Credit Cards from UBT

Credit card rewards are earned when you make a purchase with your card. Depending on the card, these rewards can be in the form of cash back, specific points such as airline miles or hotel rewards, or flexible reward points that could be redeemed for gift cards, merchandise, and other goodies (often including cash back as an option). Whenever you use a rewards card, you’ll receive one of these benefits as a thank you from the card issuer. Most types of rewards work in much the same way, but not all credit card rewards are created equal. Which perk is best for you depends on your spending habits and lifestyle. A benefits breakdown may help you figure out which perks are best for you, and we can also provide some inspiration if you’re not sure how to use your accumulated credit card rewards.

Some card issuers charge an annual fee to offset the issuer’s risk and expense — such as in the case of a secured card. If you’re building credit or working to increase your credit score and are going the secured card route, the expense of an annual fee makes total sense (the annual fee usually gets added to your balance as a purchase, if you’re wondering how that works). However, many unsecured cards charge an annual fee these days, as well. The card issuer may assess these fees to help pay for the rewards offered, but in most cases, rewards cards that don’t charge annual fees offer comparable rewards — and a better long-term value — than those that do. And no-annual-fee credit cards make it easy to come out ahead, regardless of your spending. Really, when you can find a great rewards credit card that doesn’t carry an annual fee, why pay up every year if you don't have to?

Think of an introductory offer as the red carpet of the credit card world, whether it’s bonus reward points or a special interest rate. An introductory annual percentage rate (or APR) is a low promotional interest rate that credit card companies extend to customers for a set number of months after they open an account. This introductory APR might cover purchases, balance transfers, or both. The most obvious advantage of an introductory interest rate — especially when it is 0% — is the money it will save you in interest costs. The introductory period begins as soon as the account is granted, so if your card comes with a 0% intro APR for six months and the credit card was issued to you on December 1, you have until June 1 to charge and/or pay off the debt without adding any additional financing fees, so long as you adhere to the terms of the account. So, you basically have a built-in, interest-free, short-term loan. How smart is that?

When the promotional interest period is up, the interest rate reverts to the card issuer’s regular credit card rate. The rate, unlike a mortgage or loan, is usually variable, with a base rate and margin set by the credit card issuer (this is largely based on the customer’s credit history), plus any changes in the federal prime interest rate.

A balance transfer is a process that lets you move debt, or a “balance,” from a credit card or loan to another credit card. In some cases, it can reduce the amount of interest you’ll pay, assuming the balance is transferred to a lower-interest card, which can save you big. It can also help to simplify your payments by combining multiple payments onto one card.  

Some balance transfer cards offer an introductory 0% interest rate on the transferred balance, giving you several months to make payments without being charged any interest at all. With some smart timing and discipline, a balance transfer can be a good idea.

Financial matters can sometimes be complicated, but understanding your credit doesn’t have to be. And with all tools, it’s important to maintain a sharp edge. We’ve put together more resources on boosting cash flow and using credit successfully to add to your credit toolbox.