Bill Hardekopf
Bill Hardekopf, CEO of LowCards.com, which helps consumers compare credit cards. He is coauthor of The Credit Card Guidebook. LowCards.com
Credit card issuers have been rolling out an array of attractive incentives to get consumers to choose and use their cards. That’s partly because credit cards still are very profitable for the issuers despite new federal regulations that try to protect consumers from credit card issuers’ worst practices, such as imposing harsh penalties for late payments and jacking interest rates way up. The incentives include cash bonuses of as much as $300 to sign up for cards with rewards programs that offer as much as 5% cash back.
Caution: Many of the best credit card offers are available only to consumers who have very good credit scores. If your credit score is below the mid-700s, your options for a new card will be more limited, but there still are some good ones available.
Today’s best credit card offers…*
While cards that offer rebates of 1% cash back on purchases are common, those that offer much more for many types of purchases are harder to find. Keep in mind that some cash-back cards have higher interest rates, so they may not be appropriate for people who carry balances.
Alternative: Capital One Cash. It offers 1% cash back on all purchases, but there also is an annual bonus equal to 50% of the cash back earned during the year, for the equivalent of 1.5% cash back. Capital One Cash also has been offering new cardholders a $100 cash bonus for spending $500 on the card within three months and a 0% interest rate on purchases and balance transfers until December 2012. 800-410-0020, www.CapitalOne.com.
Downside: You must call Chase or visit its Web site each quarter to activate those 5% rotating category rewards, then remember which are current.
Travel rewards credit cards let cardholders earn airline frequent-flier miles or hotel loyalty program points when they make purchases.
Downside: A steep $95 annual fee, although it’s waived in the first year.
Downside: There’s a $59 annual fee after the first year.
Alternative: Venture Rewards’ sister card, Capital One VentureOne Rewards Visa, has no annual fee and offers 1.25 miles per dollar spent on all purchases.
If you carry a balance on your credit card, low interest rates matter much more than rewards programs.
Downside: If your credit score is below 680, your application probably will be either rejected or approved only for a higher rate.
Lots of cards offer 0% introductory rates on balance transfers these days—but how long does that 0% rate last? And what rate applies when it expires?
Downside: Although the card’s 3% balance transfer fee is at the low end of the 3% to 4% typically charged these days, it still adds up to $300 for every $10,000 transferred. A single late payment could replace your 0% introductory rate with the ongoing interest rate.
Warning: This no-fee balance transfer is a limited-time offer that is not necessarily provided to all who apply for Slate. If you cannot locate the offer on the Chase Web site and you don’t receive an application in the mail offering it, search for “Slate” on my Web site, www.LowCards.com, to apply.
Several credit card issuers have begun marketing attractive new cards to small-business owners.
Consumers whose credit scores are below 680 or whose credit histories are limited still have some reasonable credit card options…
Downside: By law, students younger than 21 must provide proof of income or a co-signer to qualify for a card.
Downside: A $39 annual fee.
*Cards in this article carry no annual fee unless otherwise indicated. Be aware that card features and availability change frequently.
