Sunday, April 7, 2013

My favorite personal credit cards


I get asked this question all the time: “What is the best credit card for ME?”

Well, there isn’t an easy answer for this because there isn't a best credit card for everyone.  There are pros and cons with every credit card.  Personally, I benefit from a mixture of different credit cards used for different purchasing situations.

Some credit cards offer cash back.  Other credit cards offer airline or hotel points.  Some credit cards offer 0% intro APR for 12 or more months.  Some credit cards have low rates, but don’t offer any rewards.  Most of the really premium credit cards have annual fees (they also have some of the best sign up bonuses).  

Chase Ultimate Rewards Personal Cards
The Chase Ultimate Rewards family of credit cards are my favorite type of credit card to use.  You can’t go wrong with any of the following personal credit cards that earn Ultimate Rewards points.  If you have multiple Chase Ultimate Rewards cards, you can easily transfer points between each of your cards instantly and for free.  You can also easily transfer Ultimate Reward points instantly and for free between you and your spouse.  Points can be converted directly into cash at a rate of 1 point = 1 cent.  Points can also be converted to discount gift cards and more.
Chase Sapphire Preferred
- Earn 2x points on Travel and Dining- Earn 1 point on all other purchases
- Earn 7% annual points dividend
- No foreign transaction fees
- 20% off travel when booking through Chase Ultimate Rewards
- 24/7 live customer service
- Transfer travel partners: United, Southwest, British Airways, Korean Air, Virgin, Amtrak
- Transfer hotel partners: Hyatt, Priority Club, Marriott, Ritz Carlton
- Snazzy thick metal card

This is a premium Ultimate Rewards credit card that has a $95 annual fee, waived for the first year.  I previously did a review of the Chase Sapphire Preferred credit card here

Chase Sapphire
- Earn 2x points on Dining
- Earn 1 point on all other purchases
- 24/7 live customer service

I don’t recommend applying for this card directly.  If you are interested in the Sapphire card, I recommend applying for the Chase Sapphire Preferred first.  That way you can enjoy all the benefits of a premium Ultimate Rewards card (including nice sign up bonus)
 free for the first year.  If you decide not to pay the $95 annual fee, you can always downgrade the Chase Sapphire Preferred to the standard Chase Sapphire card like I did.  

Chase Freedom- Earn 5x points in rotating categories every 3 months
- Earn 1 point on all other purchases

As I’ve shared before, I enjoy the 5x points rotating categories so much that I signed up for 
2 Freedom cards: one Visa and one Mastercard.  This is because the 5x categories are capped at $1,500 spend (7,500 bonus points per quarter per Freedom card).  Purchases in rotating categories after capped rewards earn 1 point per dollar spent. 

American Express Personal Cards
There are 2 types of AMEX cards that I really like: the SPG card and the Blue Cash card(s).
The Starwood Preferred Guest® Credit card from American Express
·  Earn up to 25K bonus Starpoints®:10K after your first purchase and 15K after you spend $5K in purchases on the card within the first 6 mo. 
·  That's enough for a weekend getaway to a Category 4 Hotel.
·  Free Hotel Nights: redeem Starpoints at over 1,100 hotels in nearly 100 countries worldwide - with no blackout dates. Some hotels may have mandatory service and resort charges.
·  Free Flights: redeem Starpoints on over 350 airlines with SPG Flights - with no blackout dates
·  No limits on the number of Starpoints you can earn
·  $0 introductory annual fee for the first year, then $65·  Terms and Restrictions apply.

The AMEX SPG card is a favorite for many travelers due to the flexibility of the SPG Starpoint.  While you cannot transfer Starpoints points directly into cash (like the Chase Ultimate Rewards program), you can transfer Starpoints into free nights or flights without blackout dates. 

Starpoints transfer to over 1,100 hotels & resorts in nearly 100 countries including: St. Regis, The Luxury Collection, W Hotels, Le Meridien, Westin, Sheraton, Aloft, Element, and Four Points by Sheraton.

