In the digital age, a credit card—particularly, a credit union credit card—is an indispensable financial tool that, when used judiciously, can help you immediately access funds, manage your expenses, establish a credit score, and even earn rewards.
But with so many credit card options available, how do you even begin to find the best credit union credit cards for you?
To help you avoid the all-too-common credit card choice paralysis conundrum, we’ve created a step-by-step guide that both first-timers and seasoned cardholders can leverage to navigate the credit card selection journey with confidence.
Step 1: Check Your Credit Score
Your credit score is a numerical rating of your financial trustworthiness. This score, ranked on a scale of 300-850 (with 850 being the best) is based on a variety of factors, including:
- Payment history
- Debt to income ratio
- Credit utilization ratio
- Number and type of loan accounts you have
- New applications for credit
- Whether you’ve had debt sent to collection, foreclosure, or bankruptcy
At its essence, your credit score reflects the confidence creditors place in your ability to repay a loan promptly and in its entirety.
In the context of credit cards, the credit score is often the first thing a financial institution will check before granting access to their card. It acts as a gatekeeper, determining the types and tiers of cards you’re eligible to apply for.
Typically, the higher the credit score, the better the card, which often translates to more lucrative rewards, lower interest rates, and higher credit limits.
Step 2: Determine Your Needs for the Credit Card
A credit card can be multi-purpose, accomplishing several financially related functions. However, while some cards may effectively be jacks-of-all-trades, others are more niche, designed to cater to a specific purpose.
- Credit improving card – For people who don’t yet have a credit score or who have a less-than-ideal score they wish to improve, there are what’s known as secured credit cards or student credit cards. These types of cards often have lower eligibility requirements and may come with features that are intended to help users master their credit card usage.
- Interest-saving card – These types of cards often have a 0% introductory APR and months of zero interest. This is ideal for savers who want to pay off existing debts or finance new purchases.
- Rewards card – If you have a solid credit score and little outstanding debt, you might consider a rewards card. Rewards cards allow you to earn points, miles, or cash back on purchases, with rewards multipliers for specific spending activities, such as dining or travel. Moreover, top-tier rewards cards may come with a host of tertiary benefits, such as:
- Travel insurance
- Concierge services
- Exclusive access to events
- Airport lounge access
Step 3: Select the Card Offering the Most Value
The right credit card for one individual may be wildly different for another. It all depends on your credit history, finances, and direct needs from the credit card.
However, once you’ve determined your priorities, you can narrow down your options to two or three similar cards. After that, you can more easily compare and contrast features, pricing, and rewards to eventually find the card that’s best aligned with your immediate needs.
Step 4: Use the Card Wisely
A credit card can be a double-edged sword. When handled responsibly, it represents a powerful tool for managing and boosting your financial standing. However, if misused, it can quickly become a liability, potentially leading to debt and negatively impacting your credit score.
To use a card wisely, follow these tips:
● Try and pay off the balance in full each month
● Don’t max out the card
● Avoid late payments
● Pay more than the minimum balance
● Limit the number of cards you have
Check Out Credit Cards from NJFCU
At North Jersey Federal Credit Union—the best credit union in NJ—we offer three separate credit cards, each with a distinctive purpose.
● MasterCard Platinum Rewards Card – Earn points for every dollar you spend. Terms include:
○ Annual Fee: $0
● Classic Card – Access low rates with no annual or over-the-limit fees for peace of mind with every purchase. Terms include:
○ Annual Fee: $0
● Liberty Card – Build credit with ease and pay your bills on time each month. Terms include:
○ Annual Fee: $33
Want to learn more about these cards to discover which one’s right for you? Contact us today to apply for a credit union credit card.