Michigan First Credit Card - How to Choose the Right One

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2 Contents 5 Credit Card Fees You Shouldn t Pay Do You Need a Store Credit Card? How to Choose the Card That s Right for You 3 6 7

3 5 Credit Card Fees You Shouldn t Pay by Janelle Witting, Michigan First Credit Union Credit card fees can be ridiculously expensive. I get it. You gotta make money somewhere, and credit card companies make their money from fees and interest. When I first got into the credit game, I was naïve and with a limited credit history, I couldn t really afford to be picky, either. My first card had a measly $250 limit and a $39 annual fee, but it was also the only card my nocredit-history butt could get. Now I m older and (a teeny bit) wiser. I know some stuff now. Like the fact that you can definitely find a card without an annual fee, and if you re a good little customer and pay on time, credit card companies will usually increase your credit limit. Avoiding fees has been easy for me, and it can be easy for you Too. Start with the following tips: (Image courtesy of PT Money ptmoney.com via Flickr Creative Commons) 3

4 5 Credit Card Fees You Shouldn t Pay 1. Annual fee. Sure, you might be like me and not have many options. I keep my first card around because it s my oldest account and it helps my credit score. When it comes time to renew my card, though, I m going to see if I can talk them into reversing the annual fee. If you re in the market for a card, try to find one without the added yearly expense trust me, there are PLENTY out there. 2. Foreign transaction fees. I travel out of the country a little more than the average 27 year old. I m not saying I m a Phileas Fogg Around-the-World-in- 80-Days type traveler, but I ve been around. Because of this, I looked for a card that doesn t charge an additional foreign transaction fee. Let s face it, the exchange rates in Europe aren t in our favor, and it s already crazy expensive to travel there. (Asia s a different story! I felt rich.) So if traveling is your thing, find a card that doesn t tack on a percentage for foreign transactions. 3. Late fees. This is kind of inexcusable. Always pay on time. Otherwise, you re literally wasting money on something that could have totally been avoided. Look at it this way: if you can t pay off the balance in full, you ll be paying interest anyway. Don t give them more of your hard-earned cash by delaying your payment. 4

5 5 Credit Card Fees You Shouldn t Pay 4. Cash advance fees. Most cards have a cash advance fee, and they can be pretty hefty. Solution? Don t use your card for cash advances. It s just too expensive. 5. Balance transfer fees. Most cards have a balance transfer fee that hovers around 3%, tied in with some other promotional offer that seems enticing. You ll save money if you do everything in your power to avoid a balance transfer if your card has a fee associated with it. Credit cards can be an absolute lifesaver when handled correctly. It took me a while to learn, but now that I ve gotten the hang of managing credit, I m much more financially stable. However, if you re not careful, that shiny piece of plastic can end up costing you hundreds of unnecessary dollars. Get smart! If you re in the market for a new card, check out the Experience Michigan First Rewards VISA. It has no annual fee AND no balance transfer fee, plus some killer rewards. 5

6 SO WHAT S THE DEAL? Store cards can be beneficial in certain situations, but try to avoid using one as your only source of credit. If mismanaged, the cons will DEFINITELY outweigh the pros. If you decide to keep your credit a bit more consolidated, consider getting a card with a rewards program. Some have cash rewards or airline miles, and some have cool specialized rewards programs. The Experience Michigan First Visa card at Michigan First Credit Union gives you 1.5 points per dollar spent in Michigan, and rewards can be redeemed for cool stuff like gift cards to Michigan stores, tickets to Michigan attractions, and other Michiganesque products. Now I really want to go shopping. Do You Need a Store Credit Card? Pros: The initial discount you get for opening a card is usually fabulous, and that in itself is sometimes enough to entice a person to open an account. Even after that first big discount, many stores offer more deals 10% off all purchases, rewards points, etc. It s also a bit easier to get a store card on limited credit history if you want to build your credit. The limits are typically pretty low, so a store card is a great way to get a $1,000-$2,000 line of credit and build up your credit history by making regular, on-time payments. This is really only a benefit if you re a regular shopper at that store, though. Cons: by Janelle Witting, Michigan First Credit Union Store credit cards typically have very high interest rates, so leaving a balance on them can be financially draining. Another by-product of store credit cards is a pretty massive increase in junk mail. Junk snail mail is annoying enough, and you ll still get that but you ll also get lots of junk s, too, unless you re careful. Also, as mentioned before, the credit limits aren t high. If you want something with a high credit limit or numerous rewards programs that cover a bunch of different industries, steer clear of a store card. And of course, you could lower your credit score if you open up several of these cards both because of the alteration to your credit history and a higher risk of forgetting to pay them off. 6

7 How to Choose the Card That s Right for You by Michael Poulos, President/CEO of Michigan First Credit Union Using a credit card can have many benefits when handled with care. Rewards cards can be a real bonus for the right customer and the right program fit. There are tons of reward credit cards out there, so where should you start in deciding which one to use? The best rewards credit cards for many people are those that compensate you for everyday, essential purchases. Cards that offer cash back on necessities like gas and groceries can ensure you ll get back some of what you spend. If you re an avid traveler, having an air miles or travel incentive card can be another perk of exploring. 7

8 How to Choose the Card That s Right for You Many stores offer their own cards, but think carefully before you automatically apply at the checkout for a one-time discount. Signing up for store credit cards whose incentives require you to shop their more expensive prices isn t a smart strategy. Find the card that fits with what you already buy, not one that forces you into a more expensive routine. Reward cards may come back to bite you if you don t research the terms and conditions for things like high annual fees or interest rates before applying. You don t want to cancel out the rewards you earn with costs for using the card. Some companies offer reward credit cards as a way to make a profit. However, credit unions, for example, offer rewards like shopping in your home state or offering donations to a cause you care about without hidden fees. Two important steps when applying for a rewards card are knowing the company who is issuing the credit and reading the fine print. Almost everyone can be a good candidate for a rewards-based credit card, it s just a matter of finding the right card for you. Take a moment to see if the rewards card you have your eye on is one that really gets you the most from your spending. 8

9 At Michigan First, superior customer service is our mission. After all, you can get a checking account or a loan at any bank or credit union. But only Michigan First gives you our personal attention, 24/7/365. Headquartered in Lathrup Village (near Southfield), Michigan First serves more than 100,000 members in Michigan. If you live, work or worship in Michigan then you can become a member and carry the Experience Michigan First Rewards Visa! We were originally founded in 1926 by a small group of Detroit teachers, and have grown into a $740 million+ full-service financial institution. We focus on providing first class personal service in addition to supporting community organizations throughout Michigan. You can learn more about us at MichiganFirst.com. At Michigan First, we re always trying to improve your banking experience 24 hours a day. Call us anytime at

Introducing the Credit Card

Introducing the Credit Card This program was designed with high school students in mind. It goes over everything you need to know before you get your first credit card so you can manage it wisely.» Key