The Best Credit Cards In Their Class

Aleksandra Todorova from Smart Money magazine put together a list of the top credit cards for students, rewards programs, cash or gas rebates, financial rewards, and low rates.  He provides a thorough comparison of the cards considered and explains the benefits of each card recommended. Here are the highlights:

Student Cards
The Citi mtvU Platinum Select Visa Card for College Students offers bonus points for a good GPA, staying current on your bill, staying within your credit limit, and money spent on textbooks.
 
Rewards Programs
American Express Membership Rewards - “the oldest and remains one of the most comprehensive programs around.”

Citi ThankYou Network – “offers innovative ways of accumulating points and nearly all of Citibank’s rewards cards are fee-free.”

Cash or Gas Rebates
American Express Blue Cash for aggressive spenders – “5% cash back on purchases at gas stations, supermarkets and drug stores and 1.5% on everything else, once you spend $6,500 in a given year”.  Am Ex Blue Cash is the card that we use for almost all our purchases.

The Platinum Discover Gas card is the runner-up, “a favorite among lighter spenders.”
 
Financial Rewards
Fidelity Investments 529 College Rewards card – “has the most generous rebate rate — 1.5% of all purchases will be deposited into a 529 Plan”.

There were two runners up, Fidelity Investment Rewards Card, which “converts MBNA’s rewards program points into investment dollars at a generous 1.5% rate” and One from American Express, “1% of your purchases are contributed to a high-yield savings account, which currently earns 5%. The drawback: The annual $35 fee.”
 
Low Rates
For those that carry a balance it makes sense to go with the lowest rate you can on a card.  The winner was Simmons First Visa Platinum “with a 7.25% fixed APR” and the runner-up the Capital One Platinum Prestige card, “7.89% APR, reserved for people with excellent credit”.

There you have it, a card for every need.  Of course, if you can’t be responsible with a credit card you probably shouldn’t own one but used correctly a credit card can be a great financial tool.

How to Use Credit Cards to Simplify Your Finances

Want to keep on top of your spending with minimal time & effort? Not only do credit cards offer cash back, if used properly they can also help you simplify & organize your finances.

Use Credit Cards Wisely
As I mentioned the other day, we use American Express Blue Cash to earn cash back but we only use this approach because we’re responsible with our spending and pay off our balance in full each month. If you’re not confident you can be responsible with a credit card then using it to earn cash back and organize your finances in not a smart move.

Tracking Your Finances
One of my favorite things about using a credit card is it makes it easy to keep track of what you’re spending your money on with little effort. All of the cards I’ve ever used have features where you can download the last several months of activity to your computer. They typically offer direct downloads into Quicken, QuickBooks and Microsoft Money or you can save the data on your PC in a QIF, CSV, or Excel format.

I often download directly into Quicken and save it off as a CSV in case I want to use it for some other purpose later on. One thing to keep in mind is that many credit card companies only store your data for three or four months so make sure you keep up to date on your downloads.

Keeping It Simple
The ideal approach would be to use only one credit card so you only have to download information from one company. Since some merchants don’t accept American Express, I keep a Chase Visa card as a backup so I have to manage two different cards. The fewer you have, the easier it is to keep up with downloads and payments

Electronic Statement Archive
In addition to offering the capability to download your spending data, many companies also offer electronic statements where you can view current and old statements online in HTML or PDF format. They keep your statements online for several years, making it easy to go back on check on old statements. If your bill is stored in PDF format you can also easily save it to your computer to keep your own statement archive.

In an effort to save money on printing & mailing costs many credit card companies are urging customers so sign-up for electronic delivery only. They may not give you access to online statements unless you agree to stop receiving paper documents in the mail and only view them on the Web.

Analyzing Your Spending
Once you have your spending data downloaded onto your desktop or into personal finance software such as Quicken or Microsoft Money you can use that information to look for trends in your spending and make any necessary adjustments to your budget.

Both Money & Quicken offer great reports and charts that categorize your spending and give you a good overview of where your money goes. You may have to manually set categories for your purchases but some credit card companies help you save time by including the category for each purchase when you download your spending data into personal finance software.

Some credit card companies provide analysis of your purchases on their website, without even having to go through different software. For example, our Blue Cash card has a year end summary online that breaks spending down by categories. I can tell from a quick glance that we spent $1,745.85 eating out and $4,645.07 on our car last year. Of course if you use multiple credit cards you’ll have to consolidate this information to see the bigger picture.

Simplifying Your Finances
So how do all of these things simply my finances? The answer is one simple word, time. Having your credit card data and statements in one place, easy to access, categorized, and summarized gives you a quick and easy window into your spending habits. The best part is it requires minimal effort from you, which saves time. If you have a million things going on in your life like I do, keeping it simple and quick will mean you’re more likely to keep up to date on your money.

Credit Card Benefits

• Earn Cash Back
• Simplify Your Finances

Why I Love My American Express Blue Cash Card

Credit cards can be a useful financial tool for those that access credit responsibly; they can actually be used as a way to make some extra money!

Our Rewards Card
I checked the American Express website today and saw that our annual rebate credit came through this month. We earned a cash rebate of $330 for our purchases, not too shabby. In years past when we put big chunks of money such as major home improvements and vacations on our credit card we’ve earned over $600 in cash back!

How Do We Get Hundreds in Cash Back?
We use our American Express Blue for almost everything we buy. Some places don’t accept American Express because they charge higher merchant fees, which is why they can afford to give us cash back. We have a backup Visa Chase rewards card for cases like these that offers cash back as one of their rewards.

When I say we use plastic for everything, I mean everything! I hate spending money but anytime I have to I pull out the credit card. Over the course of a year all these purchases add up and earn us hundreds of dollars cash back.

Why a Rewards Card Works for Us
Credit card cash back is some of the easiest money I’ve ever made. We don’t have to do extra work, just spend money like we normally would. However, rewards cards are not for everyone. This strategy works for us because we have the cash to pay for the things we buy on credit and pay off our balance in full every month.

We also make sure to pay our credit card bills on time. The cash back agreement says if you make one late payment you forfeit your rebate for the whole year. Each month our statements shows how much cash back we’ve earned to date. Our total annual rebate appears as a credit on our statement one month following our card anniversary. Since we get a credit on our card as opposed to actual cash we also have to make sure we don’t spend extra money the month we get the cash back. If we did this we wouldn’t really be making any money on the cash back. We make sure we don’t change our spending habits the month we get the credit.

Avoid the Cash Back Mentality
One trap people fall into is thinking of cash back as saving money rather than making money. A person using the saving money approach might think, “I can buy this item I really want because I’m saving money on it with cash back.” The reality is you’re only getting 1–5% cash back on your credit card so you’re not even saving enough to pay for sales tax. If you look at cash back rewards as a way to make a little extra money by using a credit card to buy as you normally would then you’re less likely to make foolish spending decisions

Why I Love Our Credit Card
I’ve given credit cards some negative coverage in the past and decided it was time for the other side of the coin. Credit cards are not evil. It’s the misuse of cards that causes many people debt problems. There are many advantages other than cash back rewards to using credit cards that I’ll talk about in the future. If you use credit cards responsibly they can make you a little money and make your life a little easier. If you’re one of these people, give American Express Blue Cash a try! Of course, if you don’t have a disciplined approach to using credit then I would recommend not using it at all.