Three Simple Questions:
Choosing the Right Credit Card
Having plenty of choices is great. But too many choices can make your head spin. If you’re shopping for a credit card, you feel overwhelmed. Should you find a card with no annual fee? Or choose one with lower interest rates? What about the credit cards that offer rewards?
Ask yourself a few key questions to help hone in on the card that works best for you.
Question 1: How’s your credit?
If your credit score needs improving, you may discover that your choices are already limited to credit cards with low balance limits or that are secured, for example. On the other hand, if your credit score is high, you can expect extra perks and shop around for them. (Don’t know your score? Check it for free at AnnualCreditReport.com, a federally authorized site, or, if you’re a Momentum or Prime Checking accountholder, you can get a credit report for free!)
Question 2: Are you likely to carry a balance on your credit card?
If so, ensure you pay as little interest as possible with a card with a lower interest rate. For example, InTouch Credit Union’s Platinum MasterCard® has no annual fee and currently offers an APR* of 8.75%. You won’t get the rewards that come with other, higher-interest options, but you’ll likely save more in interest in the long run.
Question 3: How much do you spend every month?
If you use your card for most of your purchases, pay your balance in full every month, and have good credit, then a credit card with rewards may be your best bet. Choose a card that offers the kinds of rewards that you want. A card that only earns airline miles, for example, isn’t a bargain if you don’t travel much.
InTouch Credit Union’s Platinum Rewards MasterCard® and World MasterCard® offer points for purchases, which can be redeemed for cash back, gift cards and merchandise. The World MasterCard charges an annual fee, but earns rewards faster and provides other perks, like Lost Luggage Coverage and Return Protection. If you use your card only rarely, that annual fee may not make sense; if you’re likely rack up a lot of points or use the extra perks, the fee could be money well spent.
Once you’re clear on the kind of card you need, spend some time comparing rewards programs and extra perks. InTouch Credit Union offers a great side-by-side comparison of its credit cards here.
(*APR means Annual Percentage Rate