Credit cards can be a dangerous thing. If used irresponsibly, they can encourage you to frivolously spend, live beyond your means and rack up expensive debt. However, if used properly, credit cards can be a great way to get a discount on your everyday purchases or earn some bonus rewards. Here are some of the best credit cards out there for 2015.
For Simplicity’s Sake: The Best Cash-Back Cards
For most people, it’s best to own a cash-back credit card. These cards may give you up to 5% of your money back on certain purchases, and because the rewards are sent in the form of a check, or as a credit to your account, you won’t normally use them to purchase more than what you have already. Here are the best cash-back cards we have found this year:
- Citi Double Cash Card. Get 1% cash back when you use the card to purchase something, and an additional 1% when you pay off that purchase. Along with no annual fee, there are no categories to remember, no caps and no enrollments necessary. This is simply the best all-around card for all your expenses.
- American Express Blue Cash Preferred Card. This one will earn you 6% cash back at grocery stores (up to $6,000 per year), 3% at gas stations and department stores, and 1% on all other purchases. You will also get $150 back after you spend $1,000 in the first three months. However, there is a $75 annual fee, so after the first year you need to spend at least $1,250 on groceries per year to break even. This card is best for households who spend a lot on groceries and gas every year.
- BankAmericard Cash Rewards Credit Card. This card will get you 3% cash back on gas and 2% at grocery stores (there is a combined limit of $1,500 per quarter), and 1% on everything else. You also get $100 back when you spend $500 in the first 90 days. Bank of America (BofA) customers get an additional 10% bonus any time they redeem cash into a BofA account. There is no annual fee and rewards do not expire. This card is best for existing BofA customers.
More Is More: The Best Non-Cash Rewards Cards
For people who travel often or love to shop, sometimes a points or miles card makes sense. Here are a few of the best:
- Starwood Preferred Guest Credit Card from American Express. This card racks up an amazing amount of points that you can use for stays at Starwood hotels. The card boasts a 10,000-point signing promotion after your first purchase and 15,000 more points after spending $5,000 in the first six months. You’ll also earn up to 5 points per dollar on purchases from Starwood hotels, and 1 point per dollar for all other purchases. You can redeem points for free hotel stays and/or flights on 150 different airlines. The annual fee is $0 the first year and $65 thereafter. Best for Starwood hotel lovers.
- Barclaycard Arrival Plus World Elite MasterCard. This airline miles card boasts a whopping 40,000 bonus miles when you spend $3,000 in the first 90 days. You also earn 2x miles on all purchases. When you redeem your miles for travel statement credits, you get 10% of your miles back to use toward your next redemption. The annual fee is $0 the first year and $89 thereafter. Best for people who want good overall travel rewards.
- Citi ThankYou Preferred Card. This general rewards card gives you 30,000 bonus points when you spend $2,000 in the first four months. You also get 2 points per dollar when you use it for dining and entertainment, and 1 point per dollar for all other purchases. There is no annual fee, and you can spend your points on myriad items (including travel) at the thankyou.com website. This card is best for people who love to shop but can do it responsibly.
“Have an outstanding credit card balance? Forgo a rewards card for one with the lowest interest rate.” Tweet
Help with Debt: The Cards with the Lowest Interest Rate
If you have an outstanding credit card balance, you should forgo a rewards card in favor of one with the lowest interest rate you can find. Currently, here are the best:
- Citi Simplicity Card. This card offers a one-time balance transfer fee of 3%, and then a 0% APR on balance transfers and purchases for 18 months. Thereafter, the APR will range from 12.99% to 22.99%, depending on your credit score, and balance transfer fees will be the greater of $5 or 3%. You will never be charged a late fee, a penalty fee or an annual fee. You will also get no rewards. This card is best if you want an all-around low-fee, low-interest-rate card.
- Chase Slate. If you have a big outstanding credit card balance, you need this card. It offers a 0% balance transfer fee with a 0% APR on balance transfers and purchases for 15 months. Thereafter, the APR will be 12.99%, 17.99% or 22.99% depending on your credit score. Balance transfer fees will be the greater of $5 or 3%. There is no annual fee, but there is a penalty APR of 29.99%. Also, there are no rewards.
- BlueCurrent Credit Union Platinum Visa. If you are looking for the lowest ongoing interest rate, this is your card. It offers a no-nonsense APR of 9.9%, which does not change for penalties or cash advances. There is no balance transfer fee and no annual fee. You also get a reward of 1 point per $1 spent on purchases. If it’s going to take a long time to pay off your debt, choose BlueCurrent.
Use Your Powers Wisely
If you have a great rewards credit card, it can be tempting to spend more money than you usually would. It is therefore of utmost importance to create a budget and stick to it. As long as you are diligent about sticking to your budget, your credit card will be a valuable tool for everyday use.
Disclaimer: Consult your tax advisor before taking any action on topics discussed in the blog.