What kind of credit card user are you? Understanding your spending and payment habits will help you determine the right card. 

When choosing a credit card lots of factors can come in to play, but the most important element is making sure the credit program you choose supports your short-term financial goals while protecting your long-term financial wellbeing. 

Ask yourself this question: “Will I spend only what I can afford, and will I make it a priority to pay off my credit balance in full, every month?” 

If you answered “Yes, I will pay it off in full, every month,” then you are a great candidate for a card that offers you the ability to earn maximum points on your purchases for travel, merchandise, or cash back rewards. These cards typically have an annual fee, but the earnings potential on a higher rewards program can offset the annual cost. If you dine out often, a card that rewards dining purchases is a better fit for your lifestyle. If you travel often, look for a good travel rewards card so you can earn points on every trip. Some cards offer special transaction rewards or double/triple point time periods. 

Do your research - the best credit rewards programs offer maximum points potential combined with a low annual fee and a great rate.  Learn about Visa Signature: The better travel card.

If the honest answer is “No, I don’t think I will (or can) pay off my balance in full every month,” don’t worry. You would be among the majority of credit card holders, also called “revolvers,” who pay less than the balance due and carry the balance from month to month.  

If you are likely to carry a balance, it is important to apply for a card with the lowest interest rate you can, and work toward paying off your balance as soon as possible. Beware of special low introductory rates which adjust to much higher rates after a short period of time. If you choose a card with a low introductory rate, make sure you can pay off your balance before the rate adjusts.   

When you find a lower interest rate card, check the card’s balance transfer fee and consider consolidating other credit card balances to the lower rate card. Then work hard to reduce your balance. Having just one credit card account is much easier to manage.

Pay more than the minimum! Avoid the temptation to only pay the minimum each month which can stretch your debt out for years, costing you dearly in interest charges and fees over time. 

Though harder to find, some lower interest rate cards also let you earn points toward travel, merchandise or cash back rewards. Look for a card that has free rewards or a low annual fee and make sure you understand when your points expire. Learn about Visa Platinum: A great rate with free rewards.

Do you need to build (or rebuild) your credit? If you are just starting out or working to improve your credit situation, it may be necessary to start with a credit card that is designed to build credit. The most important thing you can do with your new card is pay at least the minimum due on your account balance each month, and always pay on time. Make it a goal to pay more than the minimum as often as you can and pay your balance off as soon as you possibly can. Establishing a good history of on-time payments is critical to improving your credit standing and your options for future loans or better rates and rewards. Learn about Visa Access: The credit builder.

Having a healthy relationship with credit all comes down to responsible card use. Use your credit only when you have a good plan for paying it off and pay your bills on time.  To learn about the Greenville Federal Credit Union family of Visa credit cards please visit our website: www.greenvillefcu.com/credit-card-options or stop by any branch to talk to a Member Specialist about your credit options. 

*Federal Reserve’s G.19 report on consumer credit for May 2018 
1 Ryan Guina, Nov. 2018, CashMoneyLife.com