A credit card is a bit like a hammer — it’s a very handy tool, but it’s also capable of causing damage if used improperly. The same advice applies to both of them — choose the right tool for the job, and follow the safety rules.

• 1. Check your credit score

• 2. Determine how you will use the card

• 3. Consider the interest rate

• 4. Assess fees and penalties

• 5. Weigh the incentives



So when you choose a credit card, here are six things to consider.

Getting a credit card, step by step

Check your credit score

Determine how you will use the card

Consider the interest rate

Assess fees and penalties

Weigh the incentives

Complete your application

1. Check your credit score

Your credit score will play a big role in determining what kind of card you’ll qualify for. Generally, a score of 700 or higher will allow you to get a rewards card with a sign-up bonus or a promotional interest rate (and a relatively low regular APR).

There are many ways to check your credit score, but not all of them are free. Fortunately, issuers such as Discover and Capital One offer services that allow you to check your score at no cost, even if you’re not a customer. And if you have other credit cards, chances are some of them will include your free FICO score, updated monthly, in your online account.

You can also request a free copy of your credit report at AnnualCreditReport.com. You are entitled to one free report from each of the major credit bureaus — Equifax, Experian and TransUnion — per year. Review your report for any items that may be holding down your score, including errors or high card balances.

2. Determine how you will use the card

Even before you choose a card, the first question to be answered is how you intend to use it. Are you the kind of person who will pay off the card every month without fail, or do you anticipate carrying a balance from month to month? Are you going to use it to pay for everything, or just for emergencies?

Answering these questions will help you narrow your search and find the card that’s going to work the hardest for you.

Need to build credit?

If you’re going to pay the bill in full every month, then the interest rate doesn’t really matter to you. Look for the best card with no annual fee and a longer grace period so you don’t get hit with a finance charge. Paying your bill on time and in full is the best way to establish and maintain strong credit.

Need to pay down debt?

If you’re going to transfer a balance, you want the lowest possible interest rate or, better yet, a low introductory rate. The best balance transfer cards offer a long 0% introductory APR period, during which you can work on paying off your balance without accruing interest.

Want to earn rewards?

If this is going to be your go-to-card for most of what you buy, look for a card with a generous credit limit and a solid rewards program.

Need an emergency card?

If it’s only going to be used for emergencies, go for a no-frills card with a low interest rate and minimal fees.

“There are so many cards that are out there,” says Howard Dvorkin, founder of Fort Lauderdale, Florida-based Consolidated Credit Counseling Services and author of “Credit Hell: How to Get Out of Debt.” “People have to sit down and think about what’s important to them.”

3. Consider the interest rate

On a credit card offer, the interest rate appears as the APR, or annual percentage rate. It can either be a fixed rate or a variable rate tied to another financial indicator, most commonly the prime rate.

With a fixed-rate card, you know what the interest rate will be from month to month; a card with a variable rate can fluctuate. However, even a card with a fixed interest rate can change based on certain triggers, such as paying your card — or any card — late or going over your limit. Or because the credit card issuer decides to change it. Yes, they really can do that; they just have to notify you.

Remember that the interest rate only matters if you’re carrying a balance from month to month. If you pay your statement balance in full each month, you can avoid interest entirely.

4. Assess fees and penalties

Interest isn’t the only charge you have to watch out for. Common charges include fees for transactions, such as balance transfers and cash advances, or asking to increase your credit limit or make a payment by phone. There also are penalty charges for paying your bill late or going over your credit limit (they don’t decline your card; they just sock you with a fee for it).

Look for cards with reasonable fees. On balance transfers, for instance, look for introductory offers with no balance transfer fees and 0% interest for at least 12 months.

“This is a crucial issue,” says Eric Tyson, author of “Personal Finance for Dummies.” “You might not intend to carry a balance. But before you agree to accept a card, understand all the terms and conditions because your situation might change … Stay away from ones with exorbitant fees and high late fees, even if the other features seem relatively attractive.”

5. Weigh the incentives

The best rewards credit cards offer the ability to earn cash back, points or miles on the purchases you already routinely make — whether it be groceries, dining at restaurants, streaming services, gas or something else. If you can spend responsibly, why not pay with a credit card that will give you something in return?

Look for a program that offers flexibility, such as cash or travel, and rewards that are easy to earn and redeem. And find out if rewards expire or if there are any limitations on how many points you can earn or must earn in order to redeem them.

And while long-term value is key, one-time perks can be valuable too. Many rewards cards offer sign-up bonuses if you meet a certain spending threshold within a few months. You might get a few hundred dollars in cash back, a pile of airline miles or a hefty sum of points.

6. Complete your application

Making the decision is the hard part — once you know which credit card you want, all you have to do is apply.

The easiest and quickest way to apply for a credit card is on the issuer’s website. The application will ask for some basic information, like your address, Social Security number and annual income. You may include any income you have “reasonable expectation of access” to, including your spouse’s or relatives’ income if applicable.

Before you hit “submit,” read through the terms and conditions. It may be tedious, but it can save you from surprise fees, egregious interest rates or other misunderstandings that detract from the card’s value.