August 10, 2022

3 Questions to Ask Before Choosing a Credit Card

Keep these questions in mind when choosing a credit card.

Does this card fit my credit score needs?

Not all credit cards affect your credit score equally. Make sure you pick one designed to meet your specific needs. Looking to build or rebuild your credit? A student credit card or a secured credit card may benefit you. Student credit cards are easier to qualify for than other types of credit cards. Secured credit cards are another great opportunity to build a good track record. These cards typically have low credit limits and you may have to pay a deposit. However, if you complete your payments on time, you may eventually be able to transition to a traditional credit card with a higher credit limit and better rewards.

What is the card’s APR?

If you don’t pay your balance in full, your credit card interest rates will apply. An interest rate is the amount it will cost to borrow money from your credit card company. It is important to take the interest rate into account if making partial payments or minimum payments is something you see yourself doing, as interest will begin to accrue daily. You can determine the rate per day by dividing the card’s APR by 365 for each day of the year. Then, multiply that number by the balance due to determine the total interest you will be paying daily. Note that interest compounds daily, so you will be paying interest on your account balance as well as the interest you have already accrued.

Are the rewards useful to me?

Finding a credit card with rewards useful to you is a key component of maximizing the benefits of using a credit card. Doing your research about the rewards of the cards you are considering is a great place to start. Failing to learn about the rewards your credit card offers may result in leaving great benefits (or even cash) unused. Flight miles and cash back are some typical reward offerings.

Looking for more advice before opening a new line of credit? The helpful and experienced staff at Citizens First Bank are here to help. Give us a call, or stop by your local branch location today!