You can redeem Starpoints for flights on over 350 airlines with SPG Flights without blackout dates.  You can also transfer Starpoints to more than 30 airline frequent flyer programs, usually 1 Starpoint = 1 airline mile.  When you transfer 20,000 Starpoints to a frequent flyer program, you get a bonus free 5,000 airline miles.  See list of airline partners here.

·  Earn 100 Reward Dollars after you use your new Card to make $1,000 in purchases within the first 3 months.·  Earn Cash Back: 3% at US supermarkets, up to $6,000 per year in purchases, 2% at US gas stations & select US dept stores, 1% on other purchases. Terms and limitations apply.·  Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit.·  Simple and Straightforward: With the Blue Cash Everyday Card, you can start earning cash back. No rotating reward categories. No enrollment required. No annual fee. 
·  0% intro APR on purchases and balance transfers for 15 months. After that, your APR will be a variable rate, currently 12.99%-21.99%, based on credit worthiness and other factors.
·  Terms and Restrictions Apply.

The Blue Cash Preferred® Card from American Express
·  Earn 150 Reward Dollars after you use your new Card to make $1,000 in purchases within the first 3 months 
·  Earn Cash Back: 6% US supermarkets up to $6,000 per year in purchases, 3% US gas stations & select US dept stores, 1% other purchases. Terms and limitations apply.·  Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit.·  Simple and Straightforward: With the Blue Cash Preferred Card, you can start earning cash back. No rotating reward categories. No enrollment required.·  0% intro APR on purchases and balance transfers for 15 months. After that, your APR will be a variable rate, currently 12.99%-21.99%, with the flexibility to pay over time. 
·  Terms and Restrictions Apply.

- 2% cash back on all purchases
- Rewards direct deposited into eligible Fidelity account ($50 increments)
- No annual fee
If you’re looking for a no fuss, straight up cash back card that gives you 2% on ALL purchases without any annual fee, the Fidelity AMEX 2% card is the one for you.  This is a Fidelity credit card that uses the American Express network for processing of charges.  

In order to get 2% back on all purchases, you need to direct the cash back deposits into one of the following eligible Fidelity accounts:
- Cash Management Account (checking)
- Brokerage account
- Fidelity managed 529 account
- Retirement account

There is no limit on rewards, and every time a rewards balance of $50 is accrued ($2,500 worth in spending), the money is automatically directly deposited into your eligible Fidelity account.  For basic users, this is probably the easiest card to manage.  Only downsides of this card is that American Express is not accepted everywhere and that the points aren’t flexible for flight or hotel redemptions.  See more information about this card here.

So, what's the best credit card for you?

The best credit card for you is the one that offers you the most benefits.  I hear about people blindly applying for credit cards just to score thousands of airline miles and hotel points.  Then they find out that the airline miles they earned don’t fly out of their nearest airport, or they can’t find a place to visit that takes their hotel loyalty points. 

Applying for too many credit cards at once can ruin your credit, especially if your credit report has a thin file (short history of credit).

Applying for too many credit cards may result in you not being able to meet the spending requirements necessary to achieve credit card sign-up bonuses.  

Let’s say you need to spend $3000 on a card to qualify for a sign-up bonus.  If the same spending requirement applies to 3 cards and you apply for all of them, you will need to spend $3,000 x 3 = $9,000 within 3 months to achieve all 3 bonuses.  

Can you achieve this with regular spending?  Will you be tempted to accelerate your spending by buying things you can’t afford just to earn the sign-up bonus you don’t really need?

I can’t tell you what the best credit card for your situation is, but these are my favorite personal credit cards.  I will detail my favorite business cards and airline cards in future posts.

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Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. Reasonable efforts are made to present accurate info, however all info is presented without warranty. Consult a card's issuing bank for terms & conditions.

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