This is a guest post by Logan Abbott. Logan is the editor of MyRatePlan.com, a leading comparison site for credit cards, mobile phones, phone service, insurance, and more.
The New Year is upon us, and that means you probably made some New Year’s resolutions. If you’re like me, at least one of the resolutions you make each year involves improving an aspect of your own personal finance.
I had dinner with a good friend of mine just before the New Year and he told me that one of his New Year’s resolutions was to apply for a credit card. His first credit card ever.
Now, this friend of mine is very financially disciplined, and for years had been content using cash to pay his expenses. There’s no denying the benefits of credit cards, however, so my friend wanted my recommendations for which credit cards he should consider applying.
Due to the flurry of new credit cards launched recently, I figured I should expand my answer into a blog post for the financially savvy readers of Len Penzo dot Com.
Here are my picks for the best credit cards of 2013, broken down by credit card type:
Best Cash Back Credit Card
Blue Cash Preferred Card from American Express. The American Express Blue Cash Preferred Card is my pick for the best cash back credit card of 2013. With the Blue Cash Preferred Card, cardholders receive 6% cash back on all supermarket purchases, 3% cash back on gas, 3% cash back on purchases made at major department stores, and 1% cash back on all other purchases. In addition, cardholders earn 150 Reward Dollars after they spend $1,000 on the Blue Cash Preferred Card in the first three months that they have the card.
Best Balance Transfer Credit Card
Discover it Card. The Discover it Card was just launched by Discover in early January of 2013, and it is far and away my choice for the best balance transfer credit card currently available. With the Discover it Card, cardholders receive a 0% Intro APR on balance transfers for 18 months. You read that correctly: a year and a half of 0% interest on your transferred balance. But that’s just where it starts. The Discover it Card also offers cardholders 5% cash back on rotating categories throughout the year, including restaurants and movies until the end of March 2013. In addition, the Discover it Card offers cardholders 1% cash back on all other purchases. Lastly, the Discover it Card grants cardholders a 0% Intro APR on purchases for 6 months, and requires no annual fee.
Best Student Credit Card
Citi Forward Card for College Students. The Citi Forward Card for College Students is my choice for the best card on the market geared towards college students. With the Citi Forward for College Students card, cardholders receive a 0% Intro APR on purchases for the first seven months that they have the card. In addition, the Citi Forward Card for College Students offers cardholders five ThankYou Points for each dollar spent on restaurants or entertainment, and one ThankYou point for each dollar spent on any other purchases. The APR of the Citi Forward Card for College Students is also reduced gradually if the cardholder uses his or her credit wisely. Citi also rewards cardholders with a 100 ThankYou Point bonus each billing statement that is paid on time.
Best Bad Credit Credit Card
Capital One Secured MasterCard. I believe that the Capital One Secured MasterCard is the best credit card for bad credit currently available. With the Capital One Secured MasterCard, your credit usage is reported to the three major credit bureaus, so using your card wisely will help you repair your credit. In addition, you can qualify for additional increases in your credit limit down the line without having to put any more of a secured deposit down. Finally, the Capital One Secured MasterCard also enrolls cardholders in the online credit monitoring service CreditInform for free. With CreditInform, cardholders can monitor their credit and watch it increase over time with responsible credit usage.
Best Business Credit Card
SimplyCash Business Card from American Express OPEN. The SimplyCash Business Card from AMEX is an excellent business credit card choice. The card offers 5% cash back at office supply stores and cell phone providers, 3% cash back on gas, and 1% cash back on all other purchases. The SimplyCash Business Card from American Express OPEN also does not require an annual fee to have the card.
Best Travel Credit Card
Capital One Venture Rewards Credit Card. The Capital One Venture Rewards Card is, in my opinion, the best travel credit card currently available. With the Capital One Venture Rewards Card, cardholders receive 2 miles for every dollar spent on any purchase. Cardholders receive a bonus of 10,000 miles if they spend over $1,000 using the card within the first three months that they have the card. Miles can be redeemed for any travel expenses including transportation, flights, hotels, and more. The annual fee is $59 for this card, but it is waived in the first year.
Photo Credit: Shawn Rossi
We cut up our credit cards years ago and live on cash and Visa branded credit/debit cards. What is the best credit card? That would be no credit card. We learned our lesson and will never go back to credit cards.
Actually, Doug, if you know how to budget well, then credit cards can only help. The rewards and cash back you can earn from credit cards cannot be had by using simply cash and debit cards.
I would definitely have to endorse Discover these days. I don’t know how it happened, but I’ve been getting ridiculous rewards points on very small purchases. For example, I spent a few hundred dollars last month on their credit card, and got $65 in CashBack. I don’t know if that’s a screw up or what, but wow, can’t complain on such a small balance.