By Milton Jones, Collections & Card Services Manager
Credit cards have become one of the most popular ways to make purchases. According to a 2018 survey by the Ohio Credit Union League, 73 percent of respondents stated they use at least one or two credit cards every month. And of that group, nearly 70 percent carried debt on those cards of up to $5,000.
Credit cards can seem easy to get (some people get multiple offers in the mail every week!), but they can have a tremendous impact on your financial health. That’s why it’s important to review your options and carefully choose the best credit card for you.
Typically, people evaluate credit cards based on interest rates and low fees (or no fees). Perks, such as points for travel, discounts, and other rewards, can also influence someone to apply. Those factors, however, should just be part of your decision. Here are some steps to ensure that you match the right credit card to your needs.
Check your credit.
Higher credit scores are more likely to be approved for credit cards with better perks, while those with lower scores may need to shop around more. It’s best to begin the research process knowing your score, rather than being declined for the credit card you want. Federal law entitles you to a free copy of your credit report from each of the three major credit bureaus every year.
Figure out what type of credit card you need.
There are typically two types of credit cards: those that offer rebates, and those that earn rewards. Some consumers choose cards to transfer a balance from an existing credit card. So think ahead: how will you use this card in the future? Which option is financially more advantageous for you?
Consider the ease of use.
Technology allows for a much more seamless transaction process. Is it easy to set up paying from a smartphone, wearable tech or voice command? Make sure these methods are covered in terms of security as well.
Decide how likely you are to carry a balance.
If you know your credit card will carry debt you won’t pay off right away, you should search for cards with low annual percentage rates. Otherwise, you could end up with card payments that don’t fit into your budget and take longer than expected to pay off. Make sure you know how much you can realistically afford in monthly finance charges and shop around accordingly.
Read all the fine print.
Thoroughly research and understand how your potential credit card will fit into your budget. You may be attracted to a card because of a zero percent APR introductory offer, but make sure you understand how long that offer lasts and what you’ll be paying in finance charges once that rate changes. Some cards include annual fees, late fees, and foreign transaction fees you should be aware of before you apply.
Look to a credit union.
Many institutions offer credit cards, but as a credit union, Cinfed can offer competitive rates along with reward programs and a great list of benefits. Our commitment to member service means we’re always ready to help and answer questions.