6 Questions to Ask Yourself When Choosing a Credit Card

  • by Johns Hopkins FCU
  • 2/4/22
Young African American woman with chin resting in hand.  With a background full of question marks, she is pondering questions in reference to choosing the right credit card

A credit card is a convenient tool that can make your life easier and reduce financial stress. Your credit card should fit your situation and spending habits so that you get the most out of your experience. 

The key to choosing a credit card is to ask yourself what you need and want. We’ve put together six questions to ask yourself when choosing a credit card and how to find the card best fit for you based on your answers.

  1. Will You Be Able To Pay Off Your Balance Each Month?

  2. Do You Want to Use Your Card to Pay Down Debt?

  3. Do You Want to Earn Rewards?

  4. Are You at the Beginning of Your Credit Journey?

  5. Do You Need to Build or Repair Your Credit?

  6. Do You Already Have Great Credit?

Will You Be Able Pay Off Your Balance Each Month?

If you're not planning to pay your card off in full every month, your focus should be on finding a low-interest card such as the Visa Platinum Card

It's helpful to consider these factors when choosing your credit card and carrying a balance: 

  • Interest rates are usually given as an annual percentage rate (APR) and the better your credit score, the lower your APR.

  • Find out your credit score then shop around for the best APR for your credit range.

  • Check if your card has late payment fees or penalty interest payments. If so, be sure to pay at least the minimum balance due. 

But, if you'll pay your card off each month, the APR is less important so you can focus on other features such as earning points with a Visa Platinum Rewards Card

Do You Want to Use Your Card to Pay Down Debt?

If you want to consolidate debt, a low-interest card like the Visa Platinum Card is also your best bet. 

Here's why transferring the balance of your other cards could work in your favor:

  • If your credit has improved, you might be able to get a card with lower interest than the one you got with your old credit score.

  • If you have multiple cards with payments due every month, you might be able to transfer them to one card for a single, easy monthly payment.

Before you transfer your balance, consider the following:

  • Is there a fee to do so and can you afford it right now?

  • Are your other credit cards eligible for the transfer to the new card?  

Do You Want to Earn Rewards? 

If you're the kind of person who loves to collect points as you spend, then you want the Visa Platinum Rewards Card. This card means you can earn points with every purchase, plus it has a great, low APR. 

Before you sign up for a rewards credit card, consider the following:

  • Check if your card has a list of qualifying purchases and make sure your frequent expenses fit into the list. You could redeem your points for gift cards or use them to shop from a catalog of merchandise. 

  • Some rewards cards are complicated by limits and tiers. Make sure you get a simple card so you get the most out of it.  

  • Make sure your points won't expire before you have a chance to redeem them.

  • Some rewards cards have high APR so make sure you find the right balance for you. 

Are You at the Beginning of Your Credit Journey? 

Maybe you're a student or maybe you've never wanted a credit account until now. In any case, everyone has to start building credit somewhere and a Visa Starter Card is designed just for that. 

Keep these tips in mind when choosing your starter credit card:

  • Find a card with no annual fee or hidden charges so your money will go further.

  • Starter cards might have a slightly higher interest rate because you haven't had time to prove your creditworthiness yet.

  • Find out if you can graduate to a card with a more competitive interest rate later, and how long it will take you to qualify. 

  • When you get your next credit card, find out if you can keep your first card open because this will add to the average age of your accounts, which boosts your credit score. 

Do You Need to Build or Repair Your Credit?

Whether you need a little help to take your credit to the next level or you need to make amends for a few missed payments, a Secured Visa Card could be just the ticket. 

Here are a few pointers when it comes to choosing your secured credit card: 

  • A secured card means your lender holds the funds in your share savings account as collateral for your credit card purchases. 

  • Find out how much money you need to have in your savings account, and if the amount of savings is tied to your credit limit. 

  • Find out when you might be able to switch to an unsecured card with a lower APR.

  • Find out how much interest (APY) your savings will earn while the funds are being used as a security deposit.

  • Check to see if the card reports your payments to the credit bureaus, as this is how you build credit. 

Do You Already Have Great Credit?

If you have great credit, then the world is your oyster! You can apply for any credit card you like. 

When choosing a credit card, ask yourself what is more important to you:

Choosing a Credit Card With Johns Hopkins Federal Credit Union

A credit card boosts your purchasing power and opens doors to all the financing you might need in life, from an auto loan to a mortgage.

There's a credit card to suit everyone, so make sure you get the right one for you. Click below to find out about some popular credit card options! 

JHFCU Credit Cards