How to Choose and Manage a Credit Card

Credit cards offer an array of features and options. But navigating this endless stream of opportunities can be simplified with the right guidance. By learning to compare credit offerings, understand key features and use credit responsibly, you can take yourself from novice to pro when shopping for and managing your credit cards.

Key takeaways:

• Credit cards offer a variety of features and perks, so it’s important to choose one that aligns with your financial goals.
• Your financial situation, why you want a credit card and how you plan to use it all influence which card is best for you.
• Common credit card benefits include cash back, rewards, low introductory APRs and minimal fees.
• Once you have a credit card, manage it responsibly by paying your balance in full and on time, avoiding overspending and keeping your credit utilization low.

Planning for a credit card

Choosing the right credit card can have a positive effect on your current and future finances. Instead of making a snap decision, creating a plan that includes your credit card goals could help you avoid expensive headaches later. Here are some things to consider.

Why do you want a credit card?

How will a credit card enhance your life? You should think of it as a tool that can give you a financial boost when needed—not a crutch that can sink you deep into debt. Are you hoping the card will help you improve your credit, finance a trip or save money on interest? Being clear on why you want a credit card will help you determine which offers to evaluate and which ones to pass on.

How do you plan on using a credit card?

Do you want to use your card for everyday spending—such as gas or groceries—or for a one-time purchase that you can pay off over time? Do you have a loan balance that you want to transfer to a card with a lower interest rate, or do you want to cut back on using your debit card? Knowing how you plan to use your card can help you determine which options best suit your needs.

Assess your finances

Paying the entire balance on your credit card each month can help you avoid costly interest. To determine how much you can afford to charge, note your take-home pay, average monthly bills, spending habits and existing debts.

What's your credit score?

Your credit score can affect the amount of interest you have to pay. If you have a high credit score, you may be offered a lower interest rate on a credit card. If your score is low, it may be better to wait until you improve it before applying for a credit card.

Check for preapproval

When you apply for a credit card, a lender pulls your credit report, which can lower your credit score. But when you get preapproved, the issuer uses screening tools to assess your creditworthiness, which does not affect your credit score. A full credit check will still be required before you’re officially approved for a card, but getting preapproved first allows you to pause the process and see whether it’s worth applying.

Plan for responsible credit card use

Make sure you understand how to use credit cards wisely. Steps you might take to manage your credit include setting a realistic budget for card spending, identifying which monthly bills you’ll charge to your card and utilizing payment reminders to avoid having to pay late fees.

Compare credit cards

Once you understand what you want in a credit card, it’s time to find a card that fits your needs and goals. Applying for multiple cards at once may not be the best approach. Every time you apply for a new card, a credit inquiry is triggered. Multiple inquiries may have a negative impact on your overall credit score.

A number of third-party sites offer online tools that can help you compare credit cards by criteria such as spending habits, financial goals and projected interest rates.

What are the different types of credit cards?

Not all credit cards are the same. Some have generous rewards such as cash back and travel points. Others are designed to help you build or improve credit, such as secured cards.

What perks and features do you want?

As you consider different types of credit cards, determine what features you value the most.Potential perks and features include cash back, rewards, travel insurance and minimal fees.

How will you use the card?

Consider your financial situation and money goals when choosing a credit card. If you’re not planning to carry a balance, you may prefer a card that offers rewards or cash back. On the other hand, a low-interest card might be the best option if you are trying to pay off debt. Secured credit cards, which require a deposit that serves as the credit line, can help you build credit.

How to choose a credit card

What are the different types of Fifth Third credit cards?

Whether you’re an existing customer of Fifth Third Bank or are considering becoming one, check out our;credit card optionsto find one that suits your needs.

1.67% Cash/Back Card

If you want to be rewarded for every purchase you make, the Fifth Third 1.67% Cash/Back Card lets you earn 1.67% cash back on all purchases. You’ll also pay no annual fee². Cardholders can save money with a 0% intro APR for balance transfers for an introductory period.

1% Cash/Back Card

If you’re focused on paying down debt, the Fifth Third 1% Cash/Back Card offers a 0% intro APR for 15 months on purchases and balance transfers. It also has no annual fee and offers unlimited 1% cash back on all purchases.

