As you know from reading our DINKs Blog that I am not a big fan of credit cards due to bad past experiences. However, having a good credit rating is very important for life events such as buying a home, renting and apartment, leasing a car, and getting a new job. Although there are alternatives to credit cards such as lines of credit and personal loans, credit cards are definitely the most convenient option.
Many things such as annual fees, a point bonus at signing, cash back on purchases, and travel or reward points are all important factors when choosing a credit card. As we have discussed before on this website, credit card reward points are very important to consumers.
After research here are some Credit cards that I recommend:
BankAmericard Cash Rewards Visa Signature Card offered by Bank of America: I chose this card because there is no annual fee. The interest rate is variable depending on your credit score. Therefore, you could have a low interest rate without paying an added fee for it. This is a cash back card.
I prefer cash back over points because you can use cash on anything, unlike rewards points. However, it is usually applied directly to your statement balance. The standard cash back rate (not a limited time offer) is 3% on grocery, gas, and drugstore purchases for 6 months and 1% after that and on everything else. You also earn cash back bonuses for enrolling in other Bank of America services. In a nutshell, this card offers a possible lower annual interest rate and 1% cash back on all purchases for no annual fee.
TD Easy Rewards Visa Credit Card offered by TD Bank: This rewards card is very beneficial because of its flexibility and no annual fee. There are no blackout periods, unlimited point accumulation, and no expiry date on rewards points. I would recommend this basic card as a first credit card for young adults, or for someone who rarely uses their credit card.
Although it is not as advantageous as the Bank of America card mentioned above, the reward point redemption limits are comparable with other products on the market. After the 6 month introductory offer you will earn 1 point for every $1 spent. Similar to the Bank of America card, your interest rate also depends on your credit score. However it will only be one of three options (11.24%, 16.24%, or 21.24%) as opposed to a wide range as offered by Bank of America. Points can be redeemed for airfare, travel accommodations, gift cards, or merchandise from a variety of retailers.
Chase Freedom 5% Cash Back Card offered by Chase Bank: This card has a lot of variables; including the interest rate which could be different for the annual rate, balance transfers, and cash advances. The transaction fees are also very high for balance transfers and cash advances compared to other companies. However, the rewards are substantially higher than other cash back cards.
The 5% cash back on popular purchases includes a wider range of services than just the standard grocery, gas, and pharmacy. This card offers 5% cash back on gas purchases, home improvements, and purchase at major department stores, grocery stores, hotels, and airline tickets. If you do choose this card, please make sure to read the fine print, and use your card wisely
———–
(Photo by me and the sysop)
I agree with Benjamin. Cash is better than credit for everyday purchases. However, credit can be good for some things such as booking vacations, travelling, and extended warranties on electronics etc.
I feel that if you are disciplined enough to use them wisely, reward cards can be a great asset. Why not just put every dollar that you spend on the card and pay it off at the end of the month? As long as you fight the temptation to purchase more on a credit card than a debit card, it’s a great way to earn free money!
Credit cards offer more consumer protections over debit cards, plus why do I want to give a stranger direct access to my cash i.e. checking/savings account?
The cards you mentioned above are really not that great from a rewards perspective.
Schwab offers a 2% cashback on every transaction card and fidelity offers a similar product.
Pentagon federal credit union also has a visa that gives 5% gas, 2% groceries and 1% cashback on everything else.
Amex offers A costco cashback card which also provides u with free membership to costco. 3% for gas
3% for restaurants
2% for travel
1% everywhere else, including costco purchases