4 best ways to shop for a credit card

Though overall credit card usage is down a bit (as of mid-2012, American credit card debt was down 17% from its all-time high in 2008), it's estimated that more than 119 million American households still carry at least one card. If you're in the market to become one of those cardholders, here are a few tips: 

Define your card usage The first step in choosing a new card is to look at how you've used credit cards in the past. Do you have a history of carrying a balance, or do you pay it off every month? If you're a new card owner, you'll need to make an honest assessment of your spending habits and plan how you'll use your card. You don't want to choose a card with a higher interest rate in order to get cash back or other benefits and then find yourself carrying a balance and growing that interest. 

Know what to look for There are several key factors to compare when shopping for a credit card. First is the APR. Many cards list a range of percentage rates; which one you get will depend on the issuing company's criteria while processing a credit card application. In many instances, you won't know which percentage rate you'll actually get until your application is approved, so don't go with a card you wouldn't want at the higher rate. If you're going to be transferring a balance from one card to the new one, be sure to look for the APR for balance transfers - and look at the rate you'll be paying over the life of the card, not just the introductory rate the company may offer you. It may be in your best interest in the long run to keep that balance on the card you already have. Take a careful look at all of the fees listed, such as annual fees, late-payment penalties and cash advance charges.

Shop around Look at offers from several different companies and weigh the APR and fees against your spending habits as listed above. Do you tend to carry a balance? You'll want to look for the card with the lowest APR for which you qualify. Do you pay your balance in full every month? Then you might want to look for a card that has a higher APR, but offers rewards such as cash back or frequent flyer miles. When beginning your search, check with your bank or credit union first. You may be able to leverage your good relationship with your existing financial institution into a better deal.

Talk to your current credit card company Once you've found a great credit card deal, take it to your current company and ask if they can match or beat it. If you've got a great payment history, your card issuer may be willing to cut you a deal to keep your business.

About the author: Angie Mansfield writes on a variety of business topics for a range of business and consumer sites, including processing credit card options.