Credit Card Guide

Best Credit Cards

Discover it® Miles

 

BenefitsDiscover it® Miles has a great first-year offer for cardholders to double the number of miles they earn in the first year. In other words, if you earn 40,000 miles in your first year with Discover it® Miles, you’ll end up with a total of 80,000 miles thanks to Discover’s miles match. Earn unlimited 1.5x miles on all purchases and enjoy the freedom to fly on any airline or stay at any hotel, with no blackout dates. This all comes with no annual fee, so you get a powerful and flexible travel card with no cost to you annually.

 

Verdict – While Discover it® Miles may not come with an upfront travel rewards bonus, it is a powerful card to boost the miles you earn without any extra costs. Travelers will love the freedom to fly their favorite airline without worrying about blackout dates, and redeem your rewards in either cash or travel credit.



 

Compare with other excellent Travel Cards

Discover It

Capital One® Venture® Rewards Credit Card

 

Benefits: Are you a jet setter looking for a card that can take you all over the world? The Capital One™ Venture® Rewards Credit Card might be just the card you need. Offering an impressive 40,000 bonus miles (limited-time) after spending $3,000 in the first 90 days, this card offers travelers one of the most flexible travel rewards programs around. Cardholders get 2x miles on all purchases. It comes with a very competitive $59 annual fee, which is waived during the first year. For international travelers, don’t worry about any foreign transaction fees on any purchases while traveling abroad. Foreign transaction fees tend to run at 3%, so you can plan to save a lot of dough if you travel overseas frequently.

 

Verdict: The main benefits of the Capital One™ Venture® Rewards Credit Card are in its flexible rewards program, 2x miles for everyday purchases, and a low annual fee. Other travel rewards cards may offer large rewards for spending, but the Venture® Rewards Card makes up for it by allowing frequent travelers the flexibility to travel on airlines of their choice, while staying in their favorite hotels, and earn impressive miles along the way.

 

Compare with other excellent travel cards

Chase Freedom®

 

 

Benefits – Chase Freedom® offers up to 5% cash back on rotating categories throughout the year, while automatically giving unlimited 1% cash back on all other purchases. The 5% cash back categories rotate quarterly and include purchases at grocery stores, restaurants, gas stations, wholesale clubs and department stores, giving you the power to earn 5% back on up to $1,500 in purchases each quarter. Just remember to enroll in each new quarterly rewards offer. No annual fee is a nice bonus too. New Chase Freedom® cardholders can earn up to $450 in cash back rewards during their first year.

 

Verdict – If you are a frequent shopper looking for ways to maximize your cash back rewards, the rotating 5% reward categories can help you build-up a sizeable reward quickly. Since the high-value spending categories change each quarter, make sure you keep an eye out for emails from Chase reminding you to enroll every three months. With an otherwise unlimited 1% cash back on all other purchases and no annual fee, Chase Freedom® is a great everyday credit card for those with good or excellent credit.

Blue Cash Everyday® Card from American Express

 

Benefits – The Blue Cash Everyday® Card from American Express also offers a strong cash back program that focuses on many high spending categories. Earn 3% at all supermarkets in the United States (up to $6,000 spending annually), 2% at gas stations and some department stores, and 1% cash back on all other purchases. Enjoy 0% introductory APR for balance transfers for the first 12 months, which reverts to a variable rate after that. Receive $100 statement credit after $1,000 spending within the first 3 months of having the Blue Cash Everyday® Card. To top it all off, there’s no annual fee.




 

Verdict – This card is a great option for cardholders to earn valuable cash back on everyday purchases throughout the year. With no annual fee and 12 months of 0% APR, the Blue Cash Everyday® Card offers cardholders a nice balance between cash back benefits and initial balance transfer options.

 

Compare with other excellent Cashback Cards

Chase Slate®

 

 

Benefits – The Chase Slate® has been named the “best balance transfer credit card” by Money Magazine for four years in a row. It’s not hard to see why. With Slate®, Chase offers $0 transfer fees for the first 60 days and a 0% APR introductory rate for the first 15 months of holding an account. Slate® also comes with no annual fee and your APR won’t increase if you happen to make a late payment. All of this alongside your Free FICO® Score and Credit Dashboard provided by Chase, so you can keep a close eye on your credit as you work to pay down that balance.

 

Verdict – Slate® offers some valuable benefits to those looking to transfer a balance without all sorts of hidden costs. The introductory APR and no transfer fee offers make this a no-brainer for some, especially when you don’t have an annual fee on top of it.

Millennial Money Credit Card Guide

 

If you’re reading this, I bet a credit card is on your mind. Maybe you’re looking for a better cash back card to go along with an improved credit score, or it could be your first credit card ever. Regardless of where you are financially, it pays to have a solid understanding on the potential benefits of using a credit, while staying aware of the potential pitfalls.

