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Credit Cards 101: Get the Most From Your Credit Union Credit Card

Credit Cards 101: Get the Most From Your Credit Union Credit Card

From fees and high interest rates to buying more than you can afford, Americans are giving their credit cards more of a workout than ever.

Visa recently polled consumers about the amount of money they spend on lunch alone and the results were quite eye opening.

On average, most consumers spend about $53 a week or $2,746 per year on lunch. While 42% of the Visa survey respondents said they ate lunch home, 53% said they lunched at work, with 26% who said they ate their desks.

“At home or ordering food, small choices have a big impact. Paying attention to what you are spending is essential to financial wellbeing,” said Nat Sillin, global head of financial literacy at Visa Inc. in a press release . “Most people may not realize that they are spending over $50 a week on lunch.” Visa recently released Lunch Tracker app for iOS to help consumers keep a better eye on what they spend on food.

Other noteworthy findings include that men both outspent women at the lunch counter and were more likely to eat lunch out. Males outspend females on a weekly basis by an average of 60%. One percent of people reported spending more than $50 per lunch on average or more than $9,000 a year, while 32% respondents said that they didn’t buy lunch out at all.

With more consumers relying on their credit cards to purchase items from lunch and dinner to putting the expense of a holiday cruise on plastic, finding the right credit card for your specific needs and budget is ideal to staying out of debt.

No Late Payment Fees

If you are late making your monthly credit card payment, your lender will most likely charge you a fee. This punitive fee can add up and make paying down your balance more difficult.

While you may not be able to completely avoid a late payment fee if you don’t pay on time, you can choose a card that has a lower than average late payment fee. Most banks charge a $25 late payment fee and in fact, the Fed capped late payment fees at $25 in 2010.

However, sometimes you can better. For instance, Eglin Federal Credit Union’s ($1.6 billion, Ft. Walton Beach, FL) MasterCard late fee is only $20 if the minimum payment is not received by 12 days after the statement closing date.

Do You Get a Reward?

Committing to a credit card lender is a little like dating--what return on your “investment” or “commitment” do you want from your credit card lender? Will airline miles make you become a loyal cardholder or a reward like cash back? Or would you prefer simply a great rate and no special bells and whistles like rewards? Know what you want for your return or reward for making a credit card commitment before signing on the dotted line.

For example, Generations Credit Union ($590 million, San Antonio, TX) has a card with everything--1.0% cash back on every purchase you make, no annual, cash advance or maintenance fees and members can earn $75 after three months using the card.

Know your APR

The term “APR” stands for annual percentage rate and can change, especially if you sign up for a limited time only promotional rate. Any percentage assigned to the card means the lender can charge that percentage in addition to what you owe if you don’t pay off the balance immediately. The higher the percentage and less you pay off month to month, the more you end up owing.

One important aspect to note is that credit union credit card APRs and bank credit card APRs differ.

By law, credit unions can only charge up to 18% APR on any loan, including credit cards. Banks don’t have a limitation so that means they can charge an APR has high as desired, some charging even 35% APR.

What Are The Annual/Maintenance Fees

Some credit cards come with annual and/or maintenance fees, which means the lender is charging you a fee simply for doing business with them. A variety of lenders will charge either or both, however most credit unions offers credit cards that does not have annual or maintenance fees.

Many of the credit cards at PenFed Credit Union ($19 billion, Alexandria, VA) have no annual fee, along with no foreign transaction fees. Members can choose from a variety of cards ranging from the completely fee-free PenFed Promise Visa Card to their rewards-based American Express and Visa cards.

Can a Human Help?

What happens if you have trouble making credit card payments? Will you be able to get in touch with a human being or will you be relegated to a phone tree that never provides resolution?

Or, if you have questions will someone attend to your needs? Reviews from Credit Karma point to an abundance of credit unions rating high for service.

Just recently, a Schools First Federal Credit Union member ($10 billion, Santa Ana, CA) said, “I had opened a secured credit card. Just today, I took the chance and applied to convert it to an unsecured card. Not only did I get approved, but Schools First congratulated me on my 70 point increase since they last checked my score and for all the hard work I had clearly put into improving my credit. I was awarded a $2000 limit. I am so thankful to this bank for taking a chance on me and allowing me the opportunity to rebuild my credit when no one else did. I am forever grateful.”

Last Spring a Community Choice Credit Union member ($474 million, Farmington Hills, MI) said, “I have had only great experiences as a member of CCU. You fill out the application for the no fee Rewards Checking Account online at their website.”

They have a live chat that answers questions and is very helpful. When you fill out the application, you can also apply for their credit card at the same time. It takes them about 2-3 business days to approve your application. You can earn 3.09% APY on $10,000 without the credit card, but with one of their credit cards you can earn 4.09 or 5.09% APY on $20,000. The 4.09% is really easy to earn, but the 5.09% requires spending $1,000 on the credit card for the month, which may or may not be worth it.”

I recommend the VISA Signature Cash Rebate card, because it offers a generous 3% cash rebate for grocery/convenience store purchases and 2% back for gas. They also have a special offer for that credit card which gives a $100 account credit if you make $1,000 in purchases within the first 60 days of account opening. Keep in mind, if you are married, you can open two joint accounts. One for you with your spouse as a co-owner and the opposite.  So really, you can earn a great return on $40,000 if you are married (with or without the credit card). Those are my two cents, and I highly recommend them.”

By Gina Ragusa
Published November 16, 2015
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