Note: This is not expert advice, as always with your money research it yourself, talk to those whom you trust, and get real advice before investing. Risk is always a factor.
So if you’ve read my post on why getting a credit card is a good idea, and how to use it so that the credit card companies pay you money instead of the other way around then you may be wondering which card to get to maximize your benefits. There are a few factors:
- Annual Fee – Some cards have them, some cards don’t
- Transaction Fees – Most good cards don’t have any strange fees for regular transactions, but it’s a good idea to check.
- Rewards – What type of reward is provided?
- Limit – Is it enough to match your monthly spending?
- Interest Rate – If you follow the autopay guidelines, this shouldn’t be important. DON’T CARRY DEBT ON YOUR CREDIT CARD, the interest rate is normally much worse then a personal line of credit (that you can get from the bank) or a specific loan for whatever purpose you are using the money for.
- Grace period – It’s normal that cards have this, and critical that they do, 20-30 days is ideal
With a little research, you can find multiple good cards. And when you’ve got a few good canidates, you can then decide which sort of reward to use. There are two major types of rewards, cashback, and frequent flyer miles; depending on your situation picking the right rewards card can make a big difference. In order to decide between these two types of cards you must figure out what the relative reward percentage of each card is based off their annual fee, reward values, and how much you spend. To make this easy, I’ve made a spreadsheet, which you can download here. Just fill in the information required into the yellow boxes, and the better card will be calculated. In my example, despite having an annual fee the Mileage card is a better choice, netting $160 more every year.