Picking a Credit Card to Match Your Lifestyle
If you’re on the hunt for a new credit card, you may be overwhelmed by the numerous options available on the market. Both financial institutions and retail stores offer credit cards with different reward systems, interest rates and perks.
Before you shop around for a new credit card, first determine your main purpose of getting a credit card and how you plan to use it every month. Ask yourself these questions:
Aside from answering these questions, understanding the different kinds of credit cards will also help you narrow down your options.
Traditional Credit Cards
All traditional credit cards have a spending limit that is determined by your credit history. With traditional credit cards, you can pay your balance in full every month or pay it over time.
If you decide to pay it over a period of time, you will need to make at least one minimum payment every month and your remaining balance will start to accrue interest charges. At this point, you should also ensure you will not miss a payment to avoid a late fee charge and a sudden drop of your credit score.
Sometimes people mistakenly think charge cards and credit cards work the same. One big difference they have is that charge cards can only be used at the issuing retailer. Also, the interest rate on charge cards is typically higher than a traditional credit card, so it is usually best of card balances are paid in-full or within a short period of time to avoid unnecessary interest charges.
This type of credit card is mostly issued to people with little to no credit. A secured credit card will require a deposit in a money market or savings account that is placed on hold while the secured card is active. The amount you deposit is equal to your card spending limit. For example, a $500 limit will require you to have a $500 deposit.
If the user fails to make payments, the issuing bank will withdraw the amount due from their savings or money market account.
Financial institutions typically partner with airlines or retailers to issue a co-sponsored card. These credit cards offer many reward bonuses and perks for people who frequently use their credit cards or spend a certain amount of money specifically with the joint retailer. Most of these co-sponsored cards require users to pay annual fees.
Why Choosing a Credit Card Matters
Since not all credit cards are created equally. It’s crucial that you choose the credit card that benefits your personal spending habits the most. If you plan to spread your payments over time, you should look for credit cards that have a low-interest rate or offer a 0% interest rate for a set term.
At CCCU, we offer credit cards that are designed to match your needs and maximize your earning potential no matter how and where you shop. Call us at 702-228-2228 to learn more about our credit cards or visit CCCULV.ORG and select Credit Cards to compare each credit card.