Choosing a Credit Card

Answering the question what credit card should I get is a lot easier when you know what to look for. The right card can save you money in interest and annual fees, offer perks like cash back and rewards, and ensure protection so you’re not surprised by (and responsible for!) fraud or unauthorized spending. 

Before you apply for credit, learn what criteria you should use in choosing a credit card. 

Keep reading – we’re covering everything you need to know before you get your next card. 

1. Annual Fee 

Some credit cards don’t charge any annual fee, while others can charge fees as high as $600 or more a year! Sometimes, cards with higher fees might have better rewards programs, but that’s not always the case. 

Don’t just assume that paying an annual fee will be worth it in the long run. Look at your spending and the perks you receive from your current card. Then, look at the rewards you might get in return for your annual fee. This can help you determine if your spending habits justify paying a large fee each year, or if a no-fee card might be the better route to take. 

The Island Federal Credit Mastercard has competitive low-rate interest and no annual fee, and you can earn great rewards when you spend with it. Bottom line, make sure you do your homework before applying for the next “pre-approved” card offer you get in the mail.

2. Intro APR vs. Actual APR  

Annual Percentage Rate (APR) is how much your credit card company charges you on unpaid balances each month. The higher the rate, the more they’re going to charge.  

Some credit cards will try and lure you in with a low “introductory rate” that’s only applicable for a certain amount of time. Then, your card will likely drastically increase to a higher interest rate. 

Island Federal offers a credit card calculator so you can see how a change in rate can affect your monthly payments. You can also use it to figure out how long it’ll take you to pay off your current balance.  

3. Balance Transfer 

This one can be tricky. A “balance transfer” is the amount of debt you want to bring over from a current, existing, usually high-interest credit card to a new card that may offer low or no interest for a set time on transferred debt. While this can be an effective way to pay down, or ideally off, credit card debt faster, there are a couple things you should look out for. 

  • Balance Transfer Fees: Some credit cards charge a Balance Transfer Fee. This is typically a percentage of the balance you’re transferring. Other providers waive this fee, so it’s important to ask what, if any, transfer fees may apply when you’re wondering what should you look for when choosing a credit card.
  • APR on Balance Transfers: Here’s where credit card companies can get sneaky. That amazing introductory rate you signed up for may, or may not, be applicable on your balance transfer. Even if a new card company offers “no fee on balance transfers,” you may end up paying a pretty penny on the high interest APR they’ll charge you on the money you brought over. If you plan on bringing a balance with you to your new card, check to see if the special intro APR is applicable to both new purchases and balances transfers. It’s also worth asking how long that great rate will last, and what the interest will adjust to once the introductory period ends. 

If this all seems confusing, don’t worry – you aren’t alone! You can always talk to a Member Services Representative at your local Island Federal Credit Union branch. We can help you run the numbers and let you choose the best option for you. Learn more about Island Federal’s credit card offers today.

4. Rewards 

One of the main perks of using a credit card is the potential to earn rewards. But be careful, as not all reward programs are made equal. 

Do your homework and find out if your card’s rewards can be used for cash back, or if they can only be exchanged for gift cards to select vendors. Additionally, when choosing a credit card, you should also check to see what the points-to-dollar ratio is so you can make sure your money is working for you and earning you the most possible. Island Federal Members can enroll in the uChoose Rewards to earn cash back points on every purchase. 

5. Security & Features

In today’s digital world, credit card thieves and hackers are using all sorts of new tricks to steal people’s credit cards and identities. Credit card fraud is rampant, and the last thing you want is to find yourself needing to deal with fraudulent charges, huge bills, and repairing your credit. 

Find out what type of customer service and security your credit card comes with. Check to see if they offer features such as free credit monitoring, fraud protection, real-time usage alerts, and the ability to turn your card on and off from your phone, instantly, if your card is ever lost, stolen, or misplaced.

Island Federal Credit Cards

Credit cards can be a great way for you to manage your spending while helping to improve your credit score. For more information on credit card best practices, contact a Member Service Representative at your local Island Federal Credit Union branch or call us at (631) 851-1100.