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Since you're out shopping, shop for a better credit card

Posted November 9

With the holidays approaching, chances are you’ll be doing a lot of shopping. And if you’re like most Americans, you’ll be using a credit card.

This article was written for our sponsor, Coastal Federal Credit Union.

With the holidays approaching, chances are you'll be doing a lot of shopping.

If you're like most Americans, you'll be using a credit card (or several credit cards) for the majority of those purchases. One hundred sixty seven million consumers in the United States have at least one credit card in their wallets and now have more choices than ever.

If you haven't checked lately, you might be missing out on some pretty sweet deals.

"Basically, you have two choices," said Brandon McAdams, VP of Marketing and Product Development at Coastal Federal Credit Union. "You can shop for a card that offers a low rate, or a card that offers some type of reward for your purchases. It really depends on whether or not you pay off your balance every month as to which card makes more sense for you."

If You Carry A Balance, Look for A Low Rate

Low interest rate credit cards make more sense if you carry a monthly balance or if you are trying to pay off existing credit card debt.

Cards often offer a "teaser" introductory rate of zero percent APR for a few months up to several months, so it pays to look around. But be sure to read the terms and conditions so you know when the introductory zero percent APR period ends. Because afterwards, you could be paying rates from 10.99 percent to 22.99 percent on your balance.

Many cards also offer zero percent APR on balance transfers for a limited time. These can be helpful if you have a lot of debt on another card, and you're currently paying a high interest rate.

"A good rule of thumb to remember is that the higher your credit score, the lower your interest rate will be," McAdams pointed out.

Get Rewarded for Paying Off Your Balance Every Month

If you consistently pay off your balance every month, you'll want to focus on rewards.

There are a lot of rewards cards out there, offering everything from airline miles to gift certificates to cash back. Cash back rewards cards are extremely popular, but still, shop around. Some pay a flat one percent return on all purchases, while others may have a sliding scale for everyday purchases.

For example, you might get three percent back on gasoline purchases, two percent back on groceries, and one percent back on all other purchases. Regardless of what you choose, you’ll definitely want one that doesn’t charge an annual fee.

Be Sure To Look for Hidden 'Extras'

"Many rewards cards have other bonuses and benefits that may not be heavily advertised," McAdams explained.

Look for things like bonus miles or extra cash back, usually available within the first 90 days of opening your account. Some cards offer additional benefits such as trip cancelation insurance, or extra protection on electronic purchases or car rentals.

Planning on traveling to the Riviera this Christmas? Then you may want a card that waives foreign transaction fees -- it could save you a lot of money in the long run.

So if your intent is to shop 'til you drop, it may be in your best interest to start with yourself and find a credit card that works harder for you.

An important tip: Remember that paying with a credit card is much more secure than your debit card. That's something to keep in mind as you shop this holiday season, especially online.

If your debit card is compromised, you're out all of the money -- it could be thousands of dollars from your checking or savings account—until the issue is resolved. With a credit card, you can dispute the charges before it’s time to pay, and your liability -- if any -- is usually $50 or less.

This article was written for our sponsor, Coastal Federal Credit Union.

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