With the introduction of our new credit card, the Founder’s Card, we’ve started to receive questions about which card our members should choose. While both cards offer great benefits, there are different perks to each.
The Classic Card
As of January 2017, our Classic Card continues to have a competitive interest rate, with a 9.9% Annual Percentage Rate (APR), which is much lower than most credit cards. According to Bankrate, from November 2016 to January 2017, the average credit card interest rate was just above 16% APR.
While it’s always best to only charge things to your credit card that you can pay off in full, there may be times when this isn’t possible – a family emergency, unexpected medical bills, etc. When something like this happens and you have to carry a balance on your card, having a low APR may save you money.
The Classic Card may also help you save money if you’re carrying a balance on a different card with a higher interest rate. The Classic Card offers Visa® balance transfers* with no PSECU balance transfer fees and, as of January 2017, a 2.9% APR until the end of December 2018. Transferring a balance to this card may help you pay off other debts faster by allowing more of your money to go toward the balance instead of interest.
The Founder’s Card
The Founder’s Card, which debuted in January 2017, carries slightly higher APRs but offers PSECU members a great cash rewards option.
The 12.9% Variable APR on the Founder’s Card is still lower than many other credit cards, helping you save money if you find yourself in a bind and have to carry a balance on your card. This card also offers a competitive balance transfer rate**. In January 2017, it was just slightly higher than the Classic Card, at 3.9% APR until the end of 2018, and also has no PSECU balance transfer fee.
Where the Founder’s Card truly shines is in the cash rewards it offers. When considering a rewards card, it’s important to be sure that the rewards you’ll earn will outweigh the cost of having the card. Whether or not this is true for you depends on several things, such as, if you plan to carry a balance on the card, how much that balance will be, the interest you’ll pay on any balance you carry, and what the rewards are. In this case, the Founder’s Card offers 1.5% cash rewards on every purchase***. The cash rewards never expire and can be used as payment on your card or can be redeemed into your PSECU account. If you’re an active credit card user, you may earn extra money simply by using the card.
How to Choose
Both the Classic Card and the Founder’s Card offer members great value. Since neither of the cards has annual, balance transfer, cash advance, or foreign transaction fees, you may easily save money.
Where the cards are truly different is in the interest rates and cash rewards. If you know that you’re likely to carry a balance, choosing the Classic Card with a lower interest rate may save you the most money in the long-run. If you pay off your balance in full each month, the slightly higher interest rate on the Founder’s Card may not impact your savings and you’ll earn cash rewards, as well. With the difference in APR on the Visa Balance Transfers, you’ll also want to consider how often you may want to move higher balances over, since the Founders Card carries a slightly higher rate.
If you’re having a tough time choosing, take some time to look over your accounts for the past 12 months – How often did you carry a balance on your credit cards? Did you use balance transfers regularly? Were you able to pay off your card in full each month? You should also take some time to think about the foreseeable future – Are you planning any big purchases with other cards that may cause you to use a Visa Balance Transfer? Do you have a savings goal that the cash rewards could help you work toward? Do you know of any bigger expenses coming up that may cause you to carry a balance? Your answers to these and other questions will impact what card may save you the most money. You can also use this chart to help you compare the two cards.
Find more money management tips and resources on our WalletWorks page.
* When you take advantage of the 2.9% APR (annual percentage rate) promotional offer, Visa® balance transfers will be treated as a cash advance and will accrue interest at 2.9% APR from the time that the transaction posts until 12/31/18; thereafter, any remaining balance will begin to accrue interest at the cash advance rate, which is currently 9.9% APR and subject to change. Payments will be applied as stated in your Visa Classic Consumer Credit Card Agreement. A minimum of $250 must be requested for balance transfers through online banking. Our 2.9% APR promotional offer cannot be used to pay off any PSECU loan or be made payable to cash, yourself, any joint owner(s) or co-maker(s). Balance transfers access credit under the terms of your Visa account as stated in the Visa Classic Consumer Credit Card Agreement.
** When you take advantage of the 3.9% APR (annual percentage rate) promotional offer, Visa® Founder’s Card balance transfers will be treated as a cash advance and will accrue interest at 3.9% APR from the time that the transaction posts until 12/31/18; thereafter, any remaining balance will begin to accrue interest at the cash advance rate, which is a variable APR equal to the Prime Rate plus a margin of 9.40%. Payments will be applied as stated in your PSECU Visa® Founder’s Card Consumer Credit Card Agreement. A minimum of $250 must be requested for balance transfers through online banking. Our 3.9% APR promotional offer cannot be used to pay off any PSECU loan or be made payable to cash, yourself, any joint owner(s) or co-maker(s). Balance transfers do not qualify as eligible purchases for the cash back reward program. Balance transfers access credit under the terms of your Visa Founder’s Card account as stated in the PSECU Visa® Founder’s Card Consumer Credit Card Agreement.
*** You can earn 1.5% cash rewards on purchases. See the PSECU Visa® Founder’s Card Rewards Program Terms and Conditions for full details.