The Best Rewards/Points Credit Card.

[FortLaudy 10]

Do you use your credit card like a debit card in an attempt to earn points that can be redeemed for tickets or gift certificates etc.?

Which bank/credit card has the best deals/rewards... anyone?

[Ali G. 37]

Airline wise, I'd pick a card with an airline that you are most likely to use when traveling abroad.

Personally, I tend to prefer cards from Citi or a credit union.

Edited February 20, 2010 by Booyah

[scandal 951]

Do you use your credit card like a debit card in an attempt to earn points that can be redeemed for tickets or gift certificates etc.?

Which bank/credit card has the best deals/rewards... anyone?

I would say pick a card with no annual membership fee, pay your balance off each month in full so you don't run any interest charges, and then find a card with a rewards program that gives you goodies you actually want (ideally cash) rather than stuff you probably wouldn't need.

Until recently I was using a Chase Amazon card that gave me $25 Amazon gift certificates for every $2500 spent. That was good since I read a lot and buy books regularly. There is no annual fee.

However I recently switched to Chase Freedom card. It pays out slightly higher reward points and they can be converted to cash. Cash is still king. No annual fee, of course.

[FortLaudy 10]

I would say pick a card with no annual membership fee, pay your balance off each month in full so you don't run any interest charges, and then find a card with a rewards program that gives you goodies you actually want (ideally cash) rather than stuff you probably wouldn't need.

Until recently I was using a Chase Amazon card that gave me $25 Amazon gift certificates for every $2500 spent. That was good since I read a lot and buy books regularly. There is no annual fee.

However I recently switched to Chase Freedom card. It pays out slightly higher reward points and they can be converted to cash. Cash is still king. No annual fee, of course.

Mind reader, haha!! We have the Chase Amazon too at the moment, and the $25 Amazon gift card and $50 cash check is pretty cool. I wouldn't normally use a credit card for anything other than convenience for online purchases/reservations etc. but hubby mentioned to me about the rewards aspect and that the more we use the card the higher the rewards, after checking it out and getting our first Amazong gift card I'm thinking of using the card as a debit card, paying it off in full every month but would like a card that will give us the best/highest points/rewards.

[웃 910]

http://www.chasesapphire.com/

[Ali G. 37]

Until recently I was using a Chase Amazon card that gave me $25 Amazon gift certificates for every $2500 spent. That was good since I read a lot and buy books regularly. There is no annual fee.

Liberal oriented books of course.

[Kathryn41 3,205]

We use our American Express like that - charge almost everything we can to it each month then pay it off in full each month and get credit points. Two years ago we had enough points to get me a Trek bike that retails for nearly $500 - all on points. We've got small things often as well. The points can be used for a variety of things including travel and accommodation. I'm hoping we will be able to get a new Dysan vacuum with points soon.

Edited February 20, 2010 by Kathryn41

[scandal 951]

Mind reader, haha!! We have the Chase Amazon too at the moment, and the $25 Amazon gift card and $50 cash check is pretty cool. I wouldn't normally use a credit card for anything other than convenience for online purchases/reservations etc. but hubby mentioned to me about the rewards aspect and that the more we use the card the higher the rewards, after checking it out and getting our first Amazong gift card I'm thinking of using the card as a debit card, paying it off in full every month but would like a card that will give us the best/highest points/rewards.

That's a good plan. Note that it's NOT a debit card. A debit card will deduct the funds from your checking account immediately at point of purchase.

A credit card still lets you manage your payment and obtain the benefit of an interest-free loan for (at least) the grace period of the card (typically 3 weeks) and on average longer, due to the monthly billing cycle. I like the idea of a free loan, and reward points. There's one other advantage to a credit rather than debit card - you are building up your credit history and FICO score by regular responsible usage. Those regular monthly payments are getting reported to the credit bureaus (Equifax, TRW, Experian) and will help you when it's time for a mortgage or car loan. Debit card usage doesn't affect your credit score. For that reason, I very rarely use my debit card and prefer to use my credit card.

[FortLaudy 10]

That's a good plan. Note that it's NOT a debit card. A debit card will deduct the funds from your checking account immediately at point of purchase.

A credit card still lets you manage your payment and obtain the benefit of an interest-free loan for (at least) the grace period of the card (typically 3 weeks) and on average longer, due to the monthly billing cycle. I like the idea of a free loan, and reward points. There's one other advantage to a credit rather than debit card - you are building up your credit history and FICO score by regular responsible usage. Those regular monthly payments are getting reported to the credit bureaus (Equifax, TRW, Experian) and will help you when it's time for a mortgage or car loan. Debit card usage doesn't affect your credit score. For that reason, I very rarely use my debit card and prefer to use my credit card.

Very useful info, thanks. Yes will definetely pay it off in full early each month, it will just be to gain the reward points and build good credit. To be on the safe side we'll probably deposit funds on the card (perhaps half of the credit line) before even using it to ensure we never go over the credit limit or have to pay interest

Kathryn: does the Amex card have an annual fee?

[mawilson 2,133]

If you eat out a lot, the best card for food and entertainment is Citi Forward:

You get 5 points for every $1 you spend on books, movies, music and restaurants. No annual fee.

The points are redeemable for all sorts of nice things, including cash (8,000 points for $50),

which translates to 3.125% cash back.

[Trumplestiltskin 5,791]

Every couple of months I get enough points on my credit card to redeem gift vouchers - which was great until the bastards stopped offering the $25 amazon card. Now if I want a GC from amazon I have to wait until I've earned the points for the $50 card.

[Kathryn41 3,205]

Very useful info, thanks. Yes will definetely pay it off in full early each month, it will just be to gain the reward points and build good credit. To be on the safe side we'll probably deposit funds on the card (perhaps half of the credit line) before even using it to ensure we never go over the credit limit or have to pay interest

Kathryn: does the Amex card have an annual fee?

