First time to apply for a credit card?  Or a long-time loyal user? Or maybe one who learned painful lessons with credit card debt and has cut off your plastic currency ties?

Whichever you are among these 3, shopping for a new credit card can be good for your wallet.

If you’ve never owned one before, now’s your chance to discover the joys of buying now and paying later.  If you’ve been a credit card owner for years, it may be a good time to see if there are more rewarding cards out there.  And if you’ve stopped using for fear of abusing it again, no harm in checking out options and just see if you’ve learned your extravagant lessons from the past.

As digital payments become more and more the norm rather than the exception, cash payments or using debit cards can be quite unrewarding.  Yes you can get discounts with paying cash, but sometimes a credit card promotion will earn you more savings.  Debit cards can be convenient when sticking to a budget, but none of your spending can earn loyalty points that may give you anything from cash rebates to free gas or even free flights.

Here are five things to look for when choosing your new or next credit card.

#1 No annual fee for life

Years ago, getting an annual fee waiver is like an annual visit to the dentist: painful, but needs to be done, and will (still) cost you.  But recently, more and more card companies have introduced no annual fees if you hit an annual spending requirement.  As credit card annual fees can cost between about P1,500 to over P5,000, getting that waived, for life, is a welcome bonus.  

Before signing up, see how much you think you would be spending on your credit card.  Start with bills that need to be paid like electricity, phone, water plus groceries and gasoline expenses.  When you have the amount in mind, shop for a credit card with an annual spend requirement close to that, to make sure you can meet it and easily get the waiver.

#2 Sign-up bonus

The credit card business has become so competitive that companies have been launching aggressive campaigns to win new clients.  Some will offer you gifts just for applying – and I’ve been offered umbrellas, reusable bags and popcorn buckets just to fill up a form.  Then there are more tempting offers when you get approved, or also with spending a certain amount within a prescribed period, which could be 1 month up to 3 months.  You could get a free luggage, rewards points, frequent flyer miles, or my absolute favorite – cash rebates.

Try to time your application during these promotions so you get something extra right from the start.  If they also waive first year annual fees (without a required spend), that’s a great way for you to test the waters and see if the credit card is worth keeping beyond 12 months.

#3 Rewards you will use

Most credit cards offer a rewards program designed to give you an incentive to keep using them.  But not all rewards programs are created equal so check for what rewards you need, and how much you will need to spend to earn them.

Personally, I like to redeem my points for frequent flyer miles, and redeem them for trips.  I found out that some credit cards will give me more miles for less spend than others, so I now use those cards more than others I also own.  

READ: Here’s the fastest way to earn a free business class ticket with credit card points

Maybe you prefer cash rebates?  Then look for one that gives higher percentage, plus bonus rebates for certain spend categories like groceries.  If you prefer gas rebates, there are a few credit card products just for this.  Know the rewards you want and spend where you can best earn them.  

#4 Free benefits for you and even family and friends

I own a credit card that gives me free travel insurance if I use it to pay for air tickets, so that’s just what I do.  This way, I save on having to pay extra for travel insurance. There are also credit cards that give free lounge access when you travel, regardless of airline or class you fly.  Some even allow you to bring a companion at no cost.  Others offer free supplementary cards, which can be useful if you plan to give one to your spouse, children or other relatives.  There are also those that regularly offer 50% off dining promotions at popular restaurants.  

Do your homework on these free perks and choose the credit card whose perks you will find most useful.

#5 Long payment schemes with zero or little interest

I like to pay for big purchases in ‘gives’ or installment, especially if it’s zero interest.  I like it better when it’s a buy now, pay later plan – where the first payment does not start until 2 to 3 months later.  This way, I can hang on to my cash a little longer.

But note that you need to pay for installment purchases on time, to avoid paying any or higher interest.  Credit card companies make these offers as they are taking a calculated risk, that maybe you will default on one payment and then they can charge you interest on the remaining balance.  Don’t fall for this trick – say yes to installment only when you can pay your entire credit card balance in full.

ABOUT THE AUTHOR

Aneth Ng-Lim returns to writing after more than two decades of working as a communications specialist in the government and the private sector. Her advocacy for financial inclusion and personal finance began when she served as head for Consumer Education during her stint at a multinational bank.