You may know that I despise credit cards because of how much debt (read: bondage) they suck people into. However, for those that are disciplined, they can be a financially good deal.
How about a card that pays you hundreds of dollars a year in cash? See the Nerd Wallet review of the American Express Preferred Blue card that pays you 6% cash back on all grocery store purchases with a max cash back of $360 per year. You reach that if you spend $500/month on groceries, which most families do.
It also pays you 3% cash back on all gasoline and department store purchases. If you spend $300 a month on gas, that’s another $108/year. And, you get 1% cash back on everything else you buy, plus you get a year of Amazon Prime, which gives you free 2-day shipping and loads of free streaming movies and shows. So, for an annual fee of $69, you get back at least $468 a year in cash, probably quite a bit more.
Caution: While the cash back cards are a great financial deal on paper, they can become a big problem if you wait until the end of the month to pay them and find out you’re short. That will get you into debt in a hurry, which of course is why they offer such a good deal.
To avoid that, the best strategy is to pay them online every week, like every Monday. That’s closer to how you use a debit card and you are unlikely to fall behind. If you suspect you’re not that disciplined, do not get a cash back card.
You may not have thought of getting a hotel chain credit card. You might want to rethink that, even if you only travel on vacation. The best one for budget travelers is the Wyndham card which gives you 5 free nights after your first purchase. There is an annual fee but an annual bonus more than makes up for it. See the long list of hotels in their network like Super 8, Ramada, TraveLodge, Days Inn, Baymont and Microtel.
While you’re at it, join the Wyndam Rewards (click on the Rewards button). It’s free and earns you points when you stay at their hotels. However, make your reservations through Priceline or Expedia (prices are lower). Just give your Wyndham # to the front desk when you check in.
If you prefer higher end hotels like Sheraton and Westin, the Starwoods Guest Card is one of the best because of the great redemption rate
For airline cards, I like the Southwest Airlines Rapid Rewards Southwest has no blackout dates. On their website you pick any flight and just click on Pay with Points instead of Pay with Cash. I love flying SWA – they’re very friendly, don’t rip you off with extra fees and you can check 2 bags free on any domestic flight.
If you are working to get out of credit card debt, you should probably get the Chase Slate Card It has not only the standard 15 months at 0% on balance transfers, but unlike nearly all other cards, it has no transfer fee. The others typically charge 3%, which on a $25,000 balance is $750. It also has no annual fee.