How To Choose The Right Credit Card

Did you know a credit card is actually considered a loan? Many people don’t think of a credit card as a loan, but it’s essentially a line of credit you can borrow from as-needed, and then pay back based on a predetermined schedule.

As with any loan, you want to consider several different factors to ensure it’s the right loan for you.

Interest Rate
Every credit card has an Annual Percentage Rate (APR). This is the cost of borrowing against your line of credit if you don’t pay the whole balance off each month.
Minimum Repayment
If you don’t pay off the full balance each month, you will be required to repay at least a minimum amount. This is typically around 3% of the balance due.
Annual Fee
Some cards charge a fee each year simply for the use of the card. This fee is typically charged the same month every year and added to your balance due. Therefore, if you do not pay the annual fee in full when it appears on your statement, you will also end up paying interest on the annual fee.
Fees
Check the credit agreement to determine fees that may be incurred when using the card. For instance, there are typically fees for spending over your credit limit, for using the card abroad and for late payments.
Loyalty Points, Rewards & Cash Back
Some cards give you points to use toward merchandise or trips, or may refund cash to your card depending on your card usage. If the card offers rewards, check how and where the rewards can be used and think about how likely you are to use them. If it’s a cash back card, make sure you are likely to qualify for it. For example, it may only apply if you pay your balance in full each month. A lower interest rate may be a better deal.

Learn more about credit cards offered by UNITE Credit Union including our hassel-free MasterCard.

How To Choose The Right Credit Card

Interest Rate

Minimum Repayment

Annual Fee

Fees

Loyalty Points, Rewards & Cash Back