If you’re like most folks, you use a credit card on a regular basis. You rack up a bunch of charges, get your monthly bill and pay it with money out of your checking account.
What you may not realize — I myself didn’t until recently — that all credit cards are not created equal.
Depending on your lifestyle and what you spend on most, some credit cards are better than others. If you use the right card, you can earn rewards — even put money back in your wallet.
But there are hundreds of cards out there. If you’re not sure where to begin, it can be difficult to select the best card for you.
Today, I’ll walk you through my process when I decided to upgrade my cards. That way you can redirect your spending down a two-way street that allows you to make some money back — rather than the one-way street of just paying a bill each month.
Me, I travel abroad often. Last year after a trip to London, I got my credit card statement and found I’d paid about $100 in annoying little “foreign transaction fees.” While it might not sound like much, that $100 could have bought a nice dinner for two, a month’s worth of Starbucks, two weeks of gas for my car, etc.
I was blown away at how a few dollars here and there really added up. Every time I bought a souvenir, went out to eat, took a sightseeing tour… I lost money.
Truly death by 1,000 cuts.
(I also noticed that when I bought something from an overseas company online — even though I was sitting right here at home — I still had to pay a foreign transaction fee.)
So I started searching for a card that doesn’t charge such fees. Now when I leave the country or shop online, I pull out that card — and keep the fee money in my bank account.
No matter how you spend your money, you can keep more of it in your pocket, earn and use rewards for cool free stuff or even enjoy cash back — all it takes is choosing the right card.
The first thing you have to do is familiarize yourself with the universe of card benefits. These include, but are not limited to…
- Sign-on bonuses
- Flat-rate cash back
- Ordinary (everyday) cash back
- Travel rewards
- Airline points
- No foreign transaction fees
- General rewards
- Balance transfer
- No annual fee
- 0% APR
- Low interest
- Credit status (no, poor, fair, excellent)
- Business perks.
Now, sit back and consider your life. How do you like to spend your time and money? Here are some possibilities to consider…
Do you travel a lot? If you frequently fly domestic, you might want a card that offers you airline lounge access. If you frequently fly overseas, you might want a card that contributes to — or pays for — your Global Entry fee. And if you’re overseas a lot, as I mentioned above, a card with no foreign transaction fees is a must.
If you mostly fly one airline, it might be worth it to get their proprietary card. You could enjoy free miles, upgrades and more to make your travel experience more pleasant.
Do you put your groceries on a credit card — or are you willing to? Some cards give you bonus points or cash back for that.
Do you drive a lot? Certain cards are great for gas rewards.
Do you have balances on other cards you’d like to pay less interest on? There are some great deals for balance transfers.
Do you hate paying an annual fee for the privilege of carrying a card? Simply find one that doesn’t charge an annual fee.
Do you regularly carry a balance? Find a card that doesn’t charge late fees or has a lower APR.
One important thing to know: There is no such thing as “the perfect card.”
The right cards for you is determined by your lifestyle, preferences and needs. No one single card is going to be able to deliver all the benefits you want.
It’s perfectly fine to have more than one credit card. The average American has three, as a matter of fact.
But once you’ve identified and acquired the right combination of cards, you have to actually use them correctly. That means taking a moment to match what you’re about to buy with the right card, rather than just blindly reaching into your wallet and pulling one out.
Please note that credit card offers change all the time. Sometimes there will be a published expiration date. Sometimes the deal runs until the credit card issuer decides to pull it.
For example, in January 2019, Southwest Airlines was offering their free companion pass to new applicants for their branded credit card. I got wind of the deal very recently. In a giddy froth I went to apply (that would have been a year’s worth of free flights for my husband to accompany me anywhere I flew on Southwest!) only to find that the offer had changed.
So if you see an amazing deal, don’t wait to apply.
Here are some links to great card deals:
To your wealth,
Editor-at-large, Unconventional Wealth
Steffi Baker is the editor-at-large of Unconventional Wealth. For the past 10 years, she worked with a small strategy consulting firm that dealt exclusively with wealth-management companies, helping them market themselves to ultra-high-net-worth clients.
Through this line of work, Steffi attended events in London and New York and hobnobbed with household names and international...