I need apr!

December 21, 2005 10:04 AM

I need a credit card with good benefits...

I graduate college last year and am just starting to pay off my student loans. That is the bad thing, the good thing is that I will be paying a good $600 a month which I want to put on a credit card to rack up a good credit rating and earn some bonuses.

I have never had a real credit card, I always use my bank of america visa card which basically is just debit.

I am looking for something that gives me miles, cash back, whatever. Anyone know of any good deals?

posted by outsider to Shopping (22 answers total)

The best credit card for most people's purposes (unless you strictly want miles or gas money) is the Citibank Platinum Dividends Select MasterCard. It gives 5% cashback on all grocery store, gas station, and pharmacy purchases, and 1% on all other purchases, up to a few hundred bucks a year ($300? $500?) Their website is also pretty good and lets you do most maintenance stuff online.
posted by rxrfrx at 10:11 AM on December 21, 2005

If you've bought a house and WellsFargo holds the mortgage, their card's "cashback" can be applied toward your mortgage principal. To me, that's huge.
posted by ewagoner at 10:14 AM on December 21, 2005

How about you Google for sites like these. What cards have you found? Where do you live? Do you travel?

I have the CPDSMC mentioned above as well an as Amex Blue Cash and they're both fine.
posted by kcm at 10:15 AM on December 21, 2005

Wait, no, I have a Diamond Preferred Rewards from Citi now. It replaced a Platinum Dividends out of the blue. I'm going to switch to the dividends version real soon now, make sure you don't get stuck with a "points" system and get de facto cash instead.
posted by kcm at 10:17 AM on December 21, 2005

Best answer: I would recommend the Bank of America Power Rewards Platinum VISA card. It has no fee and for every 50,000 you spend you can cash in the points for $1,000 back (2%, you can get cash with less points, but the rate is much worse, between 0.5% and 1%). I travel for work and expense at least $1000 a week, so this adds up pretty quickly.

What's better is that it is listed as an account in your BofA online banking system so you can use the Transfer Funds option to pay from your checking account. The transfer takes 1 business day and makes my life very easy. If it's your first card this can take a lot of the stress out of receiving and paying bills.
posted by cmicali at 10:24 AM on December 21, 2005 [1 favorite]

Wait? You intend on taking one firm of debt and placing it into another form, with higher interest rates, to improve your financial situation?
posted by Pollomacho at 10:37 AM on December 21, 2005

I'd say the best rewards depend on what your goals are. For example, there are some cards that allow you to build up credit towards the purchase of a car.
posted by grateful at 10:37 AM on December 21, 2005

I have the citibank diamond preferred rewards too - i accrue points on it ridiculously quickly (um, i'm way over my budget, bad echo0720). I like it, the last few times I've redeemed points for Target gift cards, I think. I used to have the MBNA version, but they don't have as many double/triple points offers. I haven't looked into the cash back, but i think determining which is the better card would depend on your spending habits (hm, maybe cash back would be a better deal for me!). Oh, I also have an american express with membership rewards, which i've only kept b/c i accrued a gazillion and a half points in an old job, but you should avoid cards that charge annual membership fees, they are not worth it.

Oh, and like kcm mentioned, there are a TON of websites that compare cards. I think bankrate is one. Check Smart Money or Kiplingers for more recommendations. They are the personal finance gurus.
posted by echo0720 at 10:38 AM on December 21, 2005

Response by poster: Pollo, no. I am going to pay in full the credit card each month. Instead of paying it from my bank account directly to the student loan company I will pay thru my credit card and they pay off the credit card immediately. Its not going to sit on there for any length of time.
posted by outsider at 10:40 AM on December 21, 2005

Your loan holder lets you pay your loan with a credit card?

