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What are the best credit cards if you pay off your bill every month? Which ones do you get the best benefits on? I currently have a Charles Schwab Visa where I get 2% cash back on everything. I also have a Discover Card where I get 1% cash back plus various other benefits.

Is it better to get cashback, miles, or some other benefit?

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    Instead of asking about specific companies' cards, this question should instead ask about card types -- e.g. cash back yes/no, interest rates, annual fees etc. Otherwise, it will quickly become out of date.
    – Ether
    Aug 4, 2010 at 20:51

6 Answers 6

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BillShrink.com lets you compare credit cards based on all your specifics (miles vs. cash, where you shop the most, etc) and tells you what the best card is for your specific habits.

MOD EDIT Looks like billshrink.com is shut down. From their site:

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The answer for this question varies from person to person. However most cards give lousy rewards percentage-wise. Take a look at where your money is being spent each month (say with a tool like mint.com), and seek out a card that rewards you in categories where you already spend a lot of money.

Many people here have suggested cards with high gas rebates, and that's great if you drive more than anything else. However, the important thing is to pick what benefits you most.

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I'm not going to recommend a specific card. New card offers pop up all the time. My answer would be out of date in a month!

As a general rule, if you pay off your balance every month, you should be looking at a cash-back or a rewards card.

  • Cash-back cards will give you some money (say 1%) of every dollar you spend. Some will give you larger amounts of cash-back for certain types of spending (e.g. groceries).

  • With a Rewards card, you usually get "points" or "airline miles", which can be redeemed for merchandise, flights around the wold, concert tickets, etc.

With these types of cards, it makes sense to do as much of your spending as possible with the cards, so you can maximize the benefits.

Which specific card is best will depend on your shopping habits, and which bank is offering the best deal that week. I recommend you start at http://www.creditcards.com to compare card offerings. For cash-back cards, you can also go to http://www.creditcardtuneup.com, enter some details of your spending, and see which one will give you the most cash back.

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PenFed Platinum Cashback Rewards Visa Card is another good choice.

Pros:

  1. 5% back for gas; 2% back for groceries; 1% for everything else.
  2. You get cash back credit at the end of each statement cycle.
  3. If you have an account with PenFed, their loan programs are excellent too.

Cons:

  1. You have to have a bank account at PenFed first. To join you have to meet certain conditions.
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The answer today is the Fidelity Rewards Amex. This card pays the highest cash back (2%) on ALL purchases.

The answer gets more complicated if you like miles, or you want to use one card for groceries and gas and another for restaurants, etc. But the Fidelity Amex gives you 2% on everything you purchase, automatically deposited into your Fidelity account as cash (no coupons to rip off, or checks to deposit).

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For people who are already a Costco member. The American Express TrueEarnings Business Card is a good choice.

Note: If you don't own a business, just use your name as the business. The business card is better than the regular TrueEarnings card.

Pros:

  • 4% for gasoline; 3% for restaurants; 2% for travel; 1% for elsewhere including Costco.
  • You Costco membership barcode will be printed on the back of the card, so you can leave your Costco membership card at home.
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  • Business cards did not get the same protections as consumer cards in the financial and credit reforms passed by the US congress this year. Check what those protections are to see if they matter to you, and don't miss a payment on a card like this.
    – SpecKK
    Sep 15, 2010 at 0:09

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