Find the Right Card

Aside from finding a card that fits your credit score, picking the right one usually involves a tradeoff between costs and rewards.

The Costs of Credit Cards

Credit cards usually come with some costs, even when used responsibly. In addition to interest charged if you carry a balance, most cards come with fees.

The Types of Fees


Many cards don't have an annual fee, but if you choose a card that has one, ensure the rewards offset a cost that could range from $50 to several hundred dollars.

Late Payment

These penalties are usually $25 to $40 and are charged when the minimum balance is not paid by the billing due date. 

Foreign Transaction

Some credit card issuers charge a fee on transactions made with non-U.S. merchants.

Balance Transfer

This fee is charged when transferring a card's balance to a card with a lower interest rate. 

Cash Advance

When making a cash advance, this fee is often about 2% to 3% of the cash withdrawn.

How Interest Works

What is Interest?

Interest is computed on any portion of your balance not paid by the statement due date and applied as a "finance charge".

How is It Determined?

Your interest rate is based off of the U.S. prime rate, plus a variable rate reflective of your creditworthiness.

What is APR?

Annual percentage rate, or APR, is the interest rate applied to outstanding balances, expressed in annual form.

Credit Card Rewards

One of the great perks of credit cards are their rewards programs that give you an opportunity to earn cashback and loyalty points on everyday spending that you do anyway.

The Types of Rewards


Cashback cards earn cash rewards of at least 1% on all purchases and typically even higher on select categories.

Reward Points

These cards accrue rewards based on pre-defined rates for select categories or merchants, along with an introductory bonus. 

How to Redeem Rewards

Online Shopping

Cash and rewards points can be redeemed for gift cards or other goods through issuers' e-commerce portals. 

Award Travel

Travel rewards can be used to book flights and hotel directly from the travel partner or issuer's travel booking portal.


Cashback can be paid out in the form of a check upon the cardholder's request.

Statement Credit

Since rewards are really a currency themselves, issuers usually allow them to be applied to your balance.


Some rewards cards allow you to transfer your rewards points from one loyalty program to another.


Seek cards that reward where you spend most

While it's tempting to pursue a travel rewards card that gets you the miles you need for a flight at spring break, you may be able to earn higher amounts of rewards with a card that pays bonuses on categories or brands that you spend on regularly, such as groceries.

Common Card Issuers

Known for their travel rewards cards, such as their Venture and Quicksilver cards.

Recognized as a great brand for college students but is not always accepted everywhere.

Recognized as a premier brand for business travelers but is not always accepted everywhere.

Offers a wide variety of reward and co-branded cards, like the United MileagePlus card.

Do Personal Finance Yourself.

© 2023 by AHFA. Proudly created with

  • Grey Instagram Icon
  • Grey Twitter Icon
  • Grey Facebook Icon