stress by not choosing a credit card that’s right for their needs. A recent study by J.D. Power found that more than 20 percent of credit card customers are using cards with fees or rewards that don’t line up with their purchasing habits.

For example, about 44 percent of the customers who have credit cards with airline rewards have the wrong card for them. This is because they either 1) don’t spend enough on the card each month to earn enough rewards to make up for the cards’ typical $75 annual fees, 2) haven’t used any of their accrued airline benefits in the last year or 3) haven’t redeemed any rewards in the last 18 months. If you’re one of those people, you’re throwing your money away on fees that aren’t helping you financially and will take a long time to collect on the free airline ticket promise.

It seems like there’s a new credit card rewards program emerging every day, touting great-sounding deals like enrollment bonuses, low promotional interest rates and double rewards.

So how do you sort through the noise to pick the correct credit card for you? Here are three important tips to keep in mind:

Tip #1: Figure out how you’ll use it.

The best credit card for you will depend a lot on how you plan to use it. If you’ll only charge small expenses and pay them off in full each month then interest rates may not be as big of a concern for you as other features like the rewards the program offers. If you plan to use your credit card  for big purchases you’ll pay off over time, however, you’ll want to find a lower-interest card that will cost you less in interest.

Remember that spending less in interest is almost always a better idea than spending more in order to get points or airline miles.

To prove it to yourself, take a look at your history with your current credit card and see how well you’ve made use of the benefits. If you never turn your reward points into anything but are quick to spend cashback bonuses, then you should look around for a card that gives you the most cash back.

Tip #2: Pay attention to interest rates and fees.

Even if you’ve found a credit card that seems to fit what you want, the fine print can derail your plans. If you’re planning to use your new credit card to consolidate other debts with a balance transfer, you’ll want to avoid cards with balance transfer fees. Or, if you’re attracted to cards with a large sign-up bonus, be sure you know how much you have to spend and in what timeframe to actually earn the promised bonus.

Interest rates are a concern all their own, since an introductory offer like zero percent interest could either be of excellent use or meaningless to you. Again, the importance you place on interest rates may vary depending on your intended use for the card, but look into the terms and understand how they’ll affect you before signing up.

Tip #3: Pick the credit card reward you’ll use most.

If you’re afraid of flying, a card that pays out rewards in the form of airline miles will be of no use to you. Instead, consider looking for cards that offer rewards for shopping in stores you already frequent or on the types of products you use often. They should also pay out their rewards in a form you’ll actually use and encourage a more positive relationship with your card.

Once you’ve identified the type of card you want, look at all of your options. A new company could have the perfect match, but the study also recommends looking at other cards from your current issuer.

Finding the right credit card for you can be difficult, but if you take the time to sort through the noise and deluge of offers you receive in the mail, you’ll be able to find one that fits your needs and gives you great rewards along the way.

 

[amazon_link asins=’1400081971,B00004U12N,B00LZS5EEI,B071ZVQVFQ’ template=’ProductCarousel’ store=’thinkglink-20′ marketplace=’US’ link_id=’ef4fde54-ca51-11e7-83be-b1aa445bae55′]