Personal Finance 

Help a Reader: Need a New Rewards Credit Card

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Like many other personal finance bloggers, I get a lot of emails asking for my advice on things from 401(k)s to credit cards. I’m not comfortable giving advice but I usually respond by saying “If it were me, I would…” Giving advice, especially on difficult and complex issues, is very risky because if things don’t work out then I might get in trouble. Many pundits and advisors have errors & omissions (E&O) insurance, also known as professional liability insurance, for this very reason.

That said, I still want to help so I’m going to start a series, called Help a Reader, in which I include a reader question from the week before, provide a “If it were me, I would…” type of answer and hope you guys can chime in with your suggestions. They say crowdsourcing is the new thing these days and I can’t think of a smarter crowd than this one.

This first one is pretty straightforward (I wanted the first one to be a bit of a softball) – Reader P.K. emailed me the other day asking for suggestions on a new credit card. He’s 31, has “great” credit, and just wants to know what the best options out there was. Here’s an excerpt from his email:

I am still using the Capitol One Sony Card that I have had for over 10 Years. I get Sony Points which I can redeem at the Sony Card website but I am not longer interested in this card. I am looking for a credit card that will give me the highest percent in cash back. I am married with one kid and so I will be using my card for everything from groceries, gas and travel.

The Sony Card offers 3x points on dining out and movies, 1x points on everything else with no annual fee. That’s not a bad reward breakdown if you’re OK with Sony points, which I wouldn’t be.

If you shop on Amazon, which we do, you can convert it at 6,000 points to $50 which makes each point worth 0.83 cents each so your effective “cash back” is 4.16% on spending at restaurants, books, movies and music. That is better than the Sony card, which gives you 3x (assuming an even points to cash value, which I doubt), so you get a better cash back rate.

Anyone else have any other suggestions for a good card alternative for P.K.?

And if you have a question that you want the Bargaineering community to answer, please send it along and I’ll be happy to post it!

{ 12 comments, please add your thoughts now! }

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12 Responses to “Help a Reader: Need a New Rewards Credit Card”

  1. Clark says:

    “Giving advice, especially on difficult and complex issues, is very risky because if things work out then I might get in trouble.” Pardon me? Did you mean to say “…if things DON’T work out”?

  2. Michelle says:

    I have the Chase Freedom and I love it. I heard the Chase Sapphire is good also.

  3. Paul says:

    I use American Express Blue Cash for everything I buy,(from those vendors who accept this card). I pay a $75 annual fee so that I start earning 6% cash back on all groceries from day one / 1% cash back on everything else.

    I use Chase Freedom at all merchants that do not accept Am Ex and get 1% cash reward, (some purchases also reward 5% on a rotating quarterly basis – like gas from Jan-Mar). I do use Citi Freedom for all restaurants.

    I always take cash or statement credit. I earn over $1,000 / year, tax free.

  4. glixon66 says:

    From my experience and perpsective, it really depends on what you want to do with the rewards that determines the card or cards you will use.

    We use an Amex Card for Costco purchases (food and gas) and put the yearly cash back check into an account for big purchases that we want, but can wait for them until we have the funds to buy them (such as a flat screen TV, etc).

    We use a Southwest Visa Card for everything else, so that we can build points towards vacation travel; in fact, we got this card when it offered the two free flights (50,000 points) and were able to use all 50,000 points for 3 Roundtrip tickets to San Diego to take my son to LegoLand, SeaWorld and the SD Zoo. We live near a Southwest hub and a lot of places in the US that we want to visit are near airports where SW flies, so it’s a great way for us to get airline tickets.

    So, my advice would be to figure out what your goals are regarding the rewards and then find the card or cards that meet those goals.

  5. A Reader says:

    The nice thing about the Citi Forward Card is that you can get 1:1 redemption for certain items.

    If the reader has a mortgage or student loan, you can redeem those 1:1 (i.e. 2500 points = $25) at the Thank You network.

  6. Noel says:

    Before taking anyone’s advice, analyse your spending. Use Mint if that what it needs and then figure out which reward card fits your bill.

    In my case, I NEVER dine out, I NEVER go for movies. I rarely fly. I hardly shop at stores like Kohl’s so if a reward card offers points on such items, its useless for me. So I went for Chase Freedom. 6 months of the year, it offers 5% cashback on gas. So using Chase Freedom is my primary card.

    I have Costco AMEX card for shopping at costco (local costco does not sell gas). This card is rather new but will be used for big item purchase, air travel and similar issues where warranty or better customer service is needed.

    If you shop a lot at Amazon, you might want to consider Amazon visa. If you travel overseas, you may want to consider Capital One (don’t how you your current capital one stands here) or Discover It. I inherently have distrust with Citibank so I ALWAYS stay away from their products (that being said, Chase is no saint either, I just don’t have any bad experience with them, yet.)

  7. jestjack says:

    Two suggestions…first Chase Freedom gives the usual 1% plus 3% for gas and of course every quarter has “bonus” rewards where the categories chosen provide 5%. And when redeeming offers pretty good selection of gift cards.
    Second suggestion…may not be for everyone….American Express Blue card…6% on groceries…3% on gas…1% on everything else BUT has a fee of $75 a year and they just put a cap on the “grocery rewards”. But 6% is pretty generous. Really depends on shopping habits when looking for a new card…

  8. Bryan says:

    Depending on how much you spend on groceries, and gas, the AMEX bluecash preferred seems like a good fit. The issue with that card, is that you have to spend enough in a year to push through the $75 annual fee, AND beat other cards.

    I personally use the Chase Freedom, and a AMEX Blue cash Everyday card, as I don’t spend enough to get past the $75 annual fee of the AMEX Bluecash preferred.

  9. Scott says:

    Capital One No Hassle Rewards card – 2% on groceries and gas, 1% on everything else, and rewards are (as advertised) no hassle at all – it’s an automatic $25 credit each time you reach that level. Plus, if you plan to do any traveling overseas, Capital One is really the only credit card you should use (no fees).

  10. If you just want to use one card, use the Fidelity Amex, which gives you 2% cash back on everything.

  11. Nicole says:

    I joined Pentagon Federal credit union and have a PenFed Platinum Rewards Visa. 5 points per dollar on gas, 3 per dollar on groceries, and 1 point on everything else. No annual fee. And the selection of gift cards I can redeem points for includes several grocery stores (Albertsons, Publix, Whole Foods, Farm Fresh), unlike my Capital One Rewards Visa.

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