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How to Compare Credit Cards

I like to approach the task of comparing credit cards from two angles. There are characteristics that I consider to be core to the card, the “meat and potatoes,” if you will. Then there are characteristics that are more ancillary or fleeting, the “icing.” (Please ignore the gross meatball sundae [3] idea that results when you put icing on meat and potatoes) Finally, there are those characteristics that are irrelevant to you.

When you go to compare cards, it’s important that you also make those same distinctions.

Interest Rate APY

I almost never look at this characteristics because I don’t carry a balance but it should be the first number you look at if you do carry a balance. You need to review the terms & conditions of the card and read what the various interest rates are. For me, this falls into the “don’t care” pile but if you carry a balance, this should be the most important aspect about a card. That’s why you need to make your own distinctions about characteristics.


No one likes to think about fees but we all know they matter. I avoid annual fees whenever possible and I’ve never had a personal credit card with a fee. Unfortunately for many travel cards, this is unavoidable as those programs almost always institute a fee. You should be able to get the fee waived in the first year, that’s almost a standard offer, but they get you in that second year.

I’d also check late payment and other fees on the card, for those (hopefully) rare times you do miss a payment. If you travel a lot, consider getting a card with low or no foreign transaction fee [4].

Cashback Program

If you’re getting a reward card, carefully review the cashback program. I’m less a fan of the ones where there are rotating categories but sometimes that’s on top of a core set of categories. Either way, compare the reward program with your normal spending and see if you’ll come out ahead. If the program rewards you in points, check the catalog to see if it contains items you’ll actually want. Cash is always king but points are OK if you can convert them favorably.

Promotional Offers

Promotional offers should almost always be considered icing. If all other things are equal, the one with some new account holder promotion should win out. There are a lot of “$200 in cashback after you spend $1000” promotions (or some variant of that) out there but after the promotion is paid out, only the card is left. I would also put 0% balance transfers [5] and 0% on purchases [6] into this promotional offer camp, though their promotion lasts a little longer than the “cashback after you spend XYZ” lot.

Those are just a handful of the things I look at when comparing credit cards, something I don’t do very often. I haven’t had a new credit card since opening an American Express TrueEarnings Costco card [7] about five years ago. Once you find a couple you like, there’s really very little incentive to switch.

(Photo: sovietmole [8])