Credit cards are very useful for people who want to earn rewards for their spending or build their credit history. They can also be a good way to get a low interest unsecured loan to make a purchase and pay off the balance in monthly payments.

Many people want to know how to pick the best credit card, but the answer will be different for everyone.

If you are looking for the BEST credit card, you need to understand what kind of credit card user you are. Once you know which category you fall under, it is easy to pick the best credit card.

You Need to Borrow Money

If you want a credit card because you want to buy something but can’t afford it right now, I recommend you re-evaluate if you really need whatever you are looking to buy. Chances are you can put the purchase off until you can save enough money to buy it.

However, if you really need to borrow money then the most important thing is the interest rate. If you are going to be paying interest on your credit card, you want the lowest interest rate possible, even if that means paying a small annual fee or giving up a rewards program.

You Need a Card for Emergencies

If you prefer to pay with cash or a debit card, you may still want a credit card for emergencies. You don’t want to be on a road trip with a broken down vehicle and no way to pay for repairs and a hotel.

An emergency credit card is also great because it builds your credit history.

The most important thing about an emergency card is the annual fee. You don’t want to pay an annual fee for something that is going to collect dust in your wallet. The next most important aspect is the interest rate. Chances are an emergency will be a large expense and you may not be able to pay it off right away.

Forget rewards programs for an emergency card; you don’t need them.

You Want to Earn Rewards

If you pay off your credit card bill every month then you should be looking for a card that earns rewards. Rewards are basically free money for responsible card users.

The most important thing in this case is the reward program. You want to get the maximum number of miles/points/cash back for each purchase.

The interest rate is the least important because ideally you will never pay interest on this card.

The annual fee is important, but in many cases a card will offer rewards that offset the cost of an annual fee if you spend enough each year.