 

Now more than ever, it seems as though there are more credit cards available for all walks of life. Our guide to credit card guide is designed to be no-nonsense, to the point and will hopefully help you navigate the sometimes overwhelming world of credit cards.

 

When managed effectively, having a credit card that fits you well can be a powerful thing. Routine expenses like groceries and gas can get you serious cash back. Earn loads of miles when booking a trip with a travel rewards card. Even use a credit card to improve your credit. For those in the financial position to pay off your balance each month, having a credit card provides the flexibility to help you manage both planned and unexpected expenses.

 

Millennial Money’s guide to credit cards is designed to help you sort through the nonsense, educate yourself on credit card management, and learn how to prioritize criteria when deciding on which credit cards to apply. We’ll even mention a few of the best rewards credit cards around {link}!

Why Would I Need a Credit Card?

 

Before we get into some of the more exciting benefits of today’s credit card offers, let’s take a look at some of the more basic, critical information: why would I need a credit card in the first place. For some if you, this may be more obvious to you, but it’s worth reading and repeating.

To put it simply, credit cards are most useful as they allow us to spend beyond our means (also a major pitfall, which we will cover more later). Or in other words, they give us the spending power we otherwise might not have when relying just on checking or even savings account balances. Maybe you’re just starting a lucrative new job that comes with a big commute, and then the transmission on your car goes out. How can you afford an unexpected $6,000 bill when you haven’t even cashed your first paycheck? Putting that expense on a credit card can give you the flexibility and time needed to build up your finances so that you’re not completely wiped out. Provide that you have the financial means to pay off the new balance, that credit card effectively sets you up with a payment plan. Providing a buffer between your expenses and assets is the most fundamental benefit to owning a credit card.

 

Not far behind in importance is the ability to establish and improve credit. A lot of new college graduates find the sudden rush of expenses overwhelming after finishing up school and moving for their first full-time job. As you’d expect, many of those graduates are also jumping into the professional world without much credit (if any). Getting a low-limit credit card is an excellent way to work your way towards good credit by simply establishing a credit history and showing that you can manage a balance and pay it off in a timely manner.

 

Nowadays, more and more people are strategic in selecting a credit card because of the cash back and travel reward benefits that come with paying off regular expenses. As you’ll see, there are many potential advantages available to those with good or excellent credit.

 

Regardless of your finances, a credit card can provide tangible benefits not available when using a debit card. In many cases you don’t NEED a credit card. But with a steady income and smart credit card management, you could earn hundreds of dollars in cash back offers, fly across the country for free, while boosting your credit.

Choosing a Credit Card

 

There are many different things to consider when searching for a selecting a credit card. It can be difficult to sort through a lot of the marketing and focus on the key factors that will ultimately affect how useful a credit card is to you. Here are a few of the most fundamental things to consider.

 

Annual Percentage Rate (APR)

APR is your yearly interest rate. It tells you how expensive it is to carry credit card debt with a given credit card. The higher the APR, the more you will pay for carrying a balance on your credit card. The best APR offers are often reserved for those with excellent credit.

 

Periodic Rate

The periodic rate determines the added cost on your monthly billing statement. In other words, credit card companies use periodic rates to figure out how much to charge you to finance your balance on a monthly or periodic basis.

 

Rewards

We’ll cover this one in more detail later! Are you looking for cash back on your purchases, or to build up airline miles and hotel points? You might even be looking at a credit card promoted at a specific retailer. Think about what will benefit you most before applying for a bunch of different rewards cards.



 

Grace Period

This is the amount of time you have to pay off your balance before interest starts to accrue. Many credit cards come with a generous grace period, though not all do. Get a solid handle on your payment schedule before running up a balance.

 

Finance Charges

Using a credit card that uses an adjusted balance finance charge might help save you money. Some companies factor-in your previous month’s balance, which can end up costing you more. It is also helpful to know if there is a minimum finance charge from your lender.

 

Security Features

How does that credit card protect all of your critical, personal information? Chat with a lender about the levels of security provided with any credit card you consider. Fortunately, more and more (if not all) credit cards come with a built-in chip designed to protect you better than the traditional magnetic strip. In addition, it is helpful to know how to protect yourself from credit card fraud. Do you want to receive fraud alerts? How will your lender respond if your account is compromised?

 

Terms and Conditions

It can be a pain, but reading the fine print is the only way to make sure you understand and agree with all of the requirements associated with opening a new credit card account.

Benefits at Sign-Up

 

Now to the fun stuff! Competition between credit card companies has created a healthy market for consumers looking to get their hands on a credit card that offers them a healthy balance of spending power and benefits. Not surprisingly, some of the most effective ways credit card lenders are able to secure new customers are through benefits at sign-up. Check out a few of the best rewards cards for 2017 {link}.

