Below
is a list of some of the best rewards credit cards out there. None of the cards
listed below have any annual fees. If your credit score is less than 700, I
would recommend doing a Google search for the name of the card you want and credit
score needed, e.g. “Discover It credit score needed.” MyFico forums have some
good insight as to what you can expect before you send in an application and
potentially risk your credit score on a denial. If you do apply for a card and
are denied, you can try calling the issuer and they will sometimes reconsider.
Your income will also be taken into consideration in addition to your credit
score/history. If you don’t know what your credit score is, you should sign up
for www.creditkarma.com, a free
website that tells you your Transunion score and shows you a “report card” that
helps you understand why your score is what it is and how you can improve it.
Card
terms can change all of the time and these are as of January 11, 2014. Be
careful if you decide to wait. Many of these card issuers have other cards with
very similar names that do charge annual fees. Always review the terms
carefully before you send in an application.
You should not apply for all of these cards at once, as submitting multiple credit applications at the same time can negatively impact your credit score. (CreditKarma.com has a simulator that estimates how opening a new account will impact your score.) If you apply for a card that has a 0% introductory interest rate and choose to take advantage of that, I recommend opening a separate interest earning bank account that you put the amounts that you charge each month into the account, so that you are ready to pay the account off in full before any interest starts accruing. If you open an Ally Bank savings account, the current interest rate is 0.90% with no monthly maintenance fees or minimum account balances. You can put this money into this separate account and leave it alone until you need to pay off the card. You should make sure you calendar yourself a warning to pay the account in full at least 30 days before you need to do so to ensure you don't end up paying any interest on a large balance. Additionally, it is also recommended that you don't charge over 30% of your credit limit as doing so may negatively impact your score. If you received a Discover It card with a credit limit of $10,000, you could charge $3,000 to it and then only make minimum payments for 13 months (1 month before the 14 month expiration, just to be safe). You could put the $3,000 that needed to be paid into an Ally savings account, which would earn approximately $29.25 in that 13 months. You would then have earned the credit rewards on the $3,000 you charged ($30 minimum for 1% cashback categories) as well as the $29.25 in interest. You could also continue using the card after you charged $3,000 and keep paying it down to $3,000 in order to take advantage of additional purchase rewards.
You should not apply for all of these cards at once, as submitting multiple credit applications at the same time can negatively impact your credit score. (CreditKarma.com has a simulator that estimates how opening a new account will impact your score.) If you apply for a card that has a 0% introductory interest rate and choose to take advantage of that, I recommend opening a separate interest earning bank account that you put the amounts that you charge each month into the account, so that you are ready to pay the account off in full before any interest starts accruing. If you open an Ally Bank savings account, the current interest rate is 0.90% with no monthly maintenance fees or minimum account balances. You can put this money into this separate account and leave it alone until you need to pay off the card. You should make sure you calendar yourself a warning to pay the account in full at least 30 days before you need to do so to ensure you don't end up paying any interest on a large balance. Additionally, it is also recommended that you don't charge over 30% of your credit limit as doing so may negatively impact your score. If you received a Discover It card with a credit limit of $10,000, you could charge $3,000 to it and then only make minimum payments for 13 months (1 month before the 14 month expiration, just to be safe). You could put the $3,000 that needed to be paid into an Ally savings account, which would earn approximately $29.25 in that 13 months. You would then have earned the credit rewards on the $3,000 you charged ($30 minimum for 1% cashback categories) as well as the $29.25 in interest. You could also continue using the card after you charged $3,000 and keep paying it down to $3,000 in order to take advantage of additional purchase rewards.
Chase Freedom
Card
Sign-up Deal: Receive $100 bonus if you spend
$500 on the card in the first 3 months after account opening.
Card Terms: 0% intro APR for
15 months on purchases and balance transfers. After intro APR expires, 13.99%
to 22.99% based on creditworthiness and varies based on the Prime Rate. Fees
apply for balance transfers.
