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					Choose Your Credit Card Wisely
Credit cards are readily available these days. If            what fees are associated with a particular cardʼs
youʼre like most, you probably receive offers on a           transfer offer. Most cards charge hefty fees for
regular basis. But, rather than agreeing to any card         balance transfers, making the offer much less
that comes your way, it is important to be proactive         worthwhile.
and research which card fits your needs. Here are
a few helpful tips to keep in mind to ensure youʼre          What You’ll Owe
using the best card for your financial situation.            Make sure you have a good understanding of the
                                                             fees, charges and interest you may incur. These
How Will I Use the Card?                                     things can make a significant difference in what you
This is an important question to ask before selecting        will owe to the credit card company. Some of the
a card. Consider the following:                              most common fees and charges are:
• Is the card for business or personal use?                  • Finance charge: This is interest that accrues on
• Will I pay off the balance regularly or carry                your outstanding balance as a fee for carrying that
  a balance?                                                   balance. Typically it is charged monthly and is a
• Will I use the card for everyday purchases                   percentage of what you owe.
  or only for emergencies?                                   • Annual fee: These also might be called member-
• Do I want a card with rewards such as points                 ship fee, participation fee, activation fee, acceptance
  or airline miles?                                            fee or monthly maintenance fee. Different cards
• How much money would I like available to me?                 charge the fee at different times and in different
                                                               amounts. Do your homework—a one-time fee of
                                                               $20 is obviously a lot less than an annual fee
                                                               of $100.
Annual Percentage Rate (APR)
If you plan to carry a balance on your card, the
APR is one of the most important considerations.             • Transaction fees: Most cards charge for cash
This is the rate of interest youʼll be charged on the          advances, late payments or exceeding your
balance you carry. It will be expressed in an annual           credit limit. Compare the amounts charged before
rate which may vary based on your credit score and             making your final decision about which card to use.
history. If you plan to carry a balance, you want the          According to U.S. law, credit card companies
lowest APR possible.                                           must display a “Schumer box” that lists the most
                                                               common fees in an easy-to-read format, making
Balance Transfers                                              it easier for consumers to compare and make
Balance transfers can be a very attractive benefit.            an educated decision.
This allows you to move a balance from one card to
                                                             • Foreign transaction fee: If youʼre someone who
another—usually from a high-rate card to one with
                                                               travels abroad frequently, youʼll want to pay attention
a lower APR. Not everyone offers this so if youʼre
                                                               to this fee. This is a fee charged for transactions in
interested, shop around for those who do—but be
                                                               a foreign currency—shop around for a good deal.
sure to read the fine print. It is important to know

                                                                          that can have great terms and conditions. There
                                                                          also is a wealth of information on the Internet.
Points and Special Rewards
Points, airline miles and special giveaways can be
                                                                          Visit and
an attractive lure. However, like everything else, you
                                                                 to compare offers, fees, reward
must do careful homework to determine if it is really
                                                                          programs and APRs.
best for your situation. If you only plan to use the
card for emergencies and the airline mile card you
want comes with a hefty annual fee, you need to
                                                                          Credit Limits
                                                                          Some people have credit limits of $500, whereas
weigh the costs. By the time you accumulate enough
                                                                          others are $50,000. Again, it is important to consider
miles and pay the fee annually, you may have been
                                                                          how you plan to use your card. If you plan to pay for
able to buy the airline ticket outright. Conversely, if
                                                                          business expenses or are looking to improve your
you pay your balance monthly and use your card
                                                                          credit score, youʼll likely need a larger limit. Remem-
for almost everything, a rewards card really can be
                                                                          ber that your credit score improves with the amount
a great way to take advantage of special perks—
                                                                          of available credit you have, so a higher limit on your
everything from free gas and travel to specialty
                                                                          credit card can help your credit score depending on
                                                                          the balance you carry. However, if you only want the
                                                                          card for minor purchases and are worried youʼll be
                                                                          tempted to overspend, consider a smaller limit.
Other Important Considerations
Most people are probably very familiar with the
“big players” in the credit card industry. MasterCard,                    No matter what card you ultimately choose, it is
Visa and American Express are accepted at millions                        important to remember that a credit card is not free
of merchants worldwide. If you go with another card,                      money. Learning how to responsibly manage credit
educate yourself about where you can and cannot                           card spending is a valuable lesson. If managed
use it.                                                                   correctly, credit cards can help you build your credit
                                                                          score and pay for things you need. On the flip side,
With all the options available, itʼs easy to get
                                                                          mismanagement of credit cards can lead down
confused. If youʼre overwhelmed, ask someone
                                                                          a road of debt and damaged credit scores. Itʼs
you trust—friends, family and co-workers can be
                                                                          important to always be vigilant and educated about
great resources. Also consult your credit union.
                                                                          decisions affecting your financial well-being.
Most financial institutions offer their own credit card

             This information is compiled courtesy of Tigers Credit Union on the campus of the University of Missouri–Columbia.
            For more information, contact us at (573) 443-8462 or stop by our office on the lower level of Brady Student Commons.