Yes, unfortunately, it does. I don't know off the top of my head what it is, though. Ok, if you google American Express you will find the different classes of cards they offer along with the different fees and terms, including information about the reward points.

Edited February 21, 2010 by Kathryn41

[scandal 951]

I have a no-fee Amex card which earns rewards on Delta. I don't use it very much, but it is free.

http://www.americanexpress.com/delta/

Here's a timely article on the upcoming change to credit card laws taking effect this week. Moral of the story: Stay away from carrying any balance on your card! The interest rates can top 30% and will murder you. ALWAYS pay off the balance in full each month, and then the interest rate on the card really won't affect you.

http://online.wsj.com/article/SB1266704725...onalFinance_PF4

* MARKETWATCH

* FEBRUARY 21, 2010

It's a New Day for Credit Cards

By JENNIFER WATERS

For the first time in three years, credit-card issuers are ramping up their mailbox solicitations. But don't expect to see your father's credit-card appeals. Variable interest rates, higher annual fees and a host of new charges will be hidden in the fine print of these offers.

With new consumer protections in the Credit Card Act (officially called the Credit Card Responsibility and Disclosure Act) set to take effect Monday, the nation's largest credit-card issuers upped their direct-mail solicitations to consumers by more than 45% in the fourth quarter from the prior quarter, according to two leading market-research firms.

[marketwatch wsj] Tom Bloom

But a new credit card these days will cost you. The average annual percentage rates, which climbed steadily most of last year, are now at the highest level in five years. Some 35% of cards now have annual fees and a number are raising or imposing new charges for balance transfers and inactive accounts.

"Issuers are looking for ways to recoup potential lost revenues from the new regulations," says Andrew Davidson, senior vice president at Mintel Comperemedia.

In the fourth quarter, the average annual percentage rate stood at 13.5%, well above the year-ago rate of 11.8%, according to Synovate Mail Monitor. Last week's average APR, according to CreditCards.com, was about 14.2%, up from 12.1% just six months ago. Interest rates for subprime borrowers were significantly steeper at 24.9%, compared with 14.3% six months ago.

It's also worth looking at the spread between the prime rate, currently at 3.25%, and the variable interest rate the issuer applies to the credit card, says Anuj Shahani, director of competitive tracking for Synovate's financial-services group.

The prime rate is three percentage points above the Federal Reserve's target rate for fed funds, which now is 0% to 0.25%. Variable rates are tied to the prime rate, meaning that as rates change, the APR on a variable-rate card changes, too.

The gap between the prime rate and the average APR of 13.51% is 10.26 percentage points, the widest variance in 10 years. In 2007, the spread was less than half that, at 4.8 percentage points.

As the economy recovers, the Fed will eventually raise interest rates, which will then raise the variable rate on those types of credit cards, no matter what your credit history is. For example, if the Fed raises interest rates by a quarter of a percentage point, that average APR from CreditCards.com's 14.1% rate would rise to 14.4%.

"We're expecting APRs to average in the high teens by 2010 and expecting them to touch 20% and higher by 2011," says Mr. Shahani, who is assuming the Fed will raise rates this year. There are others, however, who believe the Fed won't do so till 2011.

If Mr. Shahani is right, people who now have variable rates at 29.9% -- and many do -- will be looking at rates that top 30% when the prime rises. "It does sound crazy and shocking, but if you think of it, some of those subprime folks can be looking at 35% or more this year," he says.

Meanwhile, many customers will see the return of annual fees. In the fourth quarter, 35% of cards charged an annual fee, the highest level in the past decade, according to Synovate, which expects more issuers to tack on annual fees in the coming months. That could come back to haunt some card issuers. A recent Synovate study found that three out of every four credit-card holders will either cancel or consolidate cards that carry an annual fee.

Here are the things you need to watch out for should you be tempted by any of the credit-card offers you receive:

Average annual interest rates: They will be higher than you're used to and could get higher yet. Most, if not all, credit cards will offer an attractive introductory rate for 12 months before it shoots up to something not so pretty. Make sure you know what you're getting into.

Rate increases: The new law prohibits card issuers from escalating rates during the first year. Rates cannot increase without a 45-day notice -- and the opportunity for you to opt out and cancel the card. But it you're more than 60 days late on payments, all bets are off.

Annual fees: Yes, they're back, but not on every card. If you're the type who pays off credit cards every month, then consider this the credit-card issuers' payback for not contributing to top-line sales. Of course, you can choose another card or consolidate on another household charge account.

Application fees: These are new to most people. It's a charge for the opportunity to apply for a card, whether you get the card or not. Annual and application fees cannot exceed 25% of your credit limit. But don't get fooled by them. They can represent another form of interest on your account.

Hybrid cards: Synovate's Mr. Shahani expects to see innovation take over the card space as issuers look for new ways to raise money. Watch out for low-fee cards that could have other high-interest charges or fees.

Late fees: They haven't gone anywhere and could now come in different packages. Many issuers are looking at tiered payments such as $29 for balances below $500 and $35 for those above $500.

Over-limit fees: You have to let the card issuers know you're willing to pay a fee should you go over your limit. If you don't, you'll be turned down at the cash register. Some issuers such as American Express and Discover have done away with over-limit fees.

[Ali G. 37]

Not a fan of Amex at all.

[MrsCat 6]

My Alaska Airlines Visac has a $75 annual fee. But I get a $100 companion fare with it each year and free car rental insurance. We travel home enough to make it worth while. We just flew home from Canada and saved at least $800 on airfare alone.

Plus, I'm using the miles to get me to New Zealand one day.

I think the card for you depends on your needs, what you buy, and what your priorities are.