by Joy Paley
Joy Paley is a guest blogger for Pounding the Pavement and a writer on the subject of becoming a nail technician for the Guide to Career Education.
There are lots of good uses for the seemingly dozens of credit card offers most people get in the mail every week. You can construct a small shrine to spending with them, arranging the envelopes artfully amidst candles and incense. (Thats probably a fire hazard, though.) You can also scrawl grocery lists on the back. Or you can do my personal favorite, taping the offers to a brick, writing return to sender on the envelope, and sticking them in the mailbox.
Rather than signing up for any old card that comes in the mail, take the chance to evaluate how youre going to use the card, which rewards will be best for you, and any hidden fees or gotchas that may be nestled amongst the fine print.
Here are a few great cards for different types of spenders:
American Express Costco TrueEarnings Card
Targeted for: Small business owners.
APR: 0% for 6 months, then 15.24%
Pros: 3% cash back on gas and restaurants, 2% on travel, 1% on everything else. No annual fee if youre a Costco member.
The Fine Print: After you spend $3000, the cash back on gas goes down to 1%
If youre an owner of a small business or work for yourself, youve got your own unique spending patterns. Perhaps youre picking up 48-packs of paper towels at Costco before flying across the country for a conference. (Who isnt, right?) This card could be a great option for you. It rewards spending on flights, restaurants, and gas — and Costco members get it free.
AirTran Airways A+ Visa
Targeted for: People who want a free flight.
APR: 0% for the first 6 months, then 15.24% or 18.24% depending on your credit score; $49 annual fee
Pros: Earn enough credits for a free one way flight, if you spend $750 within 90 days of opening the card.
The Fine Print: You can incur a 30.24% penalty APR if you pay late, go over your credit limit, etc.
In these days of bankrupt airlines, signing up for an airline credit card can be a bit risky. You run the chance of booking your free flight and showing up at the check-in counter — only to find the flight attendants packing up for a little permanent vacay. These cards are still a good way to get a free flight, though, if you play your cards right. The strategy: get the card, spend enough to get the rewards points, take the free flight, cancel your card. Its as easy as that! This AirTran card will let you earn that free flight fast, so you can get your reward and move on.
Capital One No Hassle Cash Rewards
Targeted for: Big spenders.
APR: 0% until June 2012, then 12.9%, 16.9% or 20.9% depending on your credit score
Pros: 2% cash back at groceries and gas stations, 1% elsewhere; no annual fee; you may request your cash back whenever you want.
The Fine Print: There is a 29.4% penalty APR.
The problem with a lot of rewards cards is that you cant expect to actually feel rewarded until youve spent upwards of $5,000 with your card. Since Im just using my card to buy groceries and the intermittent piece of consumer electronics, its not ideal for me to have one of these big spending cards. If youre in this category too, you probably want a card that rewards you for purchases no matter what you spend, and that doesnt nickel and dime you with lots of hidden fees. Like this Capital One card, for instance.
Photo Credit: Andres Ruedas
Our favorite right now is the Bank of America UPromise MasterCard. It’s no fee. We don’t use cards much but every purchase kicks back a little into our kid’s college savings. A little known fact, you don’t have to tie it to an educational IRA, (which in our state has some pretty hefty requirements), but can take the cash out quarterly for college expenses. So our first born got some textbooks gratis. Every bit helps.
You can opt out of credit card pre-screening, which will eliminate those credit card offers that most of us loathe.
Also, Discover Card. It’s hard to beat that 5%, and the rotating categories that qualify are broad and useful.
Customer service is VERY important. The lack of it is why I cut up my two American Express cards.