Why a credit card is a great addition to your wallet and how to choose one

Credit Card couple 2

Cash is scary. You have no protection if you lose it. It’s an easy target for theft. Carrying a credit card can protect you from much of those troubles. In addition to being accepted in more places, credit cards have fraud liability protection built into them. You’re only liable for a portion of the total loss. Depending on your credit card, you might not be liable for any of the fraudulent activity on your account.

Carrying a credit card (and using it responsibly) can help build your credit score. Even having a card “for emergencies” can help provide you with peace of mind. There’s no security downside either.

Knowing that a credit card is right for you doesn’t tell you which credit card is right for you, though. With so many of them out there, it can be difficult to sort out what’s relevant from a sales pitch. Here are a few important points to focus on when considering your options. You want to pick a card that gets you the features you want while paying as little as possible for it.

1. No annual fee: The convenience of a credit card is a fantastic option, but it’s hard to justify paying a ton for it. Fees can sometimes be as high as $500. These are charged automatically to your card. If you’re not paying attention, they can put you over your credit limit or leave you with a balance and unexpected payment coming due. Find a card with no annual fee to avoid these risks.

2. Rewards: Conventional wisdom says you should choose a card that offers a competitive rewards program. That way, you can charge everything to that card for maximizing your rewards potential. If you pay off the balance in full each month, you get all of the upside without the potential risks. Rewards programs are nice, but they shouldn’t be a deciding factor in picking your credit card. Treat your rewards credit card like a bonus, but don’t plan your financial habits around it. You might get a few gift cards you can use for a nice perk every now and again, but you’ll save money if you focus on less costly credit cards.

3. Low financing fees: This is the most important factor in choosing between cards. You want to find the lowest cost for your credit services. This is made of two factors: grace periods and APR. A grace period is a time between a charge and interest accumulation. On average, these are between 28 and 30 days. (IMCU credit card grace period is 25 days after the closing date, before payment is due.) This gives you time to pay the balance without being charged any interest. APR is the interest rate. This is the percentage of the balance that will be added to your bill each month. They are usually fairly high, running between 17 percent and 27 percent. Credit cards offered by IMCU are much lower than that. For complete details, visit imcu.com/credit-cards.aspx. You want a lengthy grace period and a low interest rate. These two factors are critical to getting the convenience and security of a credit card without paying too much for it. Shop around for a credit card that gives you time to pay it off and avoid interest. A low interest rate when you can’t pay it in full would then complete the package.

While there are a lot of credit cards out there, IMCU offers a simple credit card program that features low interest rates. Because it’s offered through an institution you know and trust, you can be sure there’s nothing in the fine print that will come back to bite you. Call or stop by to apply for an IMCU credit card today to start enjoying the convenience and security with a name you know and trust.

SOURCES:

http://credit.about.com/od/ac/g/annualfee.htm

http://money.msn.com/credit-cards/article.aspx?post=95b88404-e920-4be6-8d96-f8d4efb24f28

http://credit.about.com/od/creditcardbasics/qt/The-Basics-Of-Rewards-Credit-Cards.htm

http://credit.about.com/od/creditcardbasics/bb/choosecard.htm

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