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Selecting a Credit Card, Explained

Hands hold two Virginia Credit Union Mastercard credit cards — a cash rewards card and a flex rewards card — in front of a gradient green background.

If you feel like every time you go shopping, you’re offered a new credit card, you’re not alone. So which credit cards should you have? How many is too many? How can you be sure you have the best credit card — with the best benefits and rewards — for your financial goals?

Let’s break it down.

Why choosing the right credit card matters 

Credit cards are useful tools for everyday spending and building credit. Gone are the days of carrying cash and checkbooks. 

But not all cards are the same. Fees, reward structures, and interest rates can vary widely. Before selecting and applying for a credit card, it helps to know what to look for and compare features. This will ensure you find the best fit for your lifestyle and financial goals.

Key credit card fees to compare

Credit card fees are one of the first things you should review when comparing cards. Look for details on annual fees, foreign transaction fees, cash advance fees, and any other fees in the fine print. 

Let’s talk more about the most common fees you’ll see.

  1. Annual fees

    Some credit cards such as premium travel or rewards cards will charge a yearly annual fee simply for keeping the account open. These can range from $95 on the low end to $500 or more for premium cards. The credit card companies may waive this in the first year as an incentive for signing on, so make sure to read the fine print so you aren't surprised in year two when you're sent a big annual fee bill.

    Many everyday cards charge no annual fee, making them a practical option for everyday purchases. 

  2. Foreign transaction fees

    Foreign transaction fees are another fee to look for. If you plan to make purchases while traveling outside of the U.S. and paying in another currency, check your card details to see what the additional expenses will be. These are typically 1%-3% of the purchase price. Choosing a credit card with no foreign transaction fees can be especially helpful for frequent travelers. 

  3. Cash advance fees

    Cash advances allow cardholders to withdraw cash from their credit card. But sometimes there’s a fee for doing so. Typically, this fee is a percentage of the amount withdrawn. Before taking out a cash advance, make sure you know if you’ll be charged a fee or if your card waives the cash advance fee.

    VACU credit cards have no annual fees, cash advance fees, or foreign transaction fees. 

Learn More: Compare VACU credit cards

  1. Annual Percentage Rate (APR) 

    APR stands for Annual Percentage Rate, which means how much interest the credit card company charges you per year if you carry a balance. The APR is basically the price you’ll pay to borrow money from the credit card company. The higher the APR, the more interest you’ll pay each month.

    A credit card with a lower APR can help reduce borrowing costs over time if you plan to carry a balance. Paying your statement balance in full each month will help you avoid interest charges and avoid accumulating debt. 

    As a not-for-profit, Virginia Credit Union answers to our members — not shareholders. That means we can return our earnings to our members through more attractive rates.

    Now that you have an understanding of the fees that come with opening a credit card, let’s take a look at some of the benefits.

Cashback vs. rewards credit cards

Many credit cards offer perks for everyday purchases. The two most common types are cashback and rewards (also called points) credit cards. It’s a good idea to pick one main card and stick with it. 

Whether you pick cashback or points, using one main credit card will let you easily see how much you spend, track your earnings, and pay off your bill each month. 

Cashback credit cards

Simply put, cashback cards give you a percentage of your purchases back as cash rewards.

Benefits of cashback credit cards:

  • Easy to understand
  • Rewards are often redeemable as statement credits or cash deposits
  • Good for everyday spending
  • Predictable return rates

Drawbacks of cashback credit cards:

  • Some cards cap earnings in certain categories.
  • The total cash back you receive may be lower than the value of rewards you could earn with the same spend on a rewards program.

Rewards credit cards

Rewards cards allow you to earn points or miles that can be redeemed for travel, gift cards, or other purchases. 

Benefits of rewards credit cards:

  • Frequent travelers may get more overall value from rewards (like points or miles) than they would from cash back, depending on how they use them.
  • Bonus categories may boost earnings (dining, gas, groceries, or travel).

Drawbacks of rewards credit cards:

  • Points systems can be more complex.
  • Redemption can be complicated.
  • Some rewards cards have higher APRs than non-rewards cards.

Which credit card is right for me?

Choosing the right credit card starts with thinking about how you actually use money day to day. If you travel often, a card with travel rewards or airline perks might offer the most value. If you prefer something simple, a cashback card can make it easy to earn rewards on everyday purchases. 

It’s also important to consider whether you typically pay your balance in full each month or sometimes carry a balance, since interest rates can make a big difference over time. If keeping costs low matters to you, look closely at annual fees, APR, and other charges. By thinking through these factors, you can choose a credit card that fits your lifestyle and helps you get the most out of the way you spend.

At VACU, we offer both cashback and rewards, so no matter your preference, you’ve got options.

Last Updated: April 1, 2026
Credit Cards Credit Building

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