 

Free Airfare

This one is admittedly always appealing to me and can be hard to pass up. When in the market for a new travel rewards credit card, I like to compare the number of miles offered by different companies. It’s pretty common to get 30,000 or 40,000 free miles after signing-up for a new travel card, though it is often conditional on spending a specified amount of money in the first 3 months or so of owning the card. Compare different offers to find the best available – you’ll be surprised to find how many lenders will offer 50,000 or more miles up front. There are many excellent travel credit cards and offers available {link}.

Miles aren’t everything though, so always make sure you consider the terms that will directly affect how you can use your card and manage the balance.

 

Intro rates

Perhaps the most beneficial perk in acquiring a new credit is the introductory rate. Plenty of companies will offer as low as 0% APR (annual percentage rate) for a specified period of time – almost always somewhere between 6 and 18 months. This means you don’t pay interest on your balance for that period of time. Just make sure to mark your calendar so you don’t end up surprised by accruing interest down the road!

 

Cash Bonuses

If you’re in the market for a cash back rewards card, keep your eyes peeled for cash bonus offers. Instead of earning 30,000 travel miles, you might end up with $300 cash after spending $1k, or whatever amount the credit card terms indicate. This is an awesome benefit. But be careful you’re not just spending money to make money – that cash bonus is only helpful if you can afford those expenses in the first place. Check out some of the best cash back credit cards for 2017 {link}.

 

No Annual Fee

A lot of premium credit cards come with an annual fee of $100 or more – nothing to sneeze at. To encourage customers to sign-up and spend, some credit card companies will waive the annual fee during that first year. This may not sound like a big deal, but it goes nicely when paired with one or more of the sign-up perks we already covered.

Pitfalls to Avoid

 

Spending beyond your means

I mentioned this earlier. It’s amazing how fast you can spend money when your checking account balance doesn’t drop with each purchase. Just a week or two of unrestricted spending can lead to a heavy balance. Keep a frequent eye on your balance (daily) if you find yourself using a credit card for many expenses.

 

Rotating cash back deals (seasonal)

One type of perk advertised heavily is cash back deals on everything from groceries and gas, to restaurants and movies. For example, your credit card might give you 5% cash back on grocery purchases from January through April. And that’s exactly the point. You won’t always get maximum cash back on all categories all the time. Credit card companies tend to rotate these cash back deals seasonally, meaning it pays to be strategic in what you use your credit card to purchase.

 

Hidden Costs/Annual Fees

Lenders are usually pretty upfront about any annual fees that come with a new card. Chances are that annual fee will be waived during the first year of spending. Just make sure you don’t forget that you will need to start paying that $99 or so annual fee (amounts will vary) a year or so into using the card. This usually doesn’t deter folks who use credit cards frequently, but it’s still worth keeping in mind.

 

Flexibility of Benefits

This is a really important. How much of your balance are you expected to pay at the end of each month? Many credit card lenders will let customers make relatively small ‘minimum’ payments on balances carried over from month-to-month. But not all do this. If you plan to use your credit card to pay for more substantial expenses, like fixing your car or financing a two-week vacation in Bali, make sure you aren’t expected to pay off that balance of $5,000+…unless you have planned for it already.

 

Late Payment Penalties

Most lenders will hit you with a fee for any late payments on your account. This doesn’t just apply to really late payments. You could be billed for $50 for submitting payment ON your account’s payment due date. The devil is in the details.

 

To sum this section up: read up on the credit card terms and ASK QUESTIONS. The best way to get information on a particular credit card is to chat with a company representative and have a list of prepared questions that you need answered before you decide to move forward, either with an application or with using a credit card you’ve already been approved for.

Situations Where Credit Cards Are Helpful

 

Building Credit

We touched on this earlier. Building good credit is based on your history of making monthly (or regular) payments on-time. For a lot of people, opening a credit card account is a great and accessible way to start building credit, so that you can apply for a car or home loan a few years down the road. The longer your history of on-time payments is, the better shape your credit score should be in. Try to avoid carrying too high of a balance for any extended period of time. Having a high debt-to-credit ratio will actually hurt your credit score. So think of credit cards as a useful tool for building credit, but only when managed responsibly.

 

Renting a Car

This is one of my favorite credit card purchases! If you’re planning to use your credit card to rent a car on your next vacation, check to see if your card comes with secondary auto insurance, also known as Collision Damage Waiver (CDW). CDW can prevent you from having to pay anything out of pocket if you are in an auto accident while on travel. Chances are you’ll need primary auto insurance in the first place, but your credit card’s benefits may help cover anything else associated with a headache. Call your credit card company to learn more about these details before traveling, as there you might be required to decline any insurance offers from the car rental agency, and some vehicles may not be eligible for coverage.

 

Emergencies

Even without a credit card, it’s important to ‘plan’ for emergencies by keeping money in savings that can help bail you out when the unexpected becomes reality. Having $2,000 cash or more for these situations is really helpful. But keeping that much cash on hand can be tough. Having spending power with a credit card or two provides that nice safety net when you’re faced with a huge vet bill or need to replace your personal laptop all of a sudden.

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