Further, there's a fairly good chance that a credit card issuer would consider paying off a loan with your card to be a cash advance rather than a purchase. Cash advances are treated far differently in terms of grace periods (usually none), interest rates (short term lower, long term higher), and rewards (generally not applicable). You would probably want to ask about these details specifically for any card you considered.
posted by jacquilynne at 11:09 AM on December 21, 2005

And no, you can't easily pay a loan off with a credit card.
posted by rxrfrx at 11:15 AM on December 21, 2005

but you CAN put a large amount down on a car! I just bought one and did the max of $2500 solely for the rewards. I just lowered the cash I paid by $2500 and paid the credit card from that chunk.
posted by kcm at 11:16 AM on December 21, 2005

Your loan holder lets you pay your loan with a credit card?

Mine does. It's not so rare.
posted by gaspode at 11:17 AM on December 21, 2005

Outsider -- does your loan company offer a small interest rate discount (like a 1/4%) for direct debiting your payments out of your bank account? If so, you might want to consider how much money you'd save in the long term by doing that vs. paying via credit card and getting cash back that way. I know that it is hard to think about things in the long term when you are young, but if you do the calculations, I bet you'll save A LOT more money by direct debiting (think about how your interest accrues and then gets capitalized back into the principal amount, etc.). Of course, if your loan company doesn't offer any sort of discount, then just ignore me!
posted by echo0720 at 11:40 AM on December 21, 2005

p.s. you should still get a credit card and be responsible with it, as you'll need to start building credit for future large purchases. okay, i'm done lecturing, sorry about that!
posted by echo0720 at 11:42 AM on December 21, 2005

You may have to forget about the benefits and concentrate on getting a credit card in the first place. That's not automatic unless you've already established credit by having a credit card or making timely payments on a loan. You probably got lots of solicitations during your last semester in college, but they stop after you graduate.

The first place to try is the bank that services your debit card.

If you can't get a card with the standard application, open a Secured Credit Card. You put, say, $1,000 in a frozen account and get a card with a $1,000 limit, secured by the account balance. After several months of timely payments, you will have established credit and can get a regular card.

If you're married, another way is to become a joint owner on your spouse's card. Or a parent could open a joint account with you, on his/her credit, which you pay off.
posted by KRS at 1:24 PM on December 21, 2005

I suggest the American Express Cash Rebate card. It's a standard AMEX green card, except with an annual cashback reward.

The nice thing about an AMEX green card is that there's absolutely no temptation to carry a balance, because you aren't allowed to do that.
posted by I Love Tacos at 1:38 PM on December 21, 2005

I suggest reading/researching on www.artofcredit.com
posted by 6:1 at 3:33 PM on December 21, 2005

Before you settle on that card - if you are paying $600/mo only to your student loans, it will take you nearly 7 years to get to that $50,000. In seven years, you're likely to lose that benefit from the credit card company, since the large print giveth and the small print taketh away.

I'd look for something that is a little more immediate.

Personally, I use a US Bank Visa tied to REI. It takes 1% of your purchases and transfers them to REI as dividends (and if you purchase at REI with the card you, you get double dividends from a normal purchase). For you that would be about $72 per year.
posted by plinth at 4:42 PM on December 21, 2005

Bear in mind if you have one late payment, for any reason, not only have you wiped out that year's benefits on most rewards cards, but you're going to be hit with a lot of fees.

I don't think this is a very good idea. Just pay off your loan the normal way.
posted by ikkyu2 at 10:09 PM on December 21, 2005

Discover Card "out of the box" gives you .25% back on all purchases up to $1500, .5 on your next $1500 (I think) in purchases, and 1% above that. That's if you take cash... with different merchant rewards, you can get (up to) double that amount.

BUT if you ask to change to a "gas", "restaurant", or "home improvement" card, you get 5% on that stuff, and the scale reverses (1->.5->.25) for other purchases. Though in your case, the standard deal might be better, since you'd go way over $1500. (I learned a lot about Discover from my own AskMe question... figured I'd pay it forward.)

I'm not sure exactly what rxrfrx meant by "up to a few hundred" -- is that hundred in rewards or in purchases? That either makes Discover much better or much worse.
posted by SuperNova at 12:12 AM on December 22, 2005

SuperNova- up to a few hundred dollars in cashback. It's either $500 a year or slightly less.
posted by rxrfrx at 5:57 AM on December 22, 2005