If you’re thinking about applying for a new credit card, it’s important that you carefully consider your options. It’s not uncommon to feel overwhelmed with the numerous credit card offers that make their way into your mailbox and email. With so many options, it can be difficult to decide which card is right for you. Here are 5 things you should consider when choosing a credit card.
How You Intend to Use the Credit Card
When choosing a new credit card to apply for, the first thing you need to think about is how you plan to use it. Will you be using this card for everyday purchases, or for emergency purposes only? Do you plan on paying the card off in full each month, or do you anticipate carrying a balance from month to month? How you plan to use the card should be an important factor when looking at other variables, such as interest rate, fees, penalties, and incentives.
Interest Rate
It’s important to shop around for the best interest rate possible when choosing a credit card. Many cards will offer introductory interest rates, or even a zero percent rate, for a specified amount of time. While these offers may be tempting, you need to look at what the APR will be after the promotional period is over. If you’re likely to carry a balance from month to month, you’ll want the lowest rate possible. Having a low-interest rate will keep your monthly payments manageable and save you money in the long run.
Fees
Choose a card with reasonable fees. Ideally, you should look for a credit card that has no annual fee and no fees on transactions, such as balance transfers and cash advances. Some credit cards will offer rewards and other incentives, but will also require that you pay an annual fee. Shop around and you’re sure to find a card that has no annual fee and offers incentives.
Penalties
When considering a credit card to apply for, make sure you understand any penalties associated with the card. Some credit card companies have high penalties for late payments or exceeding the credit limit. Credit card companies can also raise interest rates for as little as one late payment, in addition to charging a late fee. Always read the fine print and avoid cards with exorbitant late fees and penalties.
Rewards
If you’re looking for a card to use on everyday purchases, consider a card with a good rewards program. Many credit cards offer a variety of incentives, such as cashback and travel rewards, which can ultimately save you money. Choose a card with rewards that you’ll actually use, are easily earned, and easily redeemed. Carefully review various reward programs as many have restrictions and limitations that make it difficult to use them. For example, some rewards expire or have limits on how much you can earn.
Choosing the right credit card for your needs doesn’t need to be complicated. At Camino Federal Credit Union our Visa Platinum Card with Rewards gives you all the perks without the hassle. Enjoy 1 point earned for every $1 spent, no annual fee, low variable rates, and valuable perks including purchase protections.
If you have more questions or you’re ready to apply for a credit card, contact a Camino Team Member at 1-800-835-3400; and don’t forget to sign up for our newsletter for more financial tips.