Consider the following factors when narrowing down your credit card choices.

1) Personal credit history. This is probably the most important as it will affect everything from your ability to get a credit card to the amount of interest you will pay and the credit limit that will be extended to you as a consumer. The better your credit the better treatment you should expect from the credit card companies. At the same time if your credit isn’t up to standard you may find yourself begging for credit scraps among limited possibilities.

2) Personal spending habits. By knowing how you intend to use your credit card you can make better choices about the type of credit card that will best suit your needs. If you have plans, as well as the means to pay off the balance that is due on your card each month you might want to opt for a credit card that offers rewards. The interest rate on these types of cards is typically higher, but if you are clearing your account each month by paying the balance in full you won’t be subject to those high interest rates.

On the other hand, if you are only going to pay a small payment each month towards the balance you might find that a standard credit card is going to be your best option as it will require the lowest finance charges over time.

3) Personal Interests. Believe it or not, if you have specific interest that rewards programs address you might find that you are actually doing yourself a favor by signing up for these cards and the rewards they offer. You will typically find cards that offer two specific types of rewards: shopping and traveling. If you are passionate about either of these and spend a good deal of personal time and money on them you might find that the rewards offered by the credit card companies really are worth the higher interest rates, especially if you aren’t carrying a huge balance each month.

Another way you can make these points work for you is to make judicious use of double or triple points that are offered. MasterCard offers double points for gas and grocery purchases, which is great if cash back is the reward of choice for you. Just use this card solely for the purpose of putting gas in your vehicles and pay the balance each month. By doing this, you’ll avoid costly interest charges while maximizing the rewards your card offers.

You should also read the fine print when it comes to interest rates, annual fees, and any other fees that may be involved in using a credit card. If you plan to use your card for cash advances, choose a card that doesn’t have prohibitive fees attached to that feature (almost all credit cards will have some sort of fee attached to cash advances, some are simply easier to swallow than others).

Most importantly think ahead when choosing a credit card. Does the card you are considering offer any sort of benefits that encourage you to grow with them as a company? Do they offer identity theft protection or online spending protection? Do they offer benefits that appeal to you?

Take the time before you sign on with a particular credit card company to find a card that will suit your needs in a credit card and plan to stick with that particular card for a little while as you establish a solid credit history. How long you maintain a credit card account is often considered as you apply for additional credit later in life. Choose a card that you feel certain you can live with for a while and you are on your way to beginning a healthy credit history.

Having more than one credit card can help you learn some important lessons in life and finances. On the other hand it can also provide serious temptations that can lead to very real credit problems very quickly. You can use more than one card in order to maximize rewards and earn extra perks, to learn better and more efficient methods for budgeting each month, and to either build or rebuild your credit history.

The trouble for most lies in determining how many credit cards is too many.

For most people 2 or 3 credit cards is the ideal number. Of course, there are no hard and fast rules when it comes to this and there are always mitigating factors. But signing up for a new credit card in order to get a free toaster can lead to trouble.

Your goal is to build a strong history of good credit and positive spending habits. You need to be able to manage each account you have open when it comes to credit cards, as well as keep a good mental balance of what you’ve spend and how much is available on each card at all times. You also need to be able to be absolutely certain that you can make your payment on time each and every month for every card you have. If you can’t do that for two cards, then three would be too many.

Having one credit card that is dedicated exclusively for Internet purchases is also a good idea. You’ll want to watch this account very closely for any unauthorized purchases and make sure that it is heavily guarded against identity theft and fraudulent purchases. Having all Internet purchases on one card and one card alone can save you a great deal of time and hassle if the need ever arises to track your spending history with that particular card. The added benefit of this is that if there is a need to cancel the card as a result it will not cripple your credit or your spending abilities.

You should also consider how the number of credit cards you have affects your credit report. The more accounts, the higher the risk. It is much better to have a few accounts that display a long and loyal history of on time payment and increasing credit worthiness than it is to have 10 credit card accounts that have been opened in the past year and have very low balances. In fact, those 10 accounts are a recipe for disaster and most savvy creditors are well aware of the risks.

Another thing you want to be careful not to do is to close old accounts frequently in favor of opening new accounts. You want an established credit history and 10 years with the same card shows potential creditors and lenders that you have been a good and loyal customer, which indicates that you will also be a good and loyal customer with them as well.

Find a couple of credit cards that will take care of most of your purchasing needs and perhaps one additional credit card that is dedicated to online shopping. Otherwise use the cash you have on hand and keep your balances reasonable on all of your credit cards in case an emergency arises and you need those cards to do their jobs.

Each card has specific pros and cons that are unique to that type of card. Many of these are merely personal decisions on your part as a consumer but it is better to go into the situation armed with knowledge. Below you will find a little information on each card type that should help you make the best possible decision for your credit needs.

1) Standard credit cards are just that, standard. There are no remarkable values or rewards that are associated with them. At the same time you can typically get a lower interest rate with these types of cards, as you aren’t paying extra for rewards, miles, trips, airfare, or exotic getaways.

