Best Credit Cards

With the exception of when I am in a foreign country and could get charged a 3% foreign currency fee for using it, I make almost ALL of my purchases using a credit card.

Why Do I Choose to Make All of My Purchases with a Credit Card?

There are several important benefits of using a credit card, many of which I have discussed periodically in the posts on this site:

  • Cash-back and rewards for making purchases (my favorite perk!).
  • Free online record keeping of your expenses, which can be downloaded for analysis manually in an Excel spreadsheet format or automatically through a tracking software such as MintManillaSaveUpPersonal Capital (all free).
  • Insurance for purchases. 
    • For example, a lot of credit cards provide complimentary rental car insurance if you pay for the rental with the card.
  • Fraud protection. 
    • If someone steals your information and makes purchases with the credit card, you aren’t liable for paying for the items.
  • Helps me build good credit history. 
  • Saves me the trouble of having to carry around large amounts of cash or change in my wallet/pockets all of the time, which could itself be stolen!
  • Makes me more money.
    • My credit card makes it so I am able to keep the majority of my cash in an interest-bearing savings account, which I then transfer to my checking account to pay off the credit card since the credit card gives me a 20-30 day grace period on payments.


Guidelines for Credit Card Usage

As you’re probably acutely aware, you can get in to trouble VERY fast with credit card debt if you don’t abide by some common good-usage guidelines:

  • Pay your balance ALL the way EACH and EVERY month to prevent being charged interest.
  • Check your credit card statement once a week to make sure there are no un-authorized purchases.
  • Call the credit card company every 6 months to one year and ask for a better interest rate and a higher balance.
  • Notify your credit card company whenever you are taking a long trip or moving to a new location.
    • Otherwise, they might mark the “unusual” behavior as fraud and disable your account!
  • At least once every time you get a new credit card, read through the manual of the card to understand the features, fees, and perks.
    • For example, you want to know if you are charged an annual membership fee, balance transfer fee, late fees, foreign currency purchase fee, etc.
  • Unless you can mathematically prove to yourself that the benefits of membership card are more than the annual fee you have to pay, avoid annual fee credit cards.
    • For example, if you are a frequent airline traveler, the $90 per year fee may be worth it for an airline credit card. However, if you don’t travel that often, it’s likely not going to be worth it.
  • As a general rule of thumb, the best perk/reward for using a credit card is cold, hard, cash-back.
    • Why is this? Simple – because often times, if you have a rewards card that gives you a balance to spend at only one specific store, you’ll likely end up purchasing things that you probably didn’t need in the first place.
  • Shop around and compare credit cards before deciding on a specific card.
    • My favorite place to shop around is because they offer a very clean interface, with a nice left sidebar where you can quickly narrow your search by the specific type of card you want to get (cash back, rewards, travel, 0% balance transfers, etc).