For many Americans, credit cards are essential to everyday life. Some people even designate particular cards for certain types of purchases, i.e., one to buy gas for the car, another for booking flights and so on. On the other hand, a growing number of consumers charge all their monthly expenses to one card and then pay the entire statement balance off at the end of each billing cycle to avoid accumulating interest charges. Aside from determining the best strategy for using your card, it can be difficult just to decide which card will work best for your particular needs.
What to Know When Choosing a Credit Card
To be credit savvy, it’s a good idea to study the details of each card you are considering before you fill out the application. Some key questions to consider when evaluating card options include:
Does the card have an annual fee?
What other fees are attached to the card? Under what circumstances will you be charged?
What is the card’s interest rate?
Does the company offer balance transfers with special rates?
Is the credit card the only service you have with the company?
It is essential to answer these questions for each card you are thinking about applying for; comparing these details for each card will be crucial to the final decision you make.
Are Credit Card Rewards Worth It?
When shopping for a credit card, it is important to consider the details mentioned above, but perhaps it is just as important to research the rewards program associated with the card – or cards – you are considering. First, determine whether the card will be used often enough to earn meaningful rewards. If it will be, your next step is to review the specifics about how to earn and redeem those rewards points.
While some programs target individuals who are frequent travelers or who use their cards for a variety of entertainment purchases, today most companies also offer points for items bought outside these categories.
What About Cash Back Rewards?
As you are probably well aware, one of the most popular rewards point redemption options is simply to offer the card holder cash back, which is earned based on eligible purchases made with the card.
If a rewards program offers cash back, be sure to find out what percentage of the card’s purchase amount will be earned back in cash. Plus, it is crucial for you to know what the company considers an “eligible” purchase. This includes verifying if there are any minimum spending limits you are required to meet to earn points for purchases and if only certain types of purchases earn those points. For example, cash advances may not earn points.
Let Us Know How We Can Help
Keep in mind, talking to a banker is a great way to find a credit card that will work best for you on all fronts. We can connect you with an experienced financial professional who can help clarify the benefits of each card we offer, as well as offer advice on which card program will help you maximize the benefits and rewards for your particular lifestyle.
It’s also important to remember that while there are many companies with credit card offerings, community and local banks often offer card products with local customer service and support. For instance, Central Bank owns and manages its own credit card program1 while also offering a wealth of other products and services.