How to Choose the Right Credit Card for Your Wallet
For most Americans, credit cards are part of everyday life. According to the Federal Reserve’s most recent report on economic well-being1, 82% of adults in the United States have credit cards. There are many reasons you might want to use a credit card as your preferred form of payment. One reason is the convenience it offers when shopping online, renting a car, or making a big purchase, as it eliminates the need to carry cash. Many credit cards also come with built-in security, including zero liability, meaning you aren’t responsible for unauthorized purchases. They can also provide peace of mind should you need funds quickly in an emergency.
With so many credit cards on the market, how do you know which one meets your needs? Consider these important factors.
1. Annual Fees
While credit cards offer great convenience, it’s essential to understand the fee structure to fully realize their benefits. Check whether your card charges an annual fee, and how much. Fees can vary from $25 per year to $500 or more, and these charges are automatically billed to your card. Some credit cards may waive the annual fee for the first year only or if you reach a specified spending threshold each year.
Golden 1 credit cards come with no annual fees, so you don’t have to worry about any of these spending minimums.
2. Rewards Programs
Many credit cards offer cash back or other rewards programs. With rewards credit cards, you can earn cash back or points for purchases made at specific retailers or on designated categories. For example, the Member Cash Rewards+ card offers you higher returns on gas and EV charging stations, groceries, restaurants, and food delivery spending. Points cards enable you to redeem accumulated points for a variety of rewards, including gift cards, travel, merchandise, and even cash back. When you use the credit card regularly, you get the most out of your rewards potential.
Even with rewards, you can maximize your credit card benefits by paying your balance in full each month. Carrying extra debt for the sake of earning more rewards could cancel out the benefits of a rewards program. Treat your rewards like a bonus, rather than changing your financial habits to cash in.
3. Interest and Fees
A credit card’s financing fees consist of two key factors: grace periods and Annual Percentage Rate (APR). The grace period is the time between when you make a purchase and when interest begins to accrue, allowing you to pay your balance without incurring interest. Note that grace periods do not apply to cash advances or balance transfers, which start accruing interest immediately from the transaction date. APR is the interest rate expressed as a percentage, which includes any associated fees. This percentage of your balance will be added to your bill unless you pay it off in full within the grace period.
We offer credit cards with low APRs and grace periods on purchases of at least 25 days2. Transfer high-interest rate balances from other cards to a Golden 1 credit card with a lower APR and no balance transfer fee2. These options empower you to pay down your balance faster.
4. Building Credit
There are many benefits to having good credit including lower interest rates and a greater ability to obtain an auto loan or mortgage. If you’re looking to build or rebuild your credit, you can search for cards designed for this purpose. All credit cards used responsibly can help improve your credit, but a secured card can be easier to obtain and can jumpstart your credit history.
For example, at Golden 1 you can apply for our Members First secured credit card with a deposit of $250 - $3,000. Your deposit serves as your credit limit. It earns dividends and is fully refundable, so you have peace of mind. Each month, your payment activity gets reported to the credit bureau, so on-time payments help you build a positive credit history.
Open a Golden 1 Credit Card
Finding the right credit card is a crucial part of your money management strategy. At Golden 1, we offer multiple credit card options to meet your needs and help you reach your goals. Get started by:
- Applying online
- Calling 1-877-465-3361
- Visiting a Golden 1 branch near you
1Economic Well-Being of U.S. Households in 2023 (May 2024)
2Rules and restrictions apply.
