There are a TON of options out there when it comes to credit cards. Every consumer’s needs are unique to their purchasing habits, and there is no “one size fits all '' credit card. Listed below are a few red flags to look for before applying for a new credit card.
1. Credit cards with high fees that are charged even if you don’t make a purchase.
Watch out for credit cards with fees such as account set-up fees, program fees, participation fees, additional card fees, and credit limit increase fees. Paying a fee just to have a credit card is something to think twice about.
2. Credit cards that don’t report your payment status to credit bureaus.
If you are working to build or rebuild your credit history, a credit card that does not report to major credit bureaus won’t be any good to you. Since the payment history for that card won’t appear on your credit report or in your credit score calculation, your positive payments would not help you build a positive credit history. Click here to learn more on the three credit bureaus and how you can access your credit report.
3.Credit cards with high interest rates won’t do you any favors.
A credit card interest rate is the price you pay for borrowing money. For credit cards, the interest rate is generally stated as an annual percentage rate (APR). The higher the APR, the more it costs you to carry a balance on that card. In perspective, 25% APR could be considered an average high interest rate, while 11% could be viewed as an average low interest rate. Dakotaland FCU offers a Visa credit card to an incredibly reasonable rate with an APR as low as 9.9%. Apply for free today by clicking this link.
4. Credit cards that don’t offer a grace period.
The grace period is the gap between when your billing cycle closes and when the bill is due and interest begins to accrue. Even if you pay off your credit card in full each month, you can still use the grace period to stretch the time you have to pay for purchases without incurring interest.
5. Credit cards with “Introductory Offers”
There are many attractive offers out there to entice you to apply for a credit card or to transfer a balance from one card to another, such as zero percent interest. You may not want to avoid these offers, but it’s best to proceed with caution. Introductory means the offer is only good for a period of time. The question you need to ask is what happens to my interest rate after the introductory period ends.
6. Credit cards without rewards programs.
If you are planning to use a credit card, why not use one that rewards you for your patronage? Redeemable shopping points, cash back, air flight miles, travel perks, etc. are all common rewards programs available on the market. Depending upon what is most important to you, you could sway more toward one card over another. Another good thing to know is how your rewards are earned and tracked, how they’re redeemed, and when they expire.
Utilizing a credit card is a great way to build and boost your credit card, but it is crucial for consumers to be aware of the ins and outs of what having a credit card entails. To learn more about what credit card is best for you, stop into your local Dakotaland to visit with a Member Services Representative, or check out our website to learn more.
