Student Credit Card and Credit Education Blog

As Americans, we love our options. Dunkin Donuts or Starbucks. McDonalds or Wendy’s. For that matter, Biggie-sized or regular. It can be tough to decide.

The same goes for your credit card decisions. Visa or American Express? Debit or credit?Pay an annual fee? Or, which type of reward card should you get - points, miles, or cash back?

Everyone has a preference here. Those who swear by specific brands (say, Delta or Starwood) and only participate in flights and stays with these brands may wish to look more closely as cards which provide airline miles or hotel stays. In addition, frequent use of this card can sometimes provide you with a complimentary upgrade to a better class of airfare or hotel room. However, if you were to use mileage, it can sometimes take quite a bit of spending before you can get any of these high-end bonuses. Also, virtually all of these types of cards carry an annual fee, which is usually between $50 and $100 per year. So, minimal usage (and subsequent rewards) will be negated by the annual fee.

Additionally, you can get a card that provides “points” for you to spend within their array of merchants. One example, is the Citi Diamond Preferred Rewards Card. The variety of goods you can get range from electronics to gift cards. However, sometimes the rate from dollar spent to item purchased can be high. On the lighter side of your wallet, these types of cards rarely carry an annual fee.

Finally, there is the straight cash back card (such as the American Express Blue or Chase PerfectCard) which give you a percentage of your spending back as either a check or applied against your balance. These cards are my preference, as they allow you to do what you want with the money you earn. Also, you generally receive a higher percentage back for certain purchases. The aforementioned Blue Cash, gives you bonuses for groceries, drugstores and gas. For these, it starts at 1.5% but goes up to 5% once you reach an annual spend of $6,500. The PerfectCard simply focuses on gas, but provides you with a great 6% back for the first 90 days, and 3% afterwards. An excellent choice for those with long car-based commutes.

Again, there are many, many options. But, do your research on credit card offers and choose what you feel best matches your spending habits.