Skip to main content

Selecting Your First Credit Card: 3 Costs to Keep in Mind

Credit cards are a valuable tool for building and maintaining good financial health. Unlike debit cards or cash, responsible credit card use can increase your credit score, provide cash back saving rewards, and offer extended purchase protection benefits. They also help increase your spending power and offer a more convenient way to manage your finances. But, choosing your first credit card without examining the cost of ownership can wreak havoc with your budget.

Selecting a credit card that supports your financial goals can be tricky. Here are three credit card expenses to watch out for when deciding on the best credit card for your financial toolbox.

Annual Fees

An annual fee is a charge automatically added to your credit card statement each year you own the card. Some credit card issuers may waive the fee as part of an introductory or promotional offer, but the average fee is approximately $100. Higher annual fees usually apply to consumers with poor credit histories. Other credit card issuers, like Prince George’s Community Federal Credit Union, offer no annual fee Visa® credit cards to all approved credit card applicants.

Annual Percentage Yield (APR)

If you only pay the minimum required payment on your credit card each month, the annual percentage rate (APR) will apply to the account balance. Some credit card issuers allow for a grace period before applying the APR or finance charge to any outstanding balance.

The lower the rate, the less it will cost you to make minimum payments each month. In contrast, the cost of carrying a balance will be higher with a higher APR.

Applicants with good credit histories are often eligible for lower rate credit cards. Shop around for the lowest APR before deciding on your perfect card.

Balance Transfer Fees

It’s possible to pay off a high-interest rate loan using a low-interest rate credit card. A balance transfer fee, typically 3% to 5% of the transfer amount, is standard. Some cards limit the amount of transfer. It might be a flat amount or a percentage of the approved credit card limit. Transfer fees may count toward the amount of allowable balance transfer.

For example, Matt Money’s new credit card has a credit limit of $6,000. It also has a $3,000 balance transfer limit and a 5% balance transfer fee. He wants to pay off his high-interest rate personal loan of $3,000 with his new credit card. But, Matt must settle with only reducing the personal loan by $2,850 since $150 in fees will be part of the transfer limit.

You can transfer up to the available credit limit and avoid paying the transfer fee with a Prince George’s Community Visa Elite Rewards® or Visa Platinum® credit card*.  These low-interest rate, no balance transfer fee credit cards make everyday purchases financially rewarding. Redeem points earned with the Visa Elite Rewards® card for merchandise, cash back, and gift cards.


As you narrow down your selection, be sure to review the credit card disclosure agreement for APR calculation details and descriptions of other potential fees. Knowing this data can help you select a card that supports your financial goals. Remember that there’s more to owning a credit card than knowing about the potential costs. Your credit card activity, including payment history and account balances, is reported to at least one of the major credit reporting bureaus. Make monthly payments on time and keep credit utilization low to maintain a good credit history.

Visit our credit card page to discover how you can save money with a low fixed rate Visa® credit card from Prince George’s Community Federal Credit Union. We make it easy to take advantage of no annual fees, low APRs, and no balance transfer fees when choosing your first credit card.

*Subject to credit approval. Terms and conditions apply.

Keeping You in the Know

  • Emergency Funds
  • 50/30/20 Rule
  • Meet Your 401(k)

Emergency Funds

3 Min Read

One of the most effective tools for preventing a large-scale financial disaster is an emergency fund…

Learn about Emergency Funds

50/30/20 Rule

7 Min Read

The 50/30/20 rule is a simple, practical rule of thumb for individuals who want a budget that is easy, yet effective, to implement…

How to Set Your New Budget

Meet Your 401(k)

3 Min Read

Even if you’re just starting your first real job—actually, especially if you’re just starting your first real job—it’s time to start thinking about retiring…

How to Plan for Retirement