When was the last time you went credit card shopping? No, I don’t mean when was the last time you went shopping and paid for it with your credit card. I mean, when was the last time you went shopping for a credit card? If you’ve been using the same credit card for a number of years, it might pay to take a look at what new card offers are available. Warning: credit cards are not for everyone. If you’re carrying a balance on your credit card, the best thing you can do is cut it up and pay it off as soon as possible. While credit cards have advantages, they can also lead to serious trouble.
Our Credit Cards
My wife and I have been using a Chase Freedom card for probably around five years now. When we signed up, this card had a super great rewards program. It gave you the standard 1% cash back on all purchases. It also gave you 5% cash back in the three categories you spent the most in each month. But wait, it got even better. If you saved up your cash back and didn’t redeem it until you earned $200, they would throw in an extra $50 for free. And I think there was a signup bonus of $100. I was pretty excited about this card, and we earned a lot in rewards. I need to point out that we never carried a balance and paid it off in full each month. This is really the only way to make a rewards credit card worth it. If you carry a balance, then you’re paying more in interest than you will ever earn in rewards.
Anyway, over the years the Chase Freedom rewards program got scaled back. First they did away with the extra $50 payout once you accumulated $200 in rewards. Then they did away with the 5% cash back on the three categories you use most, and changed it to random categories that change each quarter. Basically, they made their card a lot less rewarding. We still use it and earn rewards, but it’s nowhere near as good a card as when we first got it.
Looking at New Credit Cards
This year I’ve been more active about looking at what other cards are out there. When our washer and dryer needed replaced a month or so ago, I decided to open a new credit card that had an 18-month zero interest introductory period.
I receive probably three or four credit card offers in the mail each week. Honestly, I hardly ever even open them. I usually just toss them. But every now and then I’ll open one up that has some really good features. There are some pretty good cards out there. One I’ve seen recently is the Discover® More Card, that offers the 18-month zero interest period I took advantage of. I’ve also heard a lot of people talk about the new Chase Sapphire Preferred card and the great signup bonus that comes with it. I also saw a good offer from US Bank, offering the standard 1% cash back, plus 5% cash back in two categories that you choose. It also pays 2% cash back on your choice of gas stations, grocery stores, or drug stores. Plus, if you wait to redeem your cash back until you’ve accumulated $100, they throw in an extra $25. I may just apply for this and replace my Chase Freedom card. I wouldn’t close the old credit card account right away, though. Rather I’d wait a few years to build up my credit history on the new cards before closing the old ones.
The Bottom Line
Maybe you’re satisfied with the credit card you’ve had for years. I know we’ve been satisfied with ours. The point is that credit card companies are coming up with new credit card programs all the time, and these new programs can be significantly better than what you’re using right now. I think going forward I’m doing to a credit card comparison every two years to make sure I’m using the best card to earn the most rewards.
What card do you use most and why?
8 comments
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Sean @ One Smart Dollar
September 27, 2012 at 9:47 am (UTC -4) Link to this comment
I have my long term credit card that I keep open because of the boost to my credit score. Then from there I use whichever gives me the best airline miles. If a good promotion comes up then I will get that card. I pay my cards off in full each month, but this allows me to travel with rewards miles.
Justin
September 27, 2012 at 11:06 pm (UTC -4) Link to this comment
I agree that keeping your card with the longest history open is a good idea. Like you mentioned, it helps with your credit score. My wife and I don’t do much traveling, so we opt for the cash back cards. But I do know people that really rack up the airline miles and have taken all kinds of free trips as a result.
Modest Money
September 27, 2012 at 11:48 am (UTC -4) Link to this comment
Good point about always being on the lookout for a better credit card. It is a very competitive industry and issuers are always trying to one up each other to land new customers. At the same time they are often scaling back the benefits of older cards assuming people are just going to keep using it anyway. This is a good reminder to apply for a better cash back credit card. I know there is a better deal out there that I was tempted by but I just didn’t pull the trigger at the time.
Justin
September 27, 2012 at 11:07 pm (UTC -4) Link to this comment
I was always one to just be content with the card I had. I’m coming around though to being less loyal to one card and finding the best one every couple years.
My Money Design
September 27, 2012 at 12:36 pm (UTC -4) Link to this comment
I actually have both of these – the Chase Freedom and Discover More. Both have worked out really well in terms of cash back. But my FAVORITE has been the American Express Fidelity Rewards card. I get 2% cash back on EVERYTHING! I know at first that sounds small, but you’d be surprised at how quickly EVERYTHING adds up! Altogether, I’ll be over $1000 in cash back on all my credit cards rewards. I love rewards programs!
Justin
September 27, 2012 at 11:09 pm (UTC -4) Link to this comment
I agree that 2% on everything would be pretty nice. So you’re saying you’ve earned $1,000 in cash back rewards in one year?! That’s impressive. I think we typically earn a few hundred a year.
Lance@MoneyLife&More
September 27, 2012 at 1:26 pm (UTC -4) Link to this comment
I currently have a chase freedom and sapphire preferred.cards. I got good sign up bonuses on both of them and like the 5 percent categories on the freedom most quarters.
Justin
September 27, 2012 at 11:10 pm (UTC -4) Link to this comment
I love it when the quarterly categories include gas stations, since that’s one of the main things we put on our cards. A lot of the other categories we just don’t spend money on, like movie theaters and hotels.