If you’re over 18, chances are you get a new credit card offer in the mail almost every day. Visa. MasterCard. Discover. American Express. The choices are endless. Each one promises to have the lowest interest rates, no fees, and an amazing rewards point program. Sifting through all the offers to find the credit card that’s right for you is like trying to win at Flappy Bird – virtually impossible!
But unlike with Flappy Bird (which you should just give up on playing before you punch your finger into your phone so hard it breaks), there is hope for the first-time credit card applicant. What’s the easiest way to be sure you’re getting a credit card that won’t fee you to death or get you in trouble? Ask your credit union for help! Most financial institutions offer credit cards of their own or have a credit card company they recommend to members. Applying for a card through your financial institution will ensure that you are using a trusted, secure, reliable credit card company.
Once you choose a credit card provider, there’s still the tricky question of which card to choose. There’s “Cash Rewards” Cards, “Travel Rewards” Cards, “Student” Cards, and so many more. They all have different terms, different interest rates, and different gimmicks to get you to choose them. Since your financial institution knows you and your money habits/needs, they can recommend which specific card will work best for you. Unlike a big credit card company, your credit union doesn’t just want to sell you something; they’ll work with you to find a credit card that doesn’t hurt but helps your credit.
Still reluctant to open up the Pandora’s Box of being a credit card holder? Or maybe you’ve already developed some bad spending habits and are working to restore your credit? Whatever your situation, a Secured Credit Card is a great alternative to a more traditional credit card. With a Secured Card you make an initial deposit into a secured savings account of $300 – $5,000. This deposit is pledged as security for your credit card account and will earn interest while you are using your card. You can only spend on your Secured Card as much as you deposited, so you don’t have to worry about racking up a high balance. Additionally, if you get behind or become unable to make payments, your credit card company will use your secured deposit to take care of your outstanding balance.
You can use your Secured Card just like any other credit card – merchants and retailers won’t ever know the difference! And your secured savings deposit guarantees your approval, so you don’t need to worry about being denied because of past mess-ups with your credit.
Still worried that a credit card will do you more harm than good? Here are a few tips for using your credit card wisely:
- Pay off your balance in full every month. Don’t just make the minimum payment.
- Limit yourself to just paying for certain things with your credit card. For example, use your card only to pay for gas at the pump. This will keep your balance down and will stop you from impulse shopping with your card.
- Never pay for something that’s $20 or less with your credit card. This may seem counter-intuitive, but putting a lot of small $5 or $10 purchases on your credit card can really rack up your balance. You can pay for your $3 coffee with cash or your debit card.
- Put a sticky note on your credit card with your savings goal on it. Say you’re saving up for Spring Break or a pair of concert tickets – put a note right on the card that says “CANCUN!” If you see the note when you pull out your credit card, it will make you think twice about the purchase? Do you really need the item or would you rather save that money for your trip?
Don’t be scared! Getting a credit card doesn’t have to be a scary, grueling experience. Ask the pros at your credit union for help! Now get out there and spend wisely (and just stay away from Flappy Bird. It’s a life-ruiner. It ruins people’s lives.)