News & Tips
Choosing the Best Credit Card to Fit Your Needs (+ Where to Get It)
Credit cards can be an excellent tool for building credit when you’re financing purchases both big and small. In addition, most credit cards today deliver some form of benefit with membership—whether that’s in the form of accumulating points, cash back, airline miles, or other deals, consumers have a wealth of choices.
In today’s credit union deep dive, we’ll cover everything you need to know about credit cards to help you select the best one for you.
How Credit Cards Work
Opening a new credit card is an exciting event. It can be hard to fathom all the buying power behind that small rectangular piece of plastic. They give you an incredible ability: buy things now and pay them off later. Technology today also makes it so easy to buy online or through a checkout—simply swipe, tap, insert, or enter!
The first number that may catch your eye is your new credit card limit. Seeing that you have thousands of dollars to spend can make you feel like the world is your oyster. Keep in mind that any purchases that aren’t paid off in full rollover to the next month with an interest rate tacked onto them. This is why it’s best to explore all of your credit card options to get the best rates!
You can review your monthly credit card statement with all of the purchases during the billing cycle online or in the mail. It’s important to make at least the minimum payment each month by the due date to keep your account in good standing. By using your credit card responsibly, you can efficiently finance short-term purchases, take advantage of any benefits, and build credit, which can aid in future financing such as a new car or home purchase.
Key Terms to Know When Comparing Credit Card Options
When you start comparing your options for a new credit card, you will likely see a lot of the same terminology from different companies. However, understanding the terms of your credit agreement can help you get the best credit card for your unique financial situation.
A few of the more common credit card terms you will come across include:
- Annual Fee: A credit card’s annual fee is the amount cardholders pay to the credit card issuer every year that they choose to hold the credit card. Consider an annual fee to be something akin to a membership fee, where members pay to receive a benefit. Note that not all credit cards charge an annual fee.
- Age Limit: This is the minimum age that a credit card holder must be to apply. Typically, the minimum age is 18 years old. Still, many credit cards allow those younger than 18 to get a card with a co-signer, or a parent or guardian adds them on an existing account.
- APR: The annual percentage rate (APR) is how much interest you pay for purchases not paid in full within your billing cycle. Some credit cards have different APRs for balance transfers, cash advances, and penalties for not paying the minimum balance on time.
- Balance Transfers: A balance transfer is where you consolidate debt by transferring the balance from one account to another. A balance transfer can be especially useful for paying off high-interest debt and moving it to a lower-interest credit card. Balance transfers may be subject to a balance transfer fee, so always make sure to understand all the costs before proceeding.
- Cash Advance: When unexpected expenses come up, a cash advance from your credit card can be a lifeline to get you through. Cash advances often have fees associated with origination and generally incur a higher APR than your purchase APR. Credit unions are almost always going to have a lower interest rate for cash advances on your credit card.
- Cash Back: A term you will hear just about every credit card company shouting from the rooftops is a certain percentage of cash back on the qualified purchases you make. Checking out credit card offers online, you have most likely seen offers like “1.5% unlimited cash back” or something similar. Cash back is usually a percentage of each purchase that the credit card pays back to you at set intervals. Some cash back offers are direct payments sent to your account or home address in the form of a check while others are for statement credits, points, gift cards, deals, and other promotions.
- Credit Card Issuer: The institution that provides you with a credit card after an application and approval process. Credit card issuers can include banks, credit unions, department stores, and auto shops. The card issuer handles both the application and vetting process and necessary reporting to the credit bureaus.
- Foreign/International Transaction Fee: Most credit cards will charge an added fee when the card is used in a foreign country. Foreign transaction fees for credit cards typically run between 1% and 3% of each purchase.
- Joint Account Holder: Many credit cards will allow you to add a joint account holder to the card, usually by issuing an additional credit card in the joint account holder’s name. Both parties would then be responsible for covering any charges made to the joint account.
- Late Payment Fee: Credit cards have a minimum payment that is due each month. The amount can vary depending on the card and how large the balance is. When the minimum payment is not made by a certain date, the card may charge a late payment fee.
- Minimum Finance Charge: Credit cards charge minimum finance charges when the accrued balance is below a certain threshold. For example, if your institution charges a minimum finance charge of $0.50 and you had $15.00 in charges for the month, you wouldn’t pay the minimum finance charge. However, if you did not charge anything in the month, you would pay the $0.50 minimum finance charge.