Preferred Cash/Back Card

You can earn 2% back for every purchase using the Fifth Third Preferred Cash/Back Card. There’s also no annual fee. This card is only available to Fifth Third Preferred Banking clients.

Fifth Third Secured Card

The Fifth Third Secured Card lets you build credit if you have a limited credit history or improve your credit if you’ve experienced a financial setback. You deposit as little as $300 to an interest-earning account and that secures your credit limit.

Credit card perks and features

Credit cards also offer perks designed to appeal to cardholders. Perks like mileage points, concierge services and travel insurance might be important to you. If you like to shop, price protection, rewards and extended warranties might be more to your liking. Or maybe you just like earning cash back every time you spend. Some cards offer minimal fees as a benefit. For example, Fifth Third’s 1.67% Cash/Back Card comes with no annual fee. ²

Credit card uses

You can use credit cards to help manage your finances in many ways.

• You can better control cash flow by making everyday purchases such as groceries, streaming subscriptions and utility bills and then paying the entire balance at the end of the month.
• You can cover emergency expenses and pay the balance off over time.
• You can earn cash back or rewards. Fifth Third’s 1.67% Cash/Back Card gives you 1.67% back for every dollar you spend.
• You can build or improve your credit history. The Fifth Third Secure Card lets you use your cash to secure a line of credit so you can increase your creditworthiness.

Credit card terms to know

There are several key terms you should familiarize yourself with as you begin comparing offers and weighing your options.

APR

The annual percentage rate (APR) is the annual rate charged to you for borrowing money using your credit card. The APR may differ by the type of transaction—such as a purchase, a cash advance or a balance transfer.

Credit card fees

These are any fees that may be associated with the card. An annual fee is a yearly fee charged by the credit card company to use the card. A balance transfer fee is a charge applied when you move an existing balance from one card to another, and it’s usually calculated as a percentage of the amount transferred or set as a flat dollar amount. Other fees may include cash advance fees, convenience check fees or international transaction fees.

Credit card rewards

Some credit cards earn points or percentages for every dollar you charge on your card and present those points and percentages as rewards. The amount you can earn often varies, depending on the type of purchase being made. For example, a rewards card may let you earn higher reward amounts at certain merchants, such as gas stations or grocery stores, while other merchants or types of purchases earn smaller reward amounts.

Introductory and promotional APRs

Some credit cards provide introductory or promotional APRs as an incentive to apply. These offers may include reduced or even 0% interest on purchases or balance transfers, but only for a set promotional period.

Minimum payment

The minimum payment amount is the least amount a cardholder can pay each month to avoid late fees and keep their credit card account in good standing.

Penalty APR

Some credit cards will present a penalty APR if an account falls delinquent, goes overlimit or has a payment returned. This penalty APR will replace—and be higher than—your current rate.

Statement balance vs. current balance

The statement balance is the amount owed by a cardholder at the end of a billing cycle. The current balance is the total amount owed in real time, which could reflect new charges or posted payments.

You can find additional terms related to credit cards here.

Apply for a credit card

Once you’ve decided what credit card you’d like to apply for, you’ll need to gather personal information such as your name, address and Social Security number. You also may need proof of income such as a pay stub and a list of monthly expenses including rent payments.

You can apply for a Fifth Third credit card online, through the Fifth Third mobile app, by phone or in person at a banking center. Once you’ve been approved, you will receive your card and you can activate it online.

How to manage a credit card

Once you’ve been approved for a credit card, the most important work begins—managing your card responsibly. The following steps can help you build your credit history and maintain a strong credit score.

Credit card management tips

• Review your credit card statement every month to make sure there are no unauthorized charges.
• Pay your balance in full and on time to avoid paying interest and accruing debt.
• Keep your credit utilization low, meaning you use only a small portion of your available credit.
• Set up autopay or payment reminders so you don’t forget to make a payment.
• Take advantage of rewards.
• Create a budget to ensure you don’t overspend.

Three Things to Do

• Review Fifth Third’s credit card offers.
• Explore strategies to make the most of your credit cards.
• Decide if a secured or unsecured credit cardis best for you.