In 2020, the Federal Reserve found that more than 80% of American adults to have at least one credit card. Since then, that number has jump up to 84% in the Federal Reserve’s 2021 Economic Well-Being of U.S. Households (SHED) report.
With so many Americans owning at least one credit card, it’s no surprise that people want to get the best credit card rates and bonus credit card rewards possible. Plus, aside from the rates and rewards, there are important practical reasons for owning a credit card. They help millions of people build credit, obtain consumer protections, and defer paying expenses.
So, whether you own a credit card or are looking to own another one with better rates and rewards, you may be asking yourself, “How do I get a low interest rate credit card with additional perks like frequent-flyer miles or cash-back?”
In this guide, we’ll help you answer this question by going over everything you need to know about a credit card. Here, you’ll learn:
· What it is a credit card
· How does a credit card work
· What are the specific benefits of owning a credit card
· Why you should apply for a low rate credit card through your local credit union
· And much more!
Buckle up and let’s get underway!
What is a Credit Card?
According to Investopedia, “A credit card is a thin rectangular piece of plastic or metal issued by a bank or financial services company that allows cardholders to borrow funds with which to pay for goods and services with merchants that accept cards for payment.” They can come with special features like tap and pay or an embedded microchip.
Another way to think about credit cards is a line of credit. From there, you’re responsible for paying at least the minimum payment every month by the due date on the balance. If you don’t make your minimum payment, you could be subjected to late fees and interest.
Depending on the bank of financial service you receive your card from, your credit card can have different terms. This means your late fees, interest, advantages, and borrowing limits could be less or more expensive than someone else with a different credit card.
6 Most Common Credit Card Types
It’s key to do your homework to find the best and lowest annual percentage rate (APR) on your credit card. Here, are some of the most common types of credit cards:
1. Store Credit Card: If you’re over the age of 18, you’ve probably been asked at a retail store if you wanted to sign-up for a store credit card in exchange for a discount. These store cards are generally used only with the specific store and come with some great perks and rewards program. However, beware of their high interest rates and deferred interest charges.
2. Co-branded Credit Cards: “Co-branded credit cards are store or brand credit cards offered through traditional card issuer like Chase, Citi, or American Express,” says Bankrate. “their rewards are solid, and in many cases, the values of these rewards (like free hotel nights) end up being worth more than cash back.”
3. Zero percent intro APR credit cards and low-interest credit cards: There are many credit cards available that offer no interest within 18 months of receiving your card. There are also some low-interest credit cards that offer lower than average rates beyond the introductory 18 months.
4. Travel Credit Cards: Travel credit cards offer you rewards specifically around travel. You can earn specific points within certain airline or hotel programs, which allow you to earn frequent flyer miles or hotel night stays.
5. Cash Back Credit Cards: If you’re looking to earn cash on your purchases, a cash back credit card may be a good option for you. You’ll want to look into different cash back rewards. Depending on the card, you may be able to earn bonus points in certain categories that you spend the most in.
6. Rewards Credit Cards: Rewards credit cards are great for everyday purchases. They help you earn cash back and travel rewards for your average expenses. These rewards typically show up as points or cash back.
What’s the Difference between a Credit Card and Debit Card?
Like a credit card, a debit card is also a thin rectangular piece of plastic or metal issued by a bank or financial services company. It can also be used to purchase goods or services. So, what’s the difference?
A debit card allows you to spend money directly out of your account. You don’t have a line of credit up to a certain amount like you would with a credit card. Plus, a debit card can’t help you build credit.
In sum, think of a debit card like cash and a credit card like a line of credit.
Why are Credit Cards Better than Debit Cards?
There are some major differences between a credit card and debit card. Depending on your financial goals, it’s good to know why a credit card is better than a debit card. Below, we’ll outline the key advantages of a credit card and why it can be better than a debit card.
#1 Build Credit
Credit cards are key to building and maintaining good credit. Having a higher credit score can save you hundreds of thousands of dollars in the long run. From helping you achieve lower loan rates to making you eligible for higher credit limits, you’ll want to start using a credit card as a financial stepping stone.
Capital One says a good credit range can be considered very good, excellent, and exceptional. These scores may vary depending on the credit-scoring company, but the typical range of a good credit score is 670 to 739.
#2 Fraud Protection
Credit cards are backed up by federal law under The Fair Credit Billing Act (FCBA) to help you against credit card fraud. It minimizes your maximum liability to $50. In short, this means you won’t be held liable for any amount of fraudulent purchases on your credit card.
Unfortunately, debit cards don’t have the same level of fraud protection. While consumers are protected by the Electronic Funds Transfer Act (EFTA), the consumer’s liability for any fraudulent transactions could be much higher if not caught within 48 hours.
