Credit cards can provide plenty of spending opportunities, but keeping your purchases in check is an important part of your financial health. After all, you need to incur some debt so you can establish and maintain a credit score, but paying off the debt is what really impacts your finances.
In this guide, we’ll explain some common credit-related terms, how to determine if you have the right number of credit cards, how much you should spend, and why your credit score matters and ways to improve it. We’ll also discuss the optimal credit card mix and ways AAA Banking can assist with your finances.
To master your credit, it’s important to understand financial terms. Here are definitions for some of the most commonly used phrases related to credit cards:
Protect yourself from fraud: AAA has tips for keeping your credit cards safe and secure.
Read moreApplying for a credit card is often a first step in establishing creditworthiness. AAA answers a few of the most common questions members have about credit cards and credit scores.
You need to have one or more credit cards to create a credit history, which then factors into your credit score. A credit score is important because it’s a metric used by many banks and institutions to assess your financial trustworthiness.
The number of credit cards you have lining your wallet will depend on several factors. If you shop at different retail stores, you may have a store card for each. You may also have one for special purchases or because you get rewards for activities like travel.
But be cautious when opening a number of cards because each one sets off a hard inquiry (a request by the creditor to check out your credit report), and too many inquiries can ding your credit score.
Your credit score is calculated using a precise formula of five factors:
The better your habits are within these five categories, the better your credit score will likely be. But if you have a low credit score, there are simple steps you can take to improve the number.
Each person with established credit will likely have three unique credit scores—one from each of the three main credit bureaus, which are Experian, TransUnion and Equifax. Your three credit scores will vary because each credit bureau weighs the five contributing factors differently.
While credit scores shift over time, your goal should be to keep them in the same ballpark from month to month. A dramatic drop of 50 points or more should prompt you to take notice—and take action. Here are a few steps you can take to improve your credit score right now:
There’s no shortage of credit cards with great perks—but AAA Members have even more advantages with the AAA Cashback Visa Signature® Card. See the world and enjoy travel rewards. Save on your home and auto insurance. Enjoy cash back on any qualifying AAA purchase, from household items to tickets and events.
AAA is your go-to source for assistance with building credit, handling debt management, saving for the future and much more. AAA Banking experts are available to help answer all of your credit card questions—and any others related to savings and savings accounts, certificates of deposit, auto loans and more.
The AAA Cashback Visa Signature® Card has benefits only you and other members can enjoy. Open your account today.
This information is being provided for general informational purposes only. The Auto Club Group does not assume any liability in connection with providing this information.
Annual Percentage Rate (APR)
We may change APRs, fees, and other Account terms in the future based on your experience with ACG Card Services and its affiliates as provided under the Cardmember Agreement and applicable law.
1Cash back can be redeemed in the form of a statement credit or ACH deposit ($25 cash back minimum redemption). Cash back is not earned on business related transactions or activities. You may not redeem cash back, and you will immediately lose all of your cash back, if your account is closed to future transactions (including, but not limited to, due to Program misuse, failure to pay, bankruptcy, or death). Cash back will expire at 11:00 p.m. Central Time on the last day of the calendar quarter that is five (5) years from the date on which they are earned. Account must be open and in good standing to earn and redeem rewards and benefits. Upon approval, please refer to your Cardmember Agreement for additional information. Cash back is earned on eligible net purchases. Net purchases are purchases minus credits and returns. Not all transactions are eligible to earn cash back, such as Advances, Balance Transfers, and Convenience Checks and other advance transactions as defined in the Cardmember Agreement, as well as interest charges and fees do not qualify. U.S. Bank cannot control how merchants classify their business or transactions and reserves the right to determine which Purchases will qualify in which category. Earn 2% per dollar for qualifying net purchases made with the card through any participating AAA Club when AAA is the merchant of record, on qualifying net insurance purchases (MCC = 6300) and at eligible retail travel merchants. AAA Clubs located in Northern California, Nevada and Utah are not participating AAA Clubs and purchases made at those clubs will not qualify for 2%. Earn 4% per dollar for qualifying net purchases on AAA purchases, travel and insurance for your first 6 months up to $6,000. After that, earn cash back in the standard 2% category. Foreign Transaction Fee: None.
2 Benefits are subject to terms, conditions, and limitations on the amount of coverage. Travel and Emergency Assistance Services help in coordinating medical, legal and travel services while away from home. Rental Collision Damage Waiver coverage and peace of mind for damage due to collision or theft of most rental cars. Certain terms and conditions apply. Please refer to your Visa Guide to Benefits for details
The Contactless Symbol and Contactless Indicator are trademarks owned by and used with the permission of EMVCo, LLC.
This card is issued by U.S. Bank NA dba ACG Card Services, pursuant to a license from Visa USA Inc. Equal Credit Opportunity Lender
*Annual Percentage Yield (APY) is valid as of 11/26/2024. Personal accounts only. Rates are variable and may change without prior notice. $100 minimum balance to open and avoid fees. Fees may reduce earnings. $250,000 maximum opening deposit when account is opened online. After online opening deposit is verified, you may deposit additional funds to your account. $500,000 maximum balance. Auto Club Trust, FSB.
**Annual Percentage Yield (APY) is accurate as of 11/26/2024. Rates are variable and may change without prior notice. Interest rates are fixed until initial maturity after the account is opened. A $1,500 minimum deposit to open the account and obtain the APY is required. A penalty may be imposed for early withdrawal. Fees may reduce earnings. Personal accounts only.
†Annual Percentage Rate (APR). Rates and terms effective as of 10/11/2024. APR is accurate as of 10/11/2024. Advertised rates and terms are subject to change without prior notice. Additional terms and restrictions may apply. Other loan rates available. Subject to borrower qualification. Advertised rate includes a 0.25% discount when you set up automatic payments from any checking or savings account. Rate is variable. Offer valid on personal vehicle loans only. Criteria to receive the stated APR: Loan term 48 months or less new or used, model year 2018 – 2024 with a credit score of 720 or higher based on the Vantage scoring model. Buyer is responsible for all state or local fees. Auto Club Trust, FSB uses a managed credit program and final APR is dependent on your credit score. An auto loan with an APR of 5.49% for a $20,000 loan at a term of 48 months, your estimated monthly payment would be $465. An auto loan with an APR of 5.74% for a $20,000 loan at a term of 48 months, your estimated payment would be $467. Private party sales will not be financed.
††Terms and Conditions apply. Offer valid for loans on vehicles purchased through the AAA Auto Buying Program from a TrueCar, Inc. (TrueCar) Certified Dealer; and approved and funded by Auto Club Trust, FSB. Applicant must submit the Member Price Summary provided by TrueCar during the application process. Must be an active AAA member to receive the additional TrueCar discounted rate. Loans offered by Auto Club Trust, FSB. Equal Opportunity Lender.
Member Savings currently not available in all states. In these states a "Target Price" is presented, which reflects a market-based example of what you can reasonably expect to pay for a vehicle configured with your desired options. Your configured vehicle may not be available or in-stock at the Certified Dealer.
TrueCar operates this information website ("Service") featuring pricing, performance, technical, and safety data available for new and used vehicles. The Service is not available in all locations.
Products are offered by Auto Club Trust, FSB. Equal Credit Opportunity Lender.
Mortgages originated by Auto Club Trust, FSB. Equal Housing Lender. NMLS# 799629
Member FDIC