Applying for credit cards can be tempting for many of us, especially when some stores and
companies offer incentives to lure us in. Don’t get us wrong – credit cards are a great convenience, but
they are also borrowing money that must be repaid. Here are 5 factors to keep in mind as you get your
credit card and use it.
Five Things to Consider
Annual Fees — Annual fees can vary from zero to $75 per year. Typically, the more
you pay in annual fees, the more perks you receive as a cardholder. Try to choose a card with the
lowest fee available, while offering you the benefits that best meet your needs.
Penalties — The penalties for violations such as late payments and going over the
limit vary from card to card. In addition to these penalty fees, some cards may also subject you to a
penalty interest rate – the high default interest rate. Be sure to check the terms of the credit card
agreement, especially if you are occasionally late with a monthly payment.
Interest Rates — Be mindful when you see low "teaser" rates, for new
cards or for balance transfers. A card company is only required to offer introductory rates for the
first six months. Some may extend it for more than six months, but be sure to know what interest rate
you will be paying after the introductory period ends.
Rewards Programs — Some credit cards offer cash back, airline mileage, discounts on
travel, electronic gifts, discounts on cars and other benefits. A rule of thumb is that the benefits
are usually worth about 1% of the charges. If a card with these types of benefits is important, make
sure the benefits are those you will use and that the other aspects of the card do not offset the
Chip Technology — Banks and card companies in the U.S. are now converting more and
more of their cards to include chip technology to offer their customers a higher level of security and
a smoother experience when using credit cards overseas. If you’re in the market for a new credit card
and you frequently travel abroad, consider looking for one with an embedded microchip.
One of the exclusive benefits of BFSFCU® membership is our line of Visa® Credit Cards. In terms of savings, our credit
cards offer competitive rates and no annual fees. We also offer My
Card Rewards so that you can earn points or money back, just for using the card.