Understanding Credit Cards

Credit cards can be powerful financial tools when used responsibly. Let’s explore the basics of credit cards, including how interest is charged, the concept of balance transfers, earning reward points, secured credit cards and how credit cards can help improve your credit score.

How Interest is Charged:
When you use a credit card, any outstanding balance at the end of each billing cycle accumulates interest charges. Here's what you need to know:

• Credit Card APR: APR stands for Annual Percentage Rate, which is the interest rate applied to your outstanding balance. It's important to understand the APR before using your credit card.
• Grace Period: Some credit cards offer a grace period, which is a window of time, usually 21-25 days, during which no interest is charged on new purchases if you pay your statement balance in full. 
• Minimum Payment: If you cannot pay your full statement balance, you must at least make the minimum payment by the due date. However, paying only the minimum amount will result in interest charges on the remaining balance.

Balance Transfers:
Balance transfers allow you to move your existing credit card balance from one card to another, often with a promotional interest rate. Consider the following:

• Lower Interest Rates: Balance transfer offers may provide a lower or even 0% APR for a limited period, allowing you to save on interest charges.
• Transfer Fees: Some credit card issuers charge a fee to transfer your balance, typically a percentage of the amount being transferred. Be sure to factor in these fees when considering a transfer.
• Promotional Period: The low or 0% interest rate on balance transfers is usually for a specific duration, often ranging from six to 18 months. After the promotional period ends, your approved interest rate from your issuer applies.
• Advancial’s Visa^® Rewards Plus card is an excellent option for balance transfers. There’s no balance transfer fee, and you’ll receive a 0% introductory APR for the first 12 months. After that, your rate will only be 8.90% - 14.90% based on creditworthiness.

Reward Points and Maximizing Rewards:
Credit cards often offer reward programs where you earn points on your purchases. To get the most out of these rewards:

• Choose the Right Card: Look for credit cards that align with your spending habits and offer rewards on all purchases or a card that focuses on the purchases you make most frequently, such as groceries, travel or gas.
• Utilize Sign-Up Bonuses: Many credit cards offer sign-up bonuses, where you earn a significant number of reward points after spending a certain amount within a specified period. For example, Visa Rewards Plus offers $100 cash back value if you spend just $500 in the first 90 days after account opening.
• Pick the Right Rewards: Some cards exclusively offer airline rewards for a specific carrier, or some offer only cash back. Pick the rewards program that meets your specific needs.
• Responsible Usage: Always pay your credit card balance in full and on time to avoid interest charges. This way, you can maximize the value of your reward points without accumulating debt!

Visa Rewards Plus offers up to 1.5% unlimited rewards on all purchases if you spend $2,500+ or make 25+ purchases in one statement cycle. Best of all, you can redeem those reward points for cash back, gift cards, travel, merchandise or almost anything else!

Extra Financial Security:
Most credit cards include security features that help protect you as you navigate our increasingly digital world.

• Fraud Protection: Most credit cards offer zero liability fraud protection, which protects you against unauthorized charges if your card is lost, stolen or compromised.
• Secure Technology: Credit cards use secure technology like chip and PIN or contactless payments, making it harder for thieves to steal your card information.
• Card Controls: Visa Rewards Plus offers advanced security features, like Card Controls, which allow you to lock/unlock your card with the push of a button, limit what kinds of transactions your card can be used for or even limit the geographic area in which it can be used.

Using Credit Cards Responsibly
Credit cards can be instrumental in building and improving your credit score if you use them responsibly. Follow these tips to make sure your credit card works for you:

• Timely Payments: Pay your credit card bill on time every month to establish a record of responsible payment behavior.
• Low Credit Utilization: Keep your credit utilization ratio, which is the amount of credit you're using compared to your credit limit, below 30% to demonstrate responsible credit management. 
• Regular Usage: Use your credit card for small purchases, and pay off the balance in full each month. This shows active and responsible credit usage.

Credit cards can be an excellent financial tool when used responsibly. With added convenience, security and the benefit of rewards, adding the right credit card to your wallet can greatly improve your financial health. With credit cards like Visa Rewards Plus, you don’t have to pick between a lower rate and unlimited rewards – you’ll get both! Discover all of the benefits of using Visa Rewards Plus for your everyday spending.