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At the big box store or your favorite shop at the mall, it seems like everyone these days is trying to get you to sign up for a credit card! Choosing the right credit card for your lifestyle can be hard when there are credit card offers all around you.

What is the right card for you? The answer might be at your local credit union. Let’s take a look at six things that can help you decide if a credit card is right for you.

Before you get a new credit card, consider:

1. Spending habits
2. Card benefits
3. Credit score
4. Credit limit
5. Interest rate
6. Fees

Spending habits

Your spending habits can help determine the best credit card for your lifestyle. Chances are you already have at least one credit card in your wallet. What’s your history with that card? Will this new card be different? 

• Are you going to carry a balance or looking for a balance transfer?
• Will this be your everyday card?
• Are you looking only for a credit card to have on hand in case of emergencies?

Once you know why you need a card, it is much easier to weed out those tempting-but-not-perfect offers. For example, if this is an emergency card, those extra perks some cards offer won’t be as important.

Card benefits

Whether you’re looking for points to use for swag and air miles or a credit card with cash back options, incentives definitely sweeten the deal when it comes to choosing your card. But don’t get wrapped up in the perks. Incentives are not a reason to overlook a high Annual Percentage Rate (APR) or to overspend.

Make sure you’re choosing wisely. Ask yourself:

• Does your card have rewards that expire?
• Are there different point values based on the different items you purchase?
• How easy will it be to redeem points?

If rewards are a deciding factor for you, make sure you understand how and when you accrue points, when they might expire and how you can use those points.

Credit score

Your credit score can affect not only the limit on the credit card, but your rate. Also, having a variety of loan types, like a credit card and auto loan, reflects positively. Having ten credit cards, not so much.

Opening credit cards can also have an impact on your credit score. Avoid opening a lot of credit at once. Each time you have your credit pulled, you can have a small dip in your credit.

Credit limit

Your credit limit is the amount of money that you can borrow or put on your credit card. When looking for a credit card, be careful thinking a smaller limit is a good reason to get multiple credit cards.

One credit card with a $5,000 limit is not the same as five credit cards with a $1,000 limit because each of the five credit cards are most likely at different APRs and have different terms and conditions.

As you develop a good history of paying back the credit card and building a relationship with the credit card company, your credit limit may increase. 

If you are just starting on your financial journey or are repairing bruised credit, be prepared to have a smaller credit limit. Your credit score is also a determining factor in your limit.

Interest rate

The interest rate, or APR, is one of the most scrutinized card features. And, for good reason! The APR on a credit card is the cost of borrowing on the card if you don’t pay the balance off each month. The higher the rate, the more it will cost you.

As a member-owned financial institution, Numerica Credit Union tends to offer better rates on credit cards and loans than most big banks. Since Numerica is not-for-profit, earnings are paid back to you through better savings rates and lower loan rates.

When you choose a credit union credit card, you might be getting a lower rate. Something to think about, especially if you plan to carry a balance.

Fees

Nearly all credit cards charge for the convenience of not having to pay a balance in full (also known as a finance charge), and some credit cards may charge an annual fee. If you’re leaning towards a card with all the bells and whistles, don’t be shocked if there is an annual fee. That fee might be worth the extra amenities.

Making your payment early will help to avoid many fees and penalties. In fact, making payments on time can account for up to 35 percent of your credit score.

For some credit cards, missing a payment can also increase your APR, which can cost you much more than a late fee in the long run. Help to avoid late fees by choosing a credit card company that makes payments easy. For example, Numerica has many options including our Mobile App and Online Bill Pay.

Other common charges include fees for balance transfers or making a payment over the phone.

Numerica offers several options for credit cards to fit your needs. Come see us at your favorite Numerica branch or give us a call at 800.433.1837.