What's your favorite credit card?

October 1, 2013 9:07 AM

I am (finally) shopping for a credit card and I want something with cash back and/or airline rewards. What do you recommend?

I'm in my mid 20s and I've been using a debit card or cash up to now. I don't make a lot of money so I'm very on point about my spending habits and paying off the monthly balance in full should not be a problem for me...it's just that I haven't made the leap because I feel overwhelmed by the options and possibility of hidden fees etc. etc.

Some background:

- I have an account with USAA (but read mixed things about their credit cards)
- I have a joint account BoA Visa credit card with my mother that she set up but I've never signed up for a credit card on my own
- I don't have a car so don't care for credit card gas perks
- Given my financial situation and preferences, I don't see myself in the market for buying a house or a car anytime in the short or long term. I also have no desire to go back to graduate school. Does this mean I don't need that much credit?
- I spend most of my money on groceries/essentials (most of it is rent but I pay for that through a bank transfer)

To be honest, I'm not really sure what I should be looking for in terms of a credit card or what restrictions I might have since I'm young and inexperienced. Since I do use Amazon somewhat frequently, I was leaning towards getting an Amazon rewards card. As for other rewards, I'd love to just get cash back or airline miles.

What's your favorite card and what do you recommend?

posted by bluelight to Work & Money (26 answers total)

I have the Chase Freedom Card, which has no annual fee and gives me 1% cash back, and 5% cash back on certain categories every quarter. Does it for me.
posted by i_am_a_fiesta at 9:09 AM on October 1, 2013 [2 favorites]

American Express because their customer service is excellent. It's not always accepted at small vendors, but I usually pay cash at Mom and Pop places anyway.

Service is the most important differentiator to me because I travel a lot. If your mostly looking for free/bonus mile stuff you might like the Amazon card (which Mr. 26.2 has and prefers).
posted by 26.2 at 9:19 AM on October 1, 2013

"What's your favorite card?" is not the question you want to ask, since there are different products that work well for different people. For instance, my favorite card is my American Express TrueEarnings card, which is a Costco joint venture and gives me 2% back on Costco purchases, 3% back on gas, and 2% back on restaurants and travel. I spend a bit in all those categories so it works for me. If you spend most of your money on Amazon and groceries, you want a card that gives you rewards on those categories. The Amazon card might be the best for you if that's the bulk of your spending, or if groceries are the bigger spending category, there are cards out there that give 3-5% back on groceries.

Note that if you ever carry a balance (in other words if you do not pay your balance in full every month) then the interest will negate any rewards you get. So it's only worth it to get rewards if you also pay the full amount due on your bill every month.
posted by rabbitrabbit at 9:19 AM on October 1, 2013 [4 favorites]

I wholeheartedly endorse rabbitrabbit's sensible answer. The right card for you will likely not be the right card for someone else.

I think you might find this e-book helpful.
posted by cheapskatebay at 9:23 AM on October 1, 2013

Amex also has a Blue Cashback Preferred card that charges a $75 annual fee, but gives 6% back at grocery stores and 3% or something back at department stores. The card also will give you $150 cash back if you spend something like $1000 in the first three months--covering your annual fees for the first two years. My wife and I use it just for grocery purchases, and we've gotten some great cash back already.

As rabbitrabbit notes, there's also a good Costco card, which gives bonus cash back at purchases there, but also has no fee.

For most other stuff, I've historically used the Amazon.com card, which is really handy.

It all depends on 1) how much you charge; 2) whether you carry a balance; and 3) where you spend your money.
posted by Admiral Haddock at 9:24 AM on October 1, 2013

Also, here's a decent article on some grocery rewards cards.

I have found, though, that cash/debit only places like cash and carry or WinCo are actually cheaper than getting rewards on normal grocery stores, since they don't pass along the credit card fees to the customer in the form of a markup, so rather than use a grocery rewards card I just go to the cheaper grocery store. If you have one convenient to you, your best financial bet would be to get the Amazon card and then spend less by spending cash at the cheap grocery store.
posted by rabbitrabbit at 9:24 AM on October 1, 2013

This fatwallet thread has been my go-to place for looking up credit card deals for years. It's constantly updated, which is good because the terms and offers from banks constantly change.

As far as my general tips:

Always go with cash back, preferably after each statement and directly deposited in a bank account, rather than a rewards account that fills up until it hits $X and they send you a gift card. Airline rewards and whatnot are pretty much never a better deal in terms of value and involve significantly more hassle.

Never get a card with an annual fee. There are plenty that don't have one, and the terms can always change to give you less rewards so even if you're making more in rewards than you pay in the fee the first year that's no guarantee that it will stay that way. Also, for credit score reasons, it makes sense to keep credit card accounts open for as long as possible (even if you no longer use them), so an annual fee can have long-term negatives.
posted by burnmp3s at 9:28 AM on October 1, 2013 [11 favorites]

I also agree with rabbitrabbit's response, and think you might find the search tools at NerdWallet helpful to get a sense of some of the options that would fit your particular situation. I think "annual fee or no annual fee" is the first thing you should look at, given your comfort level. It sounds like you won't want an annual fee, so that rules some cards (like most Amex cards) out.