The best thing about these types of credit cards is that they often offer outstanding offers in order to lure your business in their direction. Many will offer a 0% interest rate for a specific period of time. You can then transfer your balances from higher interest cards to these zero-interest cards.

Make sure you understand any hidden costs in that 0% interest rate before transferring your balance and taking the offer, as there are sometimes fees involved that might prove prohibitive. You should also check for balance transfer fees and exclusions that cannot be covered under the special rate. You should also pay close attention to the expiration or time limit on these introductory rates as well.

2) Reward credit cards are growing in popularity as companies compete in an effort to show you the best possible rewards. You can find rewards of all kinds from vacations to exotic locations to free gasoline. Most of these programs offer to match points for dollars while some will offer extra points for specific purchases. The fine print with these cards often arrives in the interest rate, which is must more costly than what you will find in your standard credit cards. There is nothing, as the saying goes, that is truly free, even credit card rewards.

3) Bad credit credit cards. Cards for bad credit are becoming increasingly popular and forgiving in today’s market as consumers are, perhaps for the first time, beginning to understand just how important a good credit history is. These cards are wonderful for those needing a second chance at credit but come at a high cost in regards to the interest rate.

There are typically three types of credit cards available to consumers who have bad credit: secured, unsecured, and prepaid. Each one will depend largely on how severe your credit problems are. The good news is that responsible spending and repayment with these cards can often lead to establishing better credit for your future. If you find yourself in need of a bad credit or credit building card you should take care that you do not repeat the mistakes of the past. This is a second chance for you as a consumer; you should not take it for granted.

4) Specialty credit cards were created in order to cater to specific needs. There are two primary types of specialty cards on the market today: business credit cards and student credit cards. These cards suit specific purposes and are only intended for those purposes. They will offer special incentives and features to the audience for which they were created and are an excellent choice if you fall into one of the categories covered.

Regardless of the type of credit card you ultimately decide to apply for, it is in your best interest to read and fully understand all the fine print before applying. The more you know about the card you are getting and the price you will ultimately pay for the privilege the better prepared you will be to live up to your responsibilities as the cardholder.

The good news is that sometimes the inconsistencies are merely a matter of clerical errors or misinformation and can be easily corrected. By taking the time to check your credit report regularly chances are good that you’ll find the error before it becomes problematic.

Here are five important reasons you should check your credit regularly:

1) To discover errors and inaccuracies in the report. This is important, especially if you are planning any major purchases in the near future. Incorrect information on your credit report can adversely affect your credit score, which will raise potential interest rates and cost you far more money in the long term. Finding these errors is important so you can have them corrected in a timely manner.

2) Tracking payments. Paying bills on time is important, but things do on occasion get lost in the mail. By checking your report often you can discover if something hasn’t been paid on time and call the creditor quickly in order to explain the situation and make alternate arrangements. Without your credit report you may not fin out about these mistakes until your creditor calls you, by which time it is often too late to avoid any damage.

3) Identity theft. As mentioned above, keeping a tight reign on your credit report is the quickest way many times to discover identity theft. This reason alone is reason enough to keep checking your credit report on a regular basis. The problems associated with identity theft can be devastating, particularly if they go on for quite a while before being discovered. Protect your credit and your good name by watching your credit closely for signs of trouble.

4) Discovering unauthorized charges quickly. While you may be protected from the charges involved when someone steals your information in order to charge things on your account, it is still in your best interest to find and report any suspicious account activities as soon as possible. You should also note that other creditors might see an increase in activity and either raise your rates or deny you credit. It is always in your best interest to fix problems that may arise in your name immediately and before serious damage is incurred.

5) Find out who else is peeking on you. You’ll be surprised to see that banks and credit card companies aren’t the only ones who have an interest in your credit history. Potential landlords, employers, and insurance companies are also known to check credit reports in order to determine your worthiness. Be cautious in whom you authorize to check your credit history as excessive inquiries can have a negative impact on your credit record as well.

It’s important to keep your eyes on the prize: a good credit record. There are so many things that can go wrong once you’ve achieved that goal. Take the time to protect your good credit record by checking often to make sure everything is going smoothly and reported accurately on your credit report.

Personal finance can seem a bit intimidating to most people, but you really don’t need to be a finance expert to manage your money.

In fact, many of the basics are easier than you think. Here’s 5 rules that, if followed diligently, will go a long way towards improving your financial security.

1. Run a budget surplus.

Perhaps you’ve heard the famous quote from Wilkins Micawber in David Copperfield:

“Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness.

Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”

Simply put: If you want to avoid financial disaster, you’ve got to earn more than you spend.

Obvious, right?

But it’s a simple rule that escapes most of us. Usually, when we begin to earn more money, our spending increases accordingly. It’s tough to resists the lure of all the new things you can buy. And when you’re consistently spending more than you make (particularly when this spending is going on your credit cards), can you guess what the long term result is? That’s right: Misery.

