The average consumer carries five to seven personal credit cards. Why so many? While one card is probably sufficient for our everyday use, the fact that credit card offers are so readily available these days makes applying for one at times too hard to resist. Especially when immediate rewards are offered in return.
With this in mind, what are the best credit cards? Which should you have in your wallet?
Most credit cards today aren’t strictly purchase cards. More often than not, there’s an added benefit to their use. General rewards credit cards and cash back credit cards both offer their advantages, along with unique disadvantages. Depending on your personal credit habits, one type of card might be better than the other.
That said, with five to seven cards, you’re likely to have one (or a few) of each. Even still, you’ll likely to use one card more than the others. For some cardholders, working towards a specific reward is the motivation, while for others, cash back is the better deal due to its flexibility.
Ultimately, the best credit cards are the ones that work for you, instead of the other way around. Meaning, the card should fit your spending patterns instead of forcing you to spend as you normally wouldn’t - simple to reap benefits.
A good way to assess whether or not a particular credit card is right for you is to fill out a worksheet of questions, each one addressing a particular concern of credit spending. For both rewards and cash back cards, you’ll want to know:
- How are points earned?
- How high is the interest rate?
- Is there an annual or membership fee?
- Is there an expiration date?
- Is it possible to reach the rewards minimum?
- Is there a cap?
- Is it a tiered program?
- How easy is it to redeem points/cash?
There are literally hundreds of credit card offers to consider. In order to narrow down these offers to the best credit cards, it’s definitely a good idea to sit back, do some research, and compare the pros and cons of each.
A tiered program for instance may work for a family or an aggressive spender. With a tiered program, like with the American Express Blue Cash credit card, there’s potential for a high rebate (5% on purchases), but in order to reach it, a tier of $6,500 will need to be spent on the card first. Prior to reaching this plateau, it rebates only 1%.
Yet this is one of the best credit cards out there, only it’s for a specific type of spender. Indeed, what works for a family or business owner likely won’t work for the average consumer. In fact, for consumers, a simple Discover cash-back card may work best. Points accrue throughout the year, with bonus points awarded for “seasonal” category purchases.
Gas cards have also gained more relevance over the past year or so as gas prices continue to climb. Though most of us can’t stop driving, we can try and counter rising prices with some savings.
For some, a general rule is to always choose cash over merchandise, as it provides the cardholder with more purchasing power. Also, with certain rewards credit cards, the APR or interest rate can be so high that any benefit gained is in turn paid to maintain the card. Again, is it worth it?
Ultimately, what constitutes the best credit cards is entirely subjective. It’s simply a matter of finding the right one for you. With Americans carrying an average of five to seven cards overall, it’s safe to say we sometimes take on cards we have only an immediate use for. But in the end, it’s all part of our research, of finding the card that works best for us.
