Choosing the right credit card can be tricky. How do you sift through the myriad offers regularly taking up space in your mailbox to find the card that truly pays off?
ShopSmart magazine has come up with some tips to keep in mind when looking for your next credit card and recommendations for the top rewards cards because, let's face it, we all want some extra payoff for our purchases.
Credit Card Tips
- Watch for sneaky fees: Many rewards cards have annual fees, which are likely to be more than offset by your rewards. But be alert for fees on balance transfers, cash advances and foreign transaction.
- Go for cash rewards: With straight-forward cash-back, avoid the temptation to spend points on unnecessary items at the car issuers’ online malls.
- Get paid for loyalty: Check your favorite retailer for a card that rewards frequent shopping.
- Look out for the fine-print gotchas: Buried deep in the terms and conditions of some credit-card agreements are clauses that could make you lose out on rewards, like cutting off rewards at a certain cap in monthly spending or requiring you to opt in every quarter for your rewards.
Top Rewards Cards
American Express Costco TrueEarnings
- APR: 0% for 6 months, then 15.24%
- What you get: 3% cash back at gas stations and restaurants (drops to 1% at gas stations after $3,000 is spent), 2% on travel, 1% elsewhere. No annual fee with Costco membership.
Capital One No Hassle Cash Rewards
- APR: 0% until March 2011, then 14.9%
- What you get: 2% cash back on gas and at major grocery stores, 1% on everything else. Rewards never expire and can be redeemed anytime. No balance-transfer fee.
Fidelity Rewards American Express
- APR: 13.99%
- What you get: 2 points for each 1% spent. You do not need a brokerage account to have the card. You need a brokerage account only to redeem points for cash deposits to your account.
PenFed Premium Travel Rewards American Express
- APR: 13.24%
- What you get: 5 points per $1 spent on airfare, 3 per $1 on dining and hotels until Dec. 31, 2010, 1 per $1 elsewhere; 20,000-point sign-up offer when $650 is spent in first three months. No foreign-transaction fee. Good balance-transfer offer. Military families join free; others pay a onetime $20 fee.