My first credit card experience began with my college study abroad program in Florence, Italy during my junior year of college. I had always planned on studying abroad in Italy, but truly took steps to make it a reality beginning my junior year of college. When I finally committed to going, I realized I had to think through how I would live while I was there. As such, I brought a credit card to Italy as a way of financing my stay.
I didn’t shop around credit card options. Instead, I went with the first recommendation made by my parents, which led me to the same credit card they had. I didn’t know much about credit cards, their differences, their options, or on what they mean, so I learned many things the hard way. In hindsight, there are a few things I wish I would have known. What you ask? Here’s a list:.
Rates: Look past the first recommendation you receive. Compare card rates. Additionally, make sure to be aware of whether your credit card rate is variable or fixed. If you rate can change, you’ll want to know what can happen, from how high it can go to how often it can change.
Introductory Rates: There are always offers for introductory rates or lower rates for specific periods of time (for example: 12 months at 2.99%). If you choose to take advantage of such a promotion, watch the fine print. Know what happens to your rate after the introductory period. Does it go up, and how will that change affect any balances at the introductory rate?
On-Time Payments: I’ll admit, I learned the importance of on-time payments the hard way when starting out with a credit card. In the days before smart phone calendars, alerts, and messaging options to remind me, I had forgotten to mail in my payment. I ended up with a fee and an increased interest rate. What will happen if you miss a payment?
Rewards: Are you a rewards seeker? When shopping for a card, consider if rewards are important to you and what options are most important—like travel, merchandise or cash back. Compare programs, dollar-to-point earnings, and any restrictions (we’ve all heard of the blackout periods!).
Cash Advances: When you need to access cash, consider any additional fees and increased rates that apply to taking cash from your card. Typically, these rates and fees are different from those that affect purchases.
Minimum Payments: If you carry a balance on your card, understand the impact of making the minimum payment. There are times where making the minimum payment wouldn’t even pay the interest. No one wants to pay interest on interest. To avoid that, plan to make more than the minimum payment.
Fees: When you’re comparing which card to choose from, look at all the fees associated with your card—like balance transfer and annual fees. You’ll notice a difference in card options, and in some cases, you may find a card without some of the fees—like the Affinity Plus Visa Premier Classic or Visa Premier Select Rewards cards.
Skip-a-Payment: It’s nice not to have to make a payment, but interest continues to accrue on your balance whether you make a payment or note. In the long run, you’re still paying on your missed payment, so weigh out the benefit of skipping your payment and if it’s really worth the extra money in your pocket.
Usage: Money can be an emotional thing. As they say, out-of-sight; out of mind. It’s easier to spend on plastic, and easier to whip it out for a quick cup of coffee or a meal out. Think about what you’re using your card for and how you manage your money. Paying it off each month and quickly means your $2 cup of coffee wasn’t $20. After reviewing my expenses from my semester abroad recently, I realized I could have made some better choices on using my card.
Security: Be responsible with your card. Keep your PINs, and card numbers separate from your card. Review your statements and account activity regularly for irregularities. Take advantage of alerts on card activity—like email or text alerts. I found that at times, I had my physical card, but my card had been compromised.
What card is in your wallet? While we hope it’s an Affinity Plus card, we know it may not be—and that’s okay too. Take a look at your statements and disclosures with your card to make sure you’re getting the most value.