That said, I am a USAA member as well, and when I was a bit younger and closer to your life situation, I was very happy with my USAA Mastercard. They're not the best for min/maxing rewards points (the point value on the dollar's a bit lower than some others out there), but that's ok if you're not spending very much on the card and want to keep things simple. I chose to take my points in cash and roll them right back into paying my monthly balance every couple of months when I thought about it, all of which I could do through the same USAA portal you're using now.
posted by deludingmyself at 9:28 AM on October 1, 2013

NerdWallet has a decent search function that lets you filter by different criteria, including reward type, fees, and monthly balance.
posted by zamboni at 9:29 AM on October 1, 2013 [2 favorites]

I have a credit union card which gives me 2% back on everything. I find that easy to figure out and good for my spending habits that covers everything. the cash back goes into my savings account every quarter.
If you do get a travel rewards card, then look at the dollar amount that your points would be worth, because if you get 1000 miles which saves you x amount on travel and a cash back card gives you the equivalent in cash back then wouldn't you want to go with the card that gives you cash that can be used on everything including travel rather than points which are limited.

I agree it is hard to figure out which card is best and I probably could research to find a better card. in the end I went with a card that was convenient and good. I wish that I could pick credit and drop credit on a whim when say I dislike the benefits that one card offers but unfortunately closing my old credit cards hurt credit history length. so I am careful about choosing my cards now.
posted by Jaelma24 at 9:38 AM on October 1, 2013

I'm happy with a card that I chose using bankrate.com and their comparison tools. Depending on income and spending habits among other things what is best for one person will not be such a good deal for another.
posted by TedW at 9:45 AM on October 1, 2013

we used nerdwallet just a couple weeks ago and found the perfect card for what we wanted.
posted by nadawi at 9:53 AM on October 1, 2013

To answer some of your specific questions, USAA cards are not the best for maximizing points, but with no annual fee, a high credit limit relative to what other companies offer, and excellent customer service, it's worth applying to boost your credit score and have an emergency credit reserve.

The Amazon Rewards card is excellent if you shop frequently at Amazon as it amounts to a 3% discount. Points are extremely simple to redeem - you link the card to your Amazon account, and will see an option to "pay with points". I usually let them collect until the holiday season, and then use them to make my gift shopping slightly less painful.
posted by psycheslamp at 10:18 AM on October 1, 2013 [1 favorite]

If you are interested in miles, rather than cash back, and if you have any big purchases coming up, I highly recommend the Chase Sapphire card. It's expensive at $95 a year, but I think the fee is waived the first year, and you get a huge amount of miles, like 40 or 50,000 if you spend $3000 within the first few months.

I don't ordinarily spend so much, but it made sense to me since I had to do some dental surgery anyhow -- and now I have like 60 or 70K miles that I can use with any airline.

All the above are correct, though -- what works for one doesn't work for another. And the point that paying off your balance each month is crucial is an important one.

Good luck!
posted by betsbillabong at 10:25 AM on October 1, 2013 [1 favorite]

I did some pretty thorough research, and I was roughly in the same boat as you, and ended up with a Chase Freedom card. It's exactly what I was looking for. No annual fee and it's nice to get 1% cash back on everything (as well as 5% cash back on random things through the year. For the next few months, for example, Amazon purchases count. I eventually also got an American Express Cash card, which is very similar, but gives me 3% cash back on groceries plus the 1% cash back on everything else. But you may need a deeper credit profile to get an Amex.
posted by General Malaise at 10:29 AM on October 1, 2013

Data point: I have a USAA Mastercard and I like to buy music abroad (from UK/European/Australian musicians, via Kickstarter/Pledgemusic/etc.) and USAA's security means it's almost impossible to use my card for foreign internet purchases. Otherwise I find it a great card for my needs, which are probably different to yours.
posted by immlass at 10:39 AM on October 1, 2013

Since you mentioned it, I thought I'd pipe in that I've had the Amazon Rewards card (offered through Chase) as my primary credit card for many years, started it in college, and have had nothing but positive experiences with it. The rewards on Amazon stack up fast for me (it's 3x for Amazon purchases, 2x for groceries & resturants, and 1x for everything else), and every time I've had to call Chase for support, I've gotten someone right away and they've always been helpful, clear, and friendly. I'm always mildly surprised since they're such a big company, but it's been a great experience.
posted by ninjakins at 10:47 AM on October 1, 2013 [2 favorites]

