Smart Credit Card Use With PFCU Tips & Tools

5 MIN. READ

Key takeaways:

Credit cards are a must-have financial tool for building your credit.
It’s important to manage your credit card utilization and pay attention to things like APRs, reward programs, and debt management.
Power Financial Credit Union can help you better manage your finances with low-APR credit cards.

Cash or card? This can seem like a simple question, but there are different financial implications whenever you choose.

We often only think of milestone financial decisions as ones that have an impact (like buying a house or financing a new car), but the truth is that you make thousands of much smaller financial choices every day that add up over time.

Is putting your utility bills, weekly groceries, or your planned trip on a credit card the best thing? It can be if you’re smart about managing your credit lines and know how to make credit cards work for you.

If you’re not sure what good credit card usage looks like, we’ve talked to some of our financial experts at PFCU to give you some credit card tips.

1.) Take the Time to Compare Credit Cards

Whether you’re a young adult stuck with a secured credit card or have a credit score good enough to see your mailbox flooded with credit card offers, we highly recommend comparing your options.

Comparing credit cards doesn’t have to be complex. Just pay attention to these three things:

What’s the Annual Percentage Rate (APR)? Low-interest credit cards are best unless you plan on paying your balance in full every month. If a card has a 0% introductory APR, determine the rate after the promotional period ends.
Go over the credit card contract to locate the fee schedule. The two main fees you might have to pay are annual card fees and late payment fees.

You should also pay attention to the rewards system. Is the scheme a good match for your spending habits, and will you take advantage of these rewards?

2.) Use Credit Cards to Build Your Credit

Yes, opening a new credit card can cause your credit score to dip a little due to the hard inquiry. However, you’ll soon regain these points and watch your score grow as you use your new card.

The key to building your credit is to manage one or more cards responsibly:

For starters, you can use your card to pay for necessities. Think of recurring expenses like your gas bill or your groceries.
At the end of the month, pay your credit card bill in full to avoid paying interest.

This is enough to keep your card active and build a history of on-time payments, but you can do more:

Finance a larger purchase with your credit card, like a new appliance, electronics, or a trip.
Pay it off gradually while keeping your credit utilization rate under 30% and paying more than the minimum.
After a few bigger purchases, your credit card company should offer a line increase.

Charging purchases on one or more credit cards (while being mindful of how these expenses affect your monthly payments) adds diversity to your credit mix. It shows you’re a responsible credit user. It’s crucial to build a strong credit profile and qualify for other products, like auto loans, recreational loans, and mortgages.

Need a bonus tip for those with limited credit history? See if a family member can add you to their card as an authorized user. This will make your credit report look much better, and you should qualify for your card after a while.

3.) Credit Cards and Debt Management

We get it, managing a credit card can be intimidating if you’re new to it, and getting too far into debt is a legitimate concern.

It’s why we recommend reviewing your card agreement's terms and ensuring you understand the interest rate and fees that apply. We also recommend using these debt management strategies:

If you have several credit cards, look into balance transfers. Balance transfer cards have a lower introductory rate. After paying a balance transfer fee, you can pay off your credit card debt faster or benefit from lower monthly payments.
You should also prioritize how you repay your credit cards. If you’re juggling multiple credit lines, paying off the one with the smallest balance or the highest interest first is a smart strategy.
Don’t hesitate to shop around for a better credit line. Credit union credit cards are usually affordable, with an average interest rate of 12.72% compared to traditional banks, which charge an average of 15.39%.

4.) Make the Most Out of Credit Card Rewards

We’ve mentioned charging recurring expenses to your card and paying those bills in full, which can seem unnecessary since you can do the same thing with a debit card.

But besides helping your credit score, this simple habit enables you to rack up the rewards. As credit card companies compete against each other, they offer perks that can add up over time if you’re clever about maximizing them.

Here’s how:

Make sure you get your sign-up bonus. You typically have to spend a certain amount within the first few months of opening your card.
Most cards offer cash back as a reward, but you can sometimes earn more for some categories. Look into managing a couple of different cards to charge purchases to the credit line with the best rewards for each category.
If you have a card that rewards you with miles, pay attention to the purchases that will help you earn the most.
Be strategic about redeeming rewards. Statement credits, miles, and gift cards tend to be the most valuable perks.

5.) Manage Credit and Achieve Your Financial Goals With Power Financial Credit Union

Credit cards are a great tool for boosting your credit score while giving you more flexibility with your spending. As long as you’re smart about managing your credit, these tools will get you closer to your financial goals.

Power Financial Credit Union is here to help with personalized financial advice and affordable credit lines. Our credit cards come with low variable APRs, advantageous introductory rates, rewards, and no annual fees. Our Platinum card even comes with no balance transfer fee if you’re looking for a way to save on your credit card payments.

Learn more about our personal credit cards or contact us if you need help managing your credit.

FAQs About Credit Cards

How do I find low-interest credit cards?

You can find the best low-interest credit cards by shopping around and comparing APRs. A good credit score also helps qualifying for a lower APR easier.

How do I qualify for a credit card with good credit?

Credit cards for good credit typically come with a lower APR and attactive rewards. A score between 670 and 739 is generally considered "good," with 740-799 being "very good" and 800-850 being "excellent."

Can I get a credit card if I don’t have a credit history?

Without a proper credit history, getting a secured credit card is the best option. You'll have to deposit to open the card, which you generally get back after using the card for a while. If you are a student, there are credit card options available for those with little to no credit history.