EDIT: Not sure how I over looked this but for travel rewards the new Chase Sapphire Reserve is this sh*t. I applied online and was approved instantly and you could be too with decent credit and if you’re within the 5/24 rule. I’m not going to get into the details on this post but check it. Hands down the best travel rewards credit card out there.
As the economy gets stronger, credit card providers are featuring their most lavish offers to attract new customers. However, deciding which card will give you the best payoff for your personal spending is still another thing. That is the reason why 33% of Americans have not switched their primary card in ten years.
According to Matthew Goldman, a chief product officer for credit card websites at Bankrate, “Many people have under-optimized wallets.” He added, “Right now, it’s a really good time to be a customer, especially one with good credit. The issuers are really going after each other with lucrative deals.”
Therefore, the following information about card choices can help you make a selection.
Cash Back Cards
Cash is not as exciting, say, as a dream trip, but for most consumers, it is the most lucrative choice. NerdWallet made the following analysis. According to its calculations, consumers need to spend $8,600 annually on travel to earn more with a credit card that offers rewards than credit cards that offer cash back. People who travel overseas annually typically fare better with credit cards that waive the foreign transaction fees. A two percent return has become a gold standard for cards that offer cash back. However, most cards with that high of rate also come with several caveats.
For instance, the Fidelity Rewards Visa Signature card requires that a rebate deposit be added to a Fidelity-based account. Citi’s Double Cash credit card gives your one percent as you make purchases and an additional one percent when the purchases are paid off. Cards from Discover, Chase, and American Express feature high cash-back rates that are limited specifically to grocery or gas purchases.
Rewards cards are popular because they focus on everyone’s aspirations – dreams that allow them to see the world or expand their horizons. Airline miles and similar incentives are bought in bulk by credit card issuers for a small portion of their cash value. However, even so, many of the reward points on the cards accumulate and are never used.
Fortunately, you can take these transferable perks and use them on hotel stays and airline travel if you don’t let them pile up and collect dust. Most of the rewards cards feature annual fees, but the listed rates usually do not reflect what a customer pays.
For example, the Sapphire Reserve card by Chase costs $450 annually. However, the card also includes a rebate of $300 on travel purchases, which is instantly applied on the card’s monthly statements. Therefore, customers actually pay $150 for the privilege of using the credit card. Direct competitors, Citi Prestige and American Express Platinum also provide rebates for some of their charges.
If you are not sure how best to use the cards, you can download apps that show how to apply the card incentives. If you like to travel, stick to comparing and contrasting reward cards. However, if you are more of a homebody, then cash back cards offer the best rewards.