Which credit card offers the best rewards? Via Shutterstock.
Currently, I have one credit card with a $500 limit. While the credit card is in my name, it’s paid by my father and is only really used for emergencies or family expenses. I’ve been thinking about moving out of my parent’s house and once I do, I’ll have to start paying this card on my own or get a personal credit card. Since I’m not the most organized person, I’m worried that once I’m responsible for the card I’ll miss payments or be late. That’s why right now I only use my debit card for personal transactions. On top of this, I’m also not sure if the credit card I have is the best choice. Here is a comparison of credit cards that I’m thinking of opening.
My top 5 credit card choices
1. Discover Card – This is the card that I’m currently using. I’ve had this card since I was a sophomore in college, when my dad started helping me pay for expenses. Discover does offer a nice rewards program. You can receive 5% cash back on purchases and can use the cashback to pay off a bill, buy items on Amazon and other retailers, donate to charity, or have it deposited to your bank account. You can also receive 5%-20% back on online purchases when going through ShopDiscover, which is similar to Ebates. The cashback doesn’t usually amount to that much for me though (but I’ve never signed up for their cashback promotions or ShopDiscover and probably should.) For example, last month I received only $3.39 in cash back. Still better than nothing! Since I haven’t redeemed it in a few years, I’ve accumulated $98.48. Not too bad!
2.Chase Sapphire Preferred Card – I love to travel and spend the majority of my savings to do so. For this reason, I think that a travel card may be a good option for me. From looking at a bunch of different cards, the Chase Sapphire Preferred Card seems like a good fit, especially since I want to plan a big trip within the next few months. The card gives 2x the points on travel and dining at restaurants (times where I most often use my debit card) and 1 point on all other purchases. You can also can also earn 40,000 bonus points after spending $3,000 in the first three months on the Chase Sapphire Preferred® card. Normally, I would not spend $3,000 dollars within 3 months BUT if I’m planning a trip that’s over $2,000 it’d be easy to do and would be a great idea to book on the card. Even better, the points are very flexible and can be used on different airlines and hotels. The only negative in my opinion is that there’s a $95 annual membership after the first year.
3. Citi Hilton HHonors Reserve – When you open the City Hilton HHonors Reserve card and spend $2,500 in the first four months you get two weekend night certificates that can be used at most hotel and resorts within the Hilton Worldwide portfolio. If you use this at a nice resort this can mean BIG savings (up to $325 a night!) so it’s definitely intriguing. You also get 10 points for every $1 spend on hotel stay within the Hilton portfolio, 5 points on airline and car rental purchases and 3 for all other purchases. When using this card, points add up fast, but they’re not worth as much as other cards, about, half a cent. Also, the card has no foreign transaction fees, which is an awesome perk for those who love to travel outside of the country like me! But bummer, there is also a $95 fee for this card too.
4. Southwest Airlines Rapid Rewards Premier Card – This is the card my dad swears by AND I have to say it’s helped me out a bit in the past. He’s used his points to get me huge discounts on flights BUT he also spends a lot more money than I would on this card. On the Southwest Airlines card you get 50,000 points for two roundtrip flights after you spend $2,000 in the first three months. Again, this would normally not be how much I would spend, but is definitely doable when planning a trip. You get 6,000 points on your card anniversary, 2 points for every $1 spent on Southwest or AirTran flights, 2 points on Rapid Rewards Hotel and Car Rental Partner Purchases, and 1 point on all other purchases. The points on this card are also flexible and can be spent on gift cards, hotel stays, and flights. It also has no foreign transaction fees…score! My dad has had a great experience with this card, so I’m partial to it but, there’s a $99 annual fee.
5. Capital One QuickSilver – The Capital One QuickSilver is a great no fee card. While it doesn’t offer a signup bonus you can get 1.5% cashback on all purchases. You do get a $100 bonus when you spend $300 in the first month. Definitely doable even on an average month. You also don’t have to sign up for any promotion to get cash back. While I think this card seems great, I’m hesitant to close my Discover card and switch to this one for fear of hurting my credit score.
As of last month, my credit score is 705. I’m hoping to improve my score by getting a new card and keeping my Discover card. I like the cash back option and don’t want to hurt my credit by closing it. I think that by pairing my Discover Card with one of the travel reward cards I can get the best of both worlds while improving my credit score. While I’ve made a few overspending mistakes in the past, I don’t usually spend beyond my means, so I know I’ll keep the credit balance down and continue to pay the whole balance every month. I’m not sure which card to choose, although I’m leaning towards either Chase Sapphire Preferred or Southwest. What do you think?
Welcome to Bargain Babe! I’m Mara, and I’m so glad you’re here. I am an obsessive bargain hunter and penny pincher, and I am determined to live a full life without EVER paying full price.
My 1st thought is not to choose a card with an annual fee, especially if you aren’t sure you’ll spend the required amounts to get a good return on them.
We use Discover the most but we get cash back on groceries, gas & medication. For years we bought all of my husband’s diabetic supplies with it plus gas & groceries & received very good returns. We now have a health savings account so we don’t use it for medical needs anymore but we still get enough to buy most of our Christmas every year.
One thought on raising your credit score – when my son was 19 he took out a $1000 loan from a local bank, put it in his savings account & faithfully paid it back on time for the next year. I’d never heard of this but his girlfriend at the time worked at the bank & recommended it as a good way to improve his score. He improved it so much that now at the age of 21 he was able to get a loan to buy his first house.
Wow! That’s impressive that your son has bought his own house at only 21 years old. I never thought of taking out a small loan they way he did but it sounds like a great idea. I’ll definitely have to look into it. Thanks for the advice Jen! 🙂
I use the Capital One Quicksilver card almost exclusively. But you must be paying off your entire balance every month because it comes with a high APR. It also has 5% back on certain purchases that change every three months. But with a standard 1.5% on all purchases and no annual fee, it is hard to beat. But, once again the APR is high.
I agree with you Paul! I have had so many friends who have gotten into huge amount of debts because they only pay the minimum balance on their credit card. With interest, it ends up spiraling out of control. I think that it is very important to always live within your means and this includes how you use your credit. The QuickSilver sounds like a great option if you can make sure to pay it off in full every month. Thanks for the information!
I totally agree with Paul: You must pay in full monthly. If you can’t do that, you should not use a credit card unless you have money to throw away. That expressed, my preference is a rewards card worth 5% on different categories that change quarterly. One quarter it may be supermarkets, movies, and restaurants. Another: gas and home furnishing stores. When the reward accumulates to a specified amount, I like to apply it to the next month’s statement. If you prefer to have the money in hand, you can get a check mailed to you or use it with online stores. The only other card we use is our Costco Amex, which always offers 4% off gas at any station (Costco’s gas prices are always lower than others) and earns 1% on all purchases at Costco, which are then mailed to us annually.
@Diane and @Paul ABSOLUTELY! You must pay off your credit card bill in full. If you do not have the willpower to do so, shred all your credit cards and switch to a debit card.