Many people shun credit cards for fear that credit card debt will reflect poorly on their credit report. Although opening a new credit card account can affect your credit score, it is how you use the card that is most important. When you open a new account to help you better manage your finances, you may ultimately see a boost in your FICO score. Want to understand more? Reach out to a TDECU representative, and find out how a new credit card can be used to consolidate multiple debt sources, save money, and improve your FICO credit score.
Here are four reasons why you should get a new TDECU credit card:
1. Better Terms and Perks
Not all credit cards are created equal. Most credit cards come with special perks. There are rewards credit cards, cashback cards, low annual fee cards, and more, but how do you know which is the best credit card for you?
First, review all the terms and conditions of your current credit card to compare your current benefits and/or penalties with other cards. Next, look at your spending history and determine how you spend your money. Now, you are ready to find a credit card with improved terms and benefits that work with your spending habits.
If you drive a lot, you can choose a card that gives you cash back or discounts on fuel purchases. If you rarely use cash and charge everything or make large purchases, get a card that gives at least 2% cash back on purchases. The idea is to find a credit card tailored to your needs.
You can also look for cards that will give you a higher credit limit, a low annual percentage rate (APR), access to free credit reports from one of the three big credit bureaus (Experian, Equifax, or Transunion), no annual fee, etc.
2. Conduct a Balance Transfer from Higher Interest Rate Credit Cards
If your APR is high, then, without a doubt, you are paying more in interest than you have to. Experian reports that a good APR for a credit card is one below the current average interest rate as listed by the U.S. Federal Reserve. Currently, that rate is approximately 15% APR.
The higher the interest rate, the more money you are paying each month and the higher the cost of your purchases. TDECU offers credit cards designed to help you get out of mounting debt from high-interest credit cards. The Platinum Mastercard® from TDECU allows you to transfer the balance from multiple credit cards to TDECU with a 0% introductory APR for 12 months on balance transfers. That means for one year, everything you pay goes directly toward your debt allowing you to pay it down faster.
When you transfer a credit card balance make sure to take advantage of the 0% introductory offer and pay as much as you can for those 12 months. (At the end of 12 months, the interest rate will increase according to the credit card terms.)
3. Consolidate Loans and Debts
Did you know you can transfer the balance of personal loans to a new credit card? When you consolidate loans and credit cards into one easy payment, you can focus all your resources toward paying down multiple debts at once and save on interest. A consolidation strategy can also help improve your credit score as you pay down your debt.
4. Establish or Rebuild Credit
Credit scores range from 300 to 850, with a score of 700 or above considered a good credit score. Your credit score is derived from a combination of metrics including payment history. If you are overwhelmed with credit card payments and your credit history is suffering as a result, a new TDECU credit card designed to help you rebuild your credit can help. Cardholders who are diligent in monitoring their credit card balance, available credit, monthly payment amounts, and payment due dates can begin to boost their credit score.
TDECU Credit Cards for All Your Needs
TDECU offers credit cards for every need and stage of life. TDECU credit cards offer low rates, no hidden fees, travel benefits, ID theft protection, and other perks and benefits.
Open a new credit card account that meets your needs. Find out how TDECU can help you find the right type of credit card. Learn more about your options today.