BEST CARD FOR DAILY USE
If you’re planning to use your card to cover daily expenses such as gas, groceries and general shopping, then a rewards card that offers discounts at certain retailers or cashback on purchases could be a good investment. Just be sure you’re not spending more than you can afford or carrying a large balance on your card, which ends up losing you money in interest paid back to the credit card company.
Pro tip: Using your credit card for daily expenses can be a great strategy to build good credit, but you must pay off your balance in full each month. If you carry a balance, the APR on rewards cards can be very high. If you pay off your balance each month and get the rewards, then you’re winning!
BEST CARD FOR TRAVEL
It might seem like when you get a travel rewards card you’re suddenly whisked away to circle the globe, but if you’re not already spending money on travel, the rewards can be hard to cash in and the cards can be expensive to own.
Most travel rewards cards have annual fees that you must pay even if you don’t use the card. The better the rewards, the higher the fees. In order to find out if a travel card is worth the cost, ask:
- How hard is it to cash in rewards? Are there blackout dates for travel? Spending caps? Limited availability? Loyalty tier programs? If the travel rewards are too hard to use, then you might be better off with a cashback card.
- When do you start earning rewards? Do you have to spend a certain minimum amount before rewards kick in? Do the rewards expire?