IdentityIQ reports that there are four tiers of the EFTA to know:
1. If a lost or stolen debit card is reported within 48 hours, the consumer’s liability for any fraudulent transactions is limited to $50.
2. If a lost or stolen debit card is reported after 48 hours but within 60 days, the consumer’s liability is limited to $500.
3. If a lost or stolen debit card isn’t reported within 60 days, the consumer is liable for any and all fraudulent charges incurred. This includes all money drained from the debit card account, any overdraft fees, and money taken from any accounts that are linked to the debit card account.
4. If a debit card was not lost or stolen, but its number was stolen and used for a fraudulent transaction, the consumer has 60 days to report the charge with no liability. The 60 days begins on the date the consumer receives their statement with the fraudulent transaction.
#3 Borrowed Funds
As discussed above, credit cards allow you to make large purchases within a specific credit limit. This can be extremely beneficial if you have an emergency expense that you can’t pay upfront. Borrowing funds from your credit limit is one of the biggest benefits to owning a credit card because it offers you amazing convenience.
#4 Reward Programs + Cash Back
Who doesn’t love cash back or receiving premium discounts and rates? Credit cards have the ability to reward you on everyday purchases, so you’re essentially earning money as you go. Plus, depending on your credit card, you can earn rewards for specific industries like travel or retail.
Why Should I Look into a VISA Credit Card?
CreditCards.com reported that at the end of September 2020 there were 343 million Visa credit cards in circulation in the U.S. and 798 million outside of the U.S.
As the largest of the four major U.S. credit card networks, there are many benefits that come with a Visa card. Let’s walkthrough the advantages of having a credit card with Visa.
Benefit 1: VISA Assistance Services
On top of a great rate, you deserve added value benefits. An example of these benefits can include First New York Federal Credit Union’s Visa Gold Credit Card. This card grants you access to helpful perks that can help you travel domestic or abroad. Some of these Visa Assistance Services include:
· Emergency card and cash replacement: Visa will arrange to get you an emergency replacement card or cash asap. Just call and we will block your card (if the card number is known) and connect you with your financial institution/bank.
· ATM Location Service: Whether you’re at home or traveling, Visa’s ATM Banking Locator will help you find a way to conveniently access funds.
· Travel Assistance Service: Visa will provide you with a Benefit Administrator, who can connect you with appropriate local emergency and assistance resources available, 24 hours a day, 365 days a year.
Benefit 2: VISA Purchase Alerts
By being a Visa cardholder, you can sign-up for Visa Purchase Alerts that give you real-time transaction notifications. This is a quick and easy way to help identify possible fraudulent activities anywhere.
Benefit 3: Worldwide acceptance
This is a big benefit for those who travel or plan on travelling in the future. You can easily pay for goods and services, no matter where you go.
Benefit 4: Special Reward Programs
When you get a First New York Federal Credit Union’s Visa Gold Credit Card, you get access to a ScoreCard Bonus Point Program, where you earn one point for every dollar charged. All of your purchases earn points which can be redeemed for gifts, products and travel awards. This is a great visa credit card reward that let’s you build up points — fast.
Why Should I Go To a Credit Union for a Credit Card?
It’s simple. Because credit unions are member-owned, you can take advantage of lower fees and interest rates as a member. So, by becoming a member, you can easily save more and gain access to added value benefits, like the ones mentioned above.
Top Benefits of a First New York VISA Credit Card
Other than it being a low cost Visa credit card, First New York’s Visa Credit Card has no annual fee, a 25-day interest-free grace period on purchases, the ScoreCard Bonus Point Program, where you earn one point for every dollar charged for purchases and Visa Purchase Alerts to help monitor your account activity wherever you are.
So, the next time you’re searching for “credit cards with low interest rates,” “best Visa credit card,” and “best Visa cards,” look no further than First New York. We’ll help you get apply for a Visa credit card with a credit union low interest rate.
That’s the best way to find “the best credit cards near me” (without all of the fuss).
How to Apply for a First New York VISA Credit Card
If you’re ready to start building your credit or take advantage of lower interest rates, you can apply to First New York’s Visa Credit Card in three steps.
1. Make sure you’re a First New York Federal Credit Union member. If you’re not currently one, become a member online.
2. Apply now on our website. Fill out and submit the three sections of our Visa credit card application.
3. Get your card in the mail or instantly printed at one of our locations.
Need Help: Contact Us
Still have questions? We’re here to help answer them. Contact us or call (518) 393-1326 (or toll free at 800-734-7375), and press 2 to speak with a Member Service Specialist. Contact Center is available Monday-Friday from 7 a.m. until 6 p.m. and on Saturday from 9 a.m. until 1 p.m.