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A Credit Card is a Credit Card, Right?

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According to a historical, self-evident truth, all men are created equal. The same cannot be said of credit cards. Since the first Diners Club Card hit the scene in 1950, credit cards have exploded into a trillion dollar industry with countless options for consumers. With the explosion of ecommerce and mobile payment finally getting some traction, the demand for credit cards is likely to continue its upward trend. As demand increases, so does competition. And with increased competition comes more specialization. These days, a quick Google search makes it seem like there are as many different credit card options as customers using them—which brings us back to the point of this article: not all credit cards are the same.

Take your time. Don’t skip the fine print.

Before rushing out and applying for as many credit cards as possible, it’s important to remember that most applications include an authorization for the card issuer to make a credit inquiry to determine your creditworthiness. Too many queries in a short period can cause damage to your credit rating, so it’s worth researching your options before applying. It’s much better to apply confidently for one card that will meet your needs instead of filling out multiple applications to increase your odds of approval. Focus on quality, not quantity.

As you conduct your search, remember that the fine print matters. Credit card marketing campaigns feature tempting claims and fantastic rewards because they’re effective in generating impulsive action.While the offers may technically be true, you have to be aware of potential hidden fees. Plus, simple oversights like paying your bill late or carrying a rolling balance can saddle you with a higher interest rate and minimum payments you can’t afford. You can save yourself a lot of hassle—and potentially a lot of money—by reading the fine print and disclosures before applying.

Develop a personalized credit card strategy.

Since your financial situation is unique, your approach to credit card usage should be as well. If you’ve experienced a financial setback, a secured credit card can help you rebuild your credit rating. If you travel frequently, it might make sense to consider a credit card that offers airline miles or hotel points programs for its members. If you plan to consistently use the card for routine purchases and pay off the balance every month, a card that offers cash-back rewards can be an effective way to add a little money into your monthly budget.

No matter how you use a credit card, your budget will always be the most critical consideration. Reward programs and perks are nice but overspending just to maximize rewards is a surefire way to put yourself in a financial hole. With or without incentives, spending more than you make is always a bad strategy. A sound credit card strategy will not only focus on the benefits of using the card; it will address the financial commitment involved. If this sounds like a lot to think about, that’s because it is. So, how can you sort through the mountains of credit card offers and find the best for your financial situation? It may be easier than you think.

Devidot Credit Union is on your side.

At Devidot Credit Union, we’re committed to helping you make solid decisions for your financial future. Credit cards can be powerful financial tools for you and your family, and as with all financial products, they need to be used carefully.

As a service to you, our member, we offer several VISA® credit cards. From cash-back rewards to low interest rates, our Devidot Credit Union Visa® credit cards were specifically built to meet your needs. To find out which of our credit card options is right for you, stop by one of our branches, call us at (800) 548-5465, or click here. Our advisors aren’t going to sell you, they are there to help you make the best financial decision for you.