- Minimum Payment: Credit cards require a minimum payment as the smallest amount that must be paid on the card’s balance to remain in good standing and avoid late payments or other penalties.
- Payment Processor: What you think of as the credit card company, such as Visa, Mastercard, Discover, and others, is the payment processor. Payment processors provide a link between your card’s issuing financial institution and the merchant’s. Whenever you swipe your card, the processor checks out the request, applies the charge to your credit card, and pays the merchant.
- Variable Rate: A variable APR is a rate that can fluctuate throughout the year. When rates do change, the credit card issuer must provide notice with regard to rate adjustments. Variable-rate credit cards can be ideal in an economic environment where interest rates are falling.
Understanding the key terms with credit cards is going to give you a definitive advantage as you run through your options for the best credit cards. There are several different types of credit cards, which we’ll look at next that can affect how each card is able to be utilized to fund everyday purchases.
A Look at the Different Types of Credit Cards
There are literally thousands of different credit cards out there that all promise to be the card of your dreams. So how do you tell one card from the next? First, you need to categorize the credit cards by type so that you can truly make an apples-to-apples comparison.
0% and Low-Interest Credit Cards
“0% introductory APR” is another advertisement you have likely seen with different credit cards. Those with interest-free financing periods can be very beneficial, especially if you foresee a large purchase in the near future or even just to save on everyday purchases. 0% introductory APRs usually last between 6 months and a year, but some can go even longer. Remember, 0% introductory offers are just that, so they will have a finite lifespan.
Getting a card with both a low interest rate and a 0% introductory APR is the best way to save money over the long term, especially when you charge a lot to your card. Paying off charges during the 0% interest period means you are essentially borrowing money for free. Utilizing a low interest card thereafter can help you cut down on financing costs and pay down debt faster. SCCU’s Visa® Low Rate Credit Card is great when you tend to carry a revolving balance and want to enjoy lower rates with no hidden fees.
Benefits and Rewards Credit Cards
When you have your heart set on earning cash back, points, miles, deals, or other benefits, a rewards credit card is likely the best bet for you. Rewards cards will generally provide a base cash back rate that applies to everything purchased on the card, many with specialty categories that can earn even greater rewards. Rewards credit cards can be a good match for those that usually pay off their balance each month as the APRs for these cards tend to be higher.
Certain cards provide different rewards categories, so choose the one you will most likely benefit the most from. Common rewards purchase categories you are likely to see include gas, travel, groceries, and dining. For example, if you love eating out, a rewards card that gives you 3% cash back on all your purchases at restaurants could provide a good-sized return.
There are generally two tiers of rewards cards related to how cash back is earned. With SCCU’s Visa cards, these are the Visa Signature® and Visa® Platinum. The SCCU Visa Signature Credit Card provides a host of benefits including exclusive experiences, deals on merchandise, cash back, and travel rewards. The SCCU Visa Platinum offers the low rates of a credit union credit card and a solid 1% cash back33 across the board on all qualifying purchases.
Secured Credit Cards
Secured cards are great for individuals who have never had a credit card or for those that have a low credit score. A secured credit card is one that uses another account as collateral against the purchases made on the credit card. SCCU Visa® Secured cards help those looking to establish or build their credit by utilizing their SCCU savings account balance as collateral. A secured credit card will operate as an ordinary credit card, just with a deposit required to start making purchases.
Credit Cards for Businesses
Credit cards for businesses are a smart way to finance short-term needs or even large purchases. Business cards tend to have similar terms and conditions as a consumer credit card, but the card is issued to the corporate entity with officers and other authorized individuals who are allowed to make purchases on the business’s behalf.
As well, business credit cards can be issued to employees to create a streamlined process for expenses. Just like consumer cards, there are many different options for businesses and the same considerations for choosing the best credit card for every unique financial situation applies.
The SCCU Business Visa® Platinum Credit Card is a low interest card that still earns 1% cash back rewards33, has no annual fee, no balance transfer or cash advance fees, and special introductory rates. Savvy business owners can reap the benefits from having a card to pay for everyday expenses like supplies and postage, which can really add up in available cash back rewards.
Student Credit Cards
There are a lot of credit cards that require the applicant to be over the age of 18, but some financial institutions and particularly credit unions offer credit cards made just for younger card holders. SCCU’s Visa® Student Credit Card for students between 15 and 18 years old is an excellent way to start building credit and to teach young borrowers wise money habits. A parent or guardian acts as a co-signer for the student and typically needs to have a savings account deposit as collateral.