Rewards: 5% cashback on categories
that change quarterly. 1% cashback on everything else. Current quarterly
category for Jan-Mar 2014 is Gas Stations, Movie Theaters, and Starbucks. Apr-Jun
2014 categories are Restaurants and Lowe’s Home Improvement Stores. Jul-Sep
2014 categories are Gas Stations and Kohl’s. You must activate 5% rewards by
signing up in your online account each quarter (easy to do when you pay your
bill). You can redeem rewards for statements credit or gift cards (no increase
in value for doing so).
Discover It Card
Sign-up Deal: You receive $50 cashback as long as you
make one purchase of any amount within 3 months of signing up for the card.
Card Terms: 0% intro APR for
purchases and balance transfers for 14 months from date of account opening.
After intro APR expires, 10.99% to 22.99% based on credit worthiness and varies
with Prime Rate. Fees apply for balance transfers.
Rewards: 5% cashback on
categories that change quarterly. 1% cashback on everything else. Current
quarterly category for Jan-Mar 2014 is Restaurants and Movies. You must
activate 5% rewards by signing up in your online account each quarter (easy to
do when you pay your bill). Rewards can be redeemed as a credit to your
statement, direct deposit to your bank account ($50 redemption increments for
credits and deposits), or redeemed for partner gift cards (amount needed varies
based on gift card). Many partner gift cards allow you to increase the value of
your rewards, e.g., by redeeming $45 in cashback for a $50 Lowe’s gift card. You
can also redeem rewards in any amount by applying them to a purchase at Amazon.
US Bank Cash+ Visa Signature Card
Sign-up Deal: None. (You want
this card because of the rewards.)
Card Terms: The website does
not give information about new cards and says the information is available in
the branch. You can only apply in the branch (but can do so even if you do not
bank with US Bank). My card has a 14.99% purchase APR. I don’t think there was
a 0% intro offer when I signed up.
Rewards: 5% cashback on TWO
categories you choose on a quarterly basis and 2% cashback on one
category you choose on a quarterly basis. 2% cashback categories include gas
stations, grocery stores, and drug stores. 5% cashback categories include cell
phone (that’s what I do, 5% cashback on my T-mobile bill every month), Sporting
Goods Stores, Bookstores, Department Stores, Restaurants, Electronics Stores,
Hotels, Fast Food, Furniture Stores, Car Rental, Charity, and Movie Theaters.
Rewards can be redeemed for a statement credit. Once per year, if you save up
$100 in rewards to redeem simultaneously, you will get a $100 statement credit
AND a $25 Visa gift card will be mailed to you.
Link: https://cashplus.usbank.com/?redirect=cashplus
Information only here. You have to
apply at your local US Bank branch.
Additional
Notes: I do not
recommend signing up for this one with a score less than 720. I got the
impression when I went into the branch
that they are really particular on who they approve for this one.
American Express Blue Cash Everyday Card
Sign-up Deal: $50 in rewards,
redeemable as a statement credit after you make $1000 in purchases in the first
3 months after signing up for the card.
Card Terms: 0% intro APR for
15 months on purchases and balance transfers. After intro APR expires, 12.99%
to 21.99% based on creditworthiness and varies based on the Prime Rate. Fees
apply for balance transfers.
Rewards: 3% cashback at
supermarkets (on up to $6000 purchases, then 1%), 2% cashback at gas stations,
2% at select department stores, 1% on everything else. You can redeem rewards
as a statement credit, for gift cards (no bonuses in gift cards), or for
certain merchandise items.
You can also
only us an American Express card at Costco, so you’ll get 1% cashback at
Costco, too.
Capital One VentureOne Rewards Credit
Card
Sign-up Deal: Receive 20,000
bonus miles when you spend $2000 on purchases in the first 3 months after
signing up for the card. Miles can be redeemed for flights, hotel rooms, or car
rentals and redemption amounts are based on the cost, e.g. $217 flight for
21,700 miles.
Card Terms: 0% intro APR for
12 months on purchases only (not balance transfers). After intro APR expires, either
11.9%, 15.9%, or 19.9% based on credit worthiness and varies with the Prime
Rate.
Rewards: You receive 1.25
miles for every dollar spent. (It’s basically like 1.25% cashback that can only
be applied to travel when redeemed.) No blackout dates and no expirations.