2. Understand compound interest.

Einstein once reportedly declared compound interest the most powerful force in the universe (at least that’s the urban legend). Whatever he actually said, there’s no doubt compound interest can be your greatest friend or worst enemy, depending on which side of the equation you fall on.

Compound interest is a fairly simple concept: Whenever interest is calculated (be it on your savings account, your credit card debt, your mortgage, etc…) it’s based not just on your original balance but on any interest that has been added. Basically, your interest earns interest, which in turn earns its own interest, and so on, leading eventually to an exponential growth rate.

Interest is typically compounded annually, biannually, quarterly, monthly, daily or sometimes even continuously. The more frequently interest compounds, the faster it grows. Compound interest is why a small amount saved and invested can grow into a large sum over time. It’s also why your debt can grow to unmanageable proportions if you’re only making your minimum payment each month (more on that later).

3. Start saving early.

If you’re young and can afford to save regularly, compound interest means you can turn a small initial investment into a huge retirement fund. For example, a 20 year old who puts $1000 into a 5% interest savings account compounded daily (many online banks offer similar rates) and is disciplined enough to add $100 per month will see this account balloon to $213,184.53 by the time they turn 65.

If that same 20 year old had instead been stuffing that $100 under their mattress every month, at 65 they’d have saved just a paltry $55,000. That additional $158,184.53 came about purely through the miracle of compound interest.

To find out how many years it will take you to double your money on any investment with compound interest, use the Rule of 72. Simply divide 72 by the interest rate you’re getting. For example, with a 5% interest rate, it’ll take you 14.4 years to double your money (72/5 = 14.4). With a 15% interest rate, you’ll double your money in just 4.8 years. Even if you’re not in your 20s, compound interest will still work strongly in your favor. But the earlier you get started the better.

4. Always make more than your minimum monthly payment.

The other side of the compound interest equation is when you owe money. It can take you 25 years to pay off $5000 debt on a 12% interest credit if you just paid the minimum balance each month. At that point, you will have also racked up nearly an additional $5000 in finance charges (which is exactly what credit companies want to you do).

That’s because a big chunk of your minimum monthly payment goes towards paying the accrued interest which, as we know, keeps growing and growing. Same with your mortgage. Minimum monthly payments are designed to take as long as possible to pay off your debt, allowing the lender to rack up the highest possible finance charges they can.

The rule here: Start saving early and frequently to have compound interest working strongly for you, and always make more than your minimum monthly payment on bills where compound interest is working against you.

5. Control your spending.

Seems obvious, yet few do it. Here’s one way look at it: If you were to get a $5000 a year raise, you’re going to lose about 30% of that raise to state and federal taxes. However, if you find ways to trim your annual spending by $5000, you get to keep 100% of that money tax-free. From that perspective, cutting unnecessary spending is actually better than earning more money, because you get to keep more of your money.

The first thing to keep in mind when getting a credit card is that this card will be a large part of what represents your credit-worthiness for all major purchases in the future. These purchases may include your home, your automobile, and even a business. The way in which you handle this debt will impact your ability to borrow money in the future.

Contrary to popular belief, some debt is actually good for you as it allows you to establish a credit history. Your credit history is what future lenders, insurance agencies, and some employers will take note of when deciding if you’re a worthy candidate. It is important that you take good care of your credit standing from the very beginning. Don’t overwhelm yourself in debt, pay your bills on time, and make wise decisions when it comes to whether or not to accrue more debt.

Consumers lose sight all too quickly that credit is a privilege that must be respected. Credit allows you the opportunity to buy things that you could not afford to pay for in one lump sum under ordinary circumstances, such as homes, cars, clothes, electronics, and furniture. Most of these items are ’secured’ by the value of the item for which the credit is extended (such as cars and homes that may be foreclosed upon as the result of a failure to pay). Credit cards offer less risk to consumers in that they provide unsecured debt, meaning you won’t lose your property if you don’t pay.

There are, however, stiff penalties for not honoring credit card debt that should be carefully considered. First of all, you have agreed to honor the debt and repay the amount of credit that has been extended to you. You should understand that the privilege of unsecured debt carries a very high price tag for delinquent payments–an increased interest rate. In addition, many credit card companies require that you have established some degree of trust-worthiness by means of a positive credit report before most companies are willing to take a risk on extending you the courtesy of credit.

Credit cards offer high interest rates and in many cases are not the best option for consumers who have difficulty reigning in their spending habits. If you have issues in this department, you should carefully consider if you are ready for a credit card. If you need a credit card in order to establish a credit history, one option is to choose a credit card that limits the places in which you can use them, such as one particular store.

This helps many consumers avoid overspending but also poses problems, as it doesn’t truly suit the purpose of handling emergency situations. If this is your dilemma, choose a credit card with a low limit. This will keep your spending in check and help you develop positive spending habits as you build your credit history.

Credit cards are becoming less of a luxury and more of a necessity. Many items must be secured by a credit card in order to be obtained. It is important to guard your credit well beginning with your credit cards and extending to all future credit as well. Hopefully these tips will help you decide whether or not now is the best time for your to apply and perhaps which type of credit card will be best for you to have.