Steps for Choosing the Right Credit Card
Choosing the best credit card for your unique situation can seem daunting based on all the choices out there. That’s why the team at SCCU has narrowed down a quick series of steps to help you get in, get the credit card you need, and get on with your day.
Follow our outline below to help organize the information you need to decide which credit card is right for you.
- Know Your Credit Score: One of the first actions you need to take when it comes to shopping around for credit cards is to be aware of your credit score and overall credit report. When you have a good score, you are more likely to get better interest rates and better offers from credit card companies. When you have less than perfect credit, you don’t need to fret. There are many steps you can take ahead of time that will help to start improving your score.
- Check with the three major credit bureaus to request a free copy of your credit report. Review these reports in detail, as there are sometimes errors on the report that you can dispute and thereby raise your score. Other avenues can be to work to pay down other debts, avoid missing payments, and increase the average age of your credit accounts. With a little foresight, you can put in a bit of financial legwork ahead of time and really provide a great benefit when you’re ready to apply for a credit card.
- Understand Your Financial Needs: Remember above, we went through different credit cards that provide different benefits/uses. Some cards can help students get a credit card, others maximize rewards, while some have super-low interest rates. The best part of a credit union credit card is that you can generally get great rates and rewards all in one card. Thinking about your future financial situation can help you pinpoint which card type is best during this season of your life.
- For example, if a card has a great introductory offer like “get $500 back when you charge $1,000 in the first 90 days,” you can really save if you have a large purchase in mind. Also, many credit union credit cards come with 0% interest for a certain period after signing up. Even beyond the introductory period, earning cash back and taking advantage of low interest rates can translate into big savings for your purchases throughout the year.
- Know Your Credit Card Options: Within those different credit card choices, you need to be asking the right questions to make sure each will fit your situation.
- Student Credit Cards - For student or secured credit cards, ask the issuer how the card will aid in building your credit. As well, ask what happens in the future and if you will have the opportunity to upgrade to better terms.
- Low Interest Credit Cards - If you are looking at low interest or 0% cards, ask exactly how long the introductory period lasts and what the interest rate is thereafter. You should also know how balance transfers or cash advances work with these cards, as both actions may be necessary at some point.
- Rewards Credit Cards - When rewards are your chief driving factor, make sure to ask exactly how the system works. How easy is it to spend the points you earn? What purchases are “qualified” for cash back and rewards? The more you know about the details of the program, the better position you will be to make the best decision for you.
- Make a Decision Based on Total Received Value: The best credit card for you is one that has the features that are going to meet your unique financial and lifestyle needs. Therefore, making your decision a value-based one will help you cut through the options in the most beneficial way. After progressing through Steps 1-3 above, you may have narrowed down your choices to just a few cards. Choosing based on value can therefore be the deciding factor in your decision.
Certain cards will carry certain inherent benefits that can really help propel what you receive by applying. Benefits can include things like free card controls, liability protection, fraud alerts, zero fees, free access to credit scores, contactless payments, low rates, and even identity theft protection and roadside assistance. Humble brag, you’ll find each of these benefits with every one of SCCU’s Visa credit card options.
What to Do When Your Credit Card is Lost or Stolen
According to a 2021 Identity Fraud Study by Javelin Strategy & Research, about 49 million American consumers fell victim to identity fraud last year. Cybersecurity and credit cards need to go hand in hand today. That’s why SCCU is so serious about protecting our cardholders from cyber incidents. With all of our cards, we include ancillary protection like free card controls, Visa’s Zero Liability Protection14, fraud alerts, and most importantly, ID Navigator from Norton LifeLock46.
ID Navigator constantly patrols the dark web for your personal information that may be at risk. Norton LifeLock provides tools and resources to keep you informed about any threats to your identity so that quick action can be taken. If your identity is ever compromised, you’ll have experienced identity restoration specialists available to help you quickly recover.
The bottom line is that SCCU has your back no matter what. If your card is lost or stolen, you can quickly report a lost or stolen card and make sure no further damage occurs. For more information on fighting fraud, you can also visit our Fraud Prevention Center.
Applying for a New Credit Union Credit Card in Minutes
At SCCU, we’re all about making things as easy as possible for our members and think that applying for a new credit card should be no different. When you’re ready to apply, simply fill out a quick online application, and we'll pull your credit information to see which credit cards best meet your individual needs.