Whether you have a burning desire to multiply your purchasing power or you are simply getting started, consider adding the credit card that is right for you to your financial arsenal. This thin, plastic tool can ignite your credit scores, add sparkle to your lifestyle, and illuminate many cost-saving benefits. But your credit health is key to determining whether a traditional or a savings-secured credit card is the best choice for your situation.
Read on to learn what's hot - or not - about these two cards, and why it matters.
How does a credit card work?
Financial institutions issue credit cards to qualified applicants at various interest rates and repayment terms. Most cards come with pre-set credit limits which you can borrow against to pay for recurring monthly bills or one-time purchases. As you make charges on the card, you decrease the available balance. You can continually borrow and repay funds if the card is in good standing.
Repayment details are based on the credit card issuer's billing cycle, typically 28 to 31 days. During that time, all charges are added to the account statement. Once the billing cycle ends, you'll receive a copy of the statement to either make the minimum required payment on the borrowed amount or pay charges in full.
If you prefer to take your time paying the charges, expect to repay more than you borrowed. Interest fees are added to the outstanding balance if you don't pay it in full by the due date.
Traditional Credit Card Features
When most people think about using a credit card, they often imagine a standard or rewards-based card.
Standard cards - These basic credit cards offer cardholders low or no annual fees along with competitive interest rates. The Logix Platinum Mastercard® Credit Card, offers our lowest possible rate, along with other benefits such as rental car coverage and trip cancellation insurance.
Reward cards - In addition to the benefits found with standard cards, reward cards offer various perks set by the credit card issuer. For example, the Logix Platinum Rewards Mastercard® Credit Card offers 1.5, 2 or even 3 points per dollar with your Logix Relationship Rewards status for every dollar spent using the card. Points can be redeemed for cash back, gift cards, or merchandise.
Both types of cards also offer a 0% introductory APR for purchases, and an APR as low as 3.99% on cash advances and balance transfers during the first 12 months. They will also require an application and credit check. The card issuer will also want to review your employment status and income to verify you can repay a short-term loan.
Standard credit cards are often recommended if you expect to carry a balance each month. Reward credit cards are often preferred by cardholders who intend to pay off the balance by the due date. This is because carrying a balance results in interest charges that could easily be greater than the value of the rewards earned.
Secured Credit Card Features
Most secured credit cards look just like traditional credit cards. However, unlike traditional cards, secured cards require collateral in the form of a deposit to secure the loan. Funds are typically placed in a restricted savings account.
You can make charges up to the credit limit and repay the balance, the same as with a traditional card. It's important to remember that the deposit stays in the account and is not considered pre-payment on your credit card charges. Make sure to review the credit card's disclosure statement for further details.
Like the Logix Savings Secured MasterCard®, secured cards are ideal for borrowers new to credit or those hoping to heal a bruised credit profile. These cards offer a smart way to help reestablish creditworthiness. Remember that repayment activity can be reported to at least one of the major credit reporting bureaus.
Logix offers a variety of low-interest rate traditional and secured credit cards with some great benefits. Not sure which is right for you? Click here to learn more and fan the flames for a bright financial future.
*Please contact Logix at (800) 328-5328 or visit www.lfcu.com if you have any questions about this topic or would like to consider opening an account.
APR = Annual Percentage Rate and is Subject to change. Logix Credit Cards are available in the following states: AZ, CA, DC, MA, MD, ME, NH, NV, and VA. Qualification requirements and restrictions apply. Logix Membership required.
Introductory Rate on Platinum and Platinum Rewards Credit Card: Introductory Rate is available to members who meet minimum credit score and underwriting criteria. Cardholder must qualify. Credit card purchases made during the first 12 months your credit card account is open qualify for 0% APR for 12 months (365 days from the date your account is opened). Cash advances and balance transfers made during the first 12 months your credit card account is open quality for 3.99% APR to 8.99% APR for 12 months (365 days from the date your account is opened). When the Introductory Rate period has ended, the rate applied to any remaining outstanding balance for those transactions will be at the cardholder’s standard Credit Card rate. (Platinum Credit Cards that are share secured are excluded from the Introductory Offers).
Logix Smarter Banking is a registered trademark of Logix Federal Credit Union. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.