AmEx and Discover have both given me excellent customer service and both have no-fee cards with rewards you can use at Amazon, and Discover will also give cash back. I have had no hidden fees with either (although note that there are many, many card options under both umbrellas so just read the descriptions carefully). Both have great online service (as opposed to Bank of America, who I have found does not).
If you are not charging much per month, you aren't going to get enough rewards to make it matter and really not to make it worth an annual fee (broadly speaking).
I would say you are just building credit, so get a card without fees and use it carefully (keep paying it off monthly, that is awesome!). It's exciting to see a big credit limit, and part of your credit score is what percent you use of the credit available to you (so a higher limit means you are losing less of a percentage) but you're building credit for when you do want to buy a car or a house so using it responsibly is the most critical thing.
The Consumerism Commentary blog periodically does a review of different cards, you might check there once you narrow down your choices.
posted by KAS at 10:57 AM on October 1, 2013

If you carry a balance, interest rates will more than cover the cash back, points, etc. for the bank, so shop by low interest rate.
posted by Mom at 11:30 AM on October 1, 2013 [1 favorite]

I rarely travel except for a trip once or twice a year back home, so the best card for us is the Amazon Visa. Once it gets up to $100 or so in rewards cash, I just use it for purchases right at Amazon or get the $100 statement credit.

We also have a Chase Slate that we use for the 0% balance transfer for 12-18 months. (i.e., buy new tires or whatever at Sears, immediately balance transfer to Chase Slate, pay it off with no interest for a year)
posted by getawaysticks at 11:43 AM on October 1, 2013

I personally use a Chase Marriott Visa for most purchases and previously had a Chase United Visa, but that works well for me because I spend a significant amount of time on the road for work (racking up pretty massive hotel bills), and make 2-3 international trips a year to see family. They do charge a hefty annual fee (~$85/year) and the interest rate is a little high. However, I generally don't carry a balance and get a lot of benefit from the various perks (extra miles/hotel nights, lounge passes, free checked bags, etc) that makes it worthwhile for me.

However, like many have said upthread, what is "best" will vary from person to person. If you're not looking for travel rewards, I would suggest looking for something with no fees - low interest rate would be a bonus too. The Amazon card might be a good option, although admittedly I don't know much about it. I would recommend looking for online comparison tools - a couple of people upthread suggested NerdWallet, which is a great starting point.

Bank of America's credit card program is okay (I had a BoA card in college and used it for years afterwards) but their customer service sucks - I've had much better experiences with Chase.
posted by photo guy at 11:58 AM on October 1, 2013

If you travel outside of the US often, USAA issues MasterCards with EMV ("Chip-and-Pin") upon request, which greatly eases payment in Canada, Europe, etc. In Brussels, for instance, it's impossible to buy a bus ticket at an automated kiosk without EMV.
posted by SemiSophos at 1:04 PM on October 1, 2013 [2 favorites]

I love my Amazon card and use it for everything. I forget their points scheme, but it's something like double points for food and gas, and triple for Amazon purchases. I already have a few hundred bucks in points banked up, which will make Christmas shopping that much easier. But, all things being said, I didn't go around and scrutinize every card and points plan when I signed up for my Amazon Visa.
posted by slogger at 1:30 PM on October 1, 2013

Dropped in to give some of the same advice you've already gotten in the thread. Two aspects I'll pile onto:

#1 You didn't mention whether you plan to carry a balance. If you plan to pay it off every month, I would agree with the generic "no annual fee" advice; if you don't plan to pay it off, I expect you'll find that you'll be better off with a card with an annual fee but a lower interest rate.

#2 Are you wedded to the idea of a card tied to airline miles? My opinion is that these cards make sense for people who are already flying a lot. Often some of the card benefits are intangibles like free checked baggage or early boarding or discounted/free access to the airline's lounge. If you are trying to compare cards with cash back against cards that give you miles, there are a number of sites around the web that try to assign a dollar value to frequent flyer miles. Typically that value is calculated to be between about $0.01 and $0.02 per mile.
posted by kovacs at 5:22 PM on October 1, 2013 [1 favorite]

Ah....this is your first credit card, EVER? You may not have the option to be picky about getting card. I am pretty anti-credit and did not suck it up and get one until a few years ago, and could only get one at my mom's credit union because the usual big names wouldn't take me.

I second reading NerdWallet about credit cards, but be forewarned that this may not be as easy as you think to get credit once you are out of college.
posted by jenfullmoon at 5:23 PM on October 1, 2013

If you are interested in miles, rather than cash back, and if you have any big purchases coming up, I highly recommend the Chase Sapphire card....

and

Are you wedded to the idea of a card tied to airline miles? My opinion is that these cards make sense for people who are already flying a lot. Often some of the card benefits are intangibles like free checked baggage or early boarding or discounted/free access to the airline's lounge.

Just another point of information - my brother loves the Chase Sapphire because he flies around the country a lot, and though he has a preferred airline it often makes sense to use one of the others for where he is going on a given week, and the Sapphire miles work with pretty much everyone. I, on the other hand, have a Delta Gold AmEx because most of my flying is to a place that Air France is my best option (and Delta partners with them). The miles are nice, but the main advantage for me is the stuff that kovacs mentions - extra bags, and priority boarding and discounted lounge access even though I didn't quite get enough miles this year to keep my Silver Elite frequent flyer status.
posted by solotoro at 7:28 AM on October 2, 2013