There are various credit card offers out there, but how do you determine which one is the best for you? Whether it’s your first credit card, or you’ve had several, it’s important to find out all the information before making a decision! We share what factors you could consider when choosing a credit card.
1. Annual Percentage Rate (APR)
If you don’t pay your credit card balance in full each month by the due date, interest may accrue on the amount you owe. Your interest rate, also known as an annual percentage rate or “APR,” is the normal rate that you pay on the amount you owe. Depending on the card, there may be different terms. You will want to check if the credit card has a lower introductory APR or if there are any introductory APR offers that allow you to transfer a balance from another credit card. Make sure that the credit card you choose offers a grace period.
2. The Cost of Keeping the Card
Even if a credit card offers great benefits, you may end up spending a lot on fees if you aren’t careful. If the card charges annual fees, you may get better rewards in return, such as savings on travel, which could offset the cost of the fee.
Depending on where you get your credit card, you could also save money by taking advantage of cards that waive the fee for the first year. If you’d prefer a no annual fee card, there are many to choose from.
Another fee to look for is foreign transaction fees, which charges you to use your card outside of the country. If possible try to look for a card that doesn’t charge foreign transaction fees.
3. Rewards
One of the best benefits of credit cards is the amazing rewards programs. Every time you make a purchase, you could earn points that you can apply toward travel, retail purchases, cashback, and more.
To help you get more points, pick a card that gives you rewards for where you spend the most such as gas stations, grocery stores, or online retailers. Just be sure to spend money on the items you actually need otherwise you will just be spending more just to get a reward and it won’t save you money in the end.
4. Credit Limit
Find a card that offers enough of a credit limit to give you the flexibility to purchase what you need, but not so much that you can get in trouble for charging items you can’t afford.
Usually, a low-limit card is a good option for college students who are learning to use credit for the first time. However, after graduation, you may need a higher limit for larger monthly expenses such as rent, utilities, appliances, etc.
Another benefit of having a higher limit is that it can help you build credit over time.
5. Customer Service
Whether you have a simple question or you just noticed fraudulent charges on your statement, you want to speak to someone quickly that is efficient and has a great attitude.
Good customer service makes all the difference especially when you have challenges. Try to avoid getting credit cards from businesses with hard-to-navigate websites, or that make it hard to get in touch with someone over the phone.
Do you need help choosing a credit card?
As we work together to get through these ever-changing times, let us know how we can help! We have credit card options available to help you with your purchases. Please give us a call at 800-835-3400 to speak with one of our Member Advisors, or visit us online at caminofcu.org for more information. We are here to help you on your financial journey.