Making the Most of Your Credit Card

Expert Q&A
on December 19, 2013

Dear Kirk: I already have a credit card that I keep on-hand for occasional use, but every week I receive an overwhelming number of solicitations from credit card companies offering new benefits and rewards programs—so many that they typically all go straight to the recycling bin. But now I’m curious. What’s the best approach for choosing a credit card best suited to my needs?

Kirk Says: It looks like we use the same postal carrier, because your mailbox sounds exactly like mine—stuffed with offers for the latest and best rewards or cash back program. And if you are like me, your e-mail inbox is bombarded with offers, and you can’t watch your favorite episode of reality television without seeing a commercial hawking another version of a rewards card.

So are we missing out on something? Or is it just a marketing strategy akin to “filling up the sky with bullets so you are bound to hit something?” Here are a few factors you should consider before applying for a new line of credit.

Your Typical Credit Card Balance

Start by asking yourself this question before you start shopping for credit cards—do you carry a balance or do you pay the credit card off each month?

If you are carrying a balance, you are better off with the credit card that offers the lowest interest rate on that outstanding balance. There’s little benefit to receiving 2 percent cash back when your interest rate is 18 percent on any unpaid balance.

Your best bet is to either start paying your card off every month, or compare the rewards programs attached to the credit cards with the lowest interest rate you can find.

Spending Habits

Now let’s look at your spending habits. Some cards offer deals on gas and groceries, while others offer extra rewards on home improvement or restaurants. Some of these offers even include savings on specific categories depending on the time of the year (think extra cash back for online shopping at the holidays).

I personally use sites like,, or to compare the features of a wide array of cards. Once I’ve narrowed down the features that match my spending habits or other specific criteria that I’m seeking, I then go to the company’s website to see if there may be additional promotional features.

Finding a Common Denominator

Once you’ve identified the cards that offer interest rates compatible with your needs and rewards programs that match your shopping habits—you can then find a final common denominator for comparison.

Some cards offer travel miles as a reward, while others offer cash back. To level the playing field, boil everything down to a matter of dollars. Then choose the card that puts the most dollars in your pocket that you will actually use.’s comparison tool is particularly useful in displaying your annual savings based on the spending habits you input through the site.

Kirk Gwaltney is a Chartered Financial Consultant and a Chartered Life Underwriter in Brentwood, Tenn. Learn more about him at

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