Choosing a credit card is not an easy task, especially in the United States and Canada, where there are hundreds of options available.
With so many fees, benefits, and different types, making the wrong choice can cost you money and cause headaches.
In this guide, you will learn clearly and objectively how to choose the ideal credit card, saving on fees and maximizing your benefits.
What Is a Credit Card
How It Works in the US and Canada
In the United States and Canada, a credit card works as a revolving line of credit. You make purchases, pay the balance by the due date, or choose to carry a balance with interest (APR).
Unlike Brazil, credit cards are one of the main tools for building your credit score, which directly impacts your ability to get loans, rent housing, and even job approvals.
Differences From Credit Cards in Brazil
- In Brazil, credit cards are mainly used as a payment method.
- In the US and Canada, they are essential for building and maintaining your credit history.
- The fees, benefits, and rules are significantly different.
Main Types of Credit Cards
Basic Credit Cards
Simple cards with no annual fee and few benefits. Perfect for those just starting out.
Cashback Credit Cards
Give back a percentage of the amount spent. Ideal for those who make regular everyday purchases.
Travel and Rewards Credit Cards
Accumulate points or miles for flights, hotels, and upgrades. Often include airport lounge access and various insurance protections.
Secured Credit Cards (For Credit Building)
Require a refundable deposit as collateral. Ideal for those starting out, with no credit history, or looking to rebuild their credit.
Essential Factors When Choosing a Credit Card
Annual Fee and Hidden Charges
- Many cards offer no annual fee.
- Check for hidden fees such as:
- Foreign transaction fee
- Cash advance fee
- Late payment fee
Interest Rates and APR (Annual Percentage Rate)
- In the US and Canada, interest rates can be very high if you don’t pay your balance in full.
- Check the card’s APR, typically ranging between 18% and 29% annually.
Benefits and Rewards
- Cashback in specific categories or on all purchases
- Points or miles for travel rewards
- Travel insurance, purchase protection, car rental insurance
- Airport lounge access
- Extended warranties and simplified dispute resolution
Initial Credit Limit
- Entry-level or secured cards usually offer lower limits.
- Premium cards offer higher limits that grow with your credit history.
Approval Ease
- If you don’t yet have a credit history in the US or Canada, prioritize secured cards or beginner-friendly options with more flexible approval criteria.
Customer Service and Support
- Evaluate the quality of customer service.
- Check if the issuer provides multilingual support, as some institutions in Canada do.
Understand Your Spending Profile
Do You Spend More on Everyday Purchases?
Look for cards offering cashback on groceries, gas, pharmacies, and general spending.
Do You Travel Frequently?
Travel cards offer valuable perks such as:
- Miles or points accumulation
- Airport lounge access
- Complimentary travel insurance
- No foreign transaction fees
Do You Need to Build Credit in the US or Canada?
If you are starting, choose a secured card or one designed for those without credit history.
After 6 to 12 months, it is possible to upgrade to better cards.
Best Credit Cards for Each Profile (Examples)
For Cashback Seekers
- Citi Double Cash – 2% cashback on all purchases
- Chase Freedom Unlimited – 1.5% flat plus bonus rates on specific categories
For Travel and Miles
- Chase Sapphire Preferred – High-value points for travel and partner redemptions
- American Express Gold – Excellent for earning points on travel and dining
For Credit Building
- Discover It Secured – No annual fee, offers cashback, ideal for beginners
- Capital One Platinum Secured – Easy approval with upgrade options after a few months
For Low Fees
- Citi Simplicity – No late fees, no annual fee
- Capital One QuicksilverOne – Simple cashback with easier approval process
Common Mistakes When Choosing a Credit Card
- Focusing only on the credit limit and ignoring fees
- Not reading the terms and conditions carefully
- Ignoring APR and applicable interest rates
- Applying for several cards in a short period and damaging your credit score
- Choosing cards without evaluating if the benefits match your actual needs
Final Tips Before Applying
How to Compare Cards
- Use websites like NerdWallet, Credit Karma, and RateHub (for Canada)
- Compare annual fees, APR, benefits, rewards, and approval requirements
Where to Search for Cards
- Traditional banks: Chase, Citi, TD, RBC, Scotiabank
- Fintechs and online issuers: Capital One, Discover, American Express
Check Your Local Credit Score
- In the US: check for free at Credit Karma, Experian, or Equifax
- In Canada: use Borrowell, Credit Karma Canada, or Equifax
What to Take From This Guide
Choosing the ideal credit card goes far beyond looking at the limit or its appearance. It is crucial to understand your spending profile, evaluate fees, choose benefits that fit your routine, and, most importantly, build your credit history responsibly.
With the right information, you can make smart choices and take full advantage of what the financial markets in the United States and Canada have to offer.
