Saturday, October 1, 2011

Credit Card Overview


I thought I'd go through a quick list of my credit cards, the pros and cons I have found with each one, and what their purpose is for my spending habits.

Discover Student More (Discover)
Pros: 5% cash back in rotating categories, bonus when redeeming rewards (can exchange $20/$45 in rewards for certain $25/$50 gift cards respectively), Online spend analyzer to look at where your expenses are going on your discover card, extra bonus cashback for online shopping
Cons: Limited acceptance, only 0.25% cash back on first $3000 of annual spending outside of rotating categories, fairly low limits for 5% cash back (i.e. I only get 5% cash back on the first $300 of spending for gas, hotels, airlines for the past quarter)
Purpose: The first card I use if I am buying something in a 5% cash back category and the place accepts Discover; the low yield outside of the 5% cash back makes this a very focused card on whatever category is available that quarter for me.

Citi Student Forward (Visa)
Pros: High credit limit, easy bonus points for paying on time
Cons: Thank you point rewards system (yield is extremely low when calculated)
Purpose: I never used this card after the first few months when I got a bunch of bonus points; I don't know why they gave me such a high credit limit, but I just use it for plane tickets to Hong Kong since none of my other cards have enough credit to cover a ticket.  Basically, the yield for this card is less than 1% if you try to get anything on the Thank You Points website.

Capital One No Hassle Rewards (Visa)
Pros: 2% cash back dining/entertainment/book stores all year round
Cons: limited yield (either 2% in those categories or 1% everything else)
Purpose: If dining or entertainment isn't in a 5% rotating category for another card, I use Capital One for the slightly higher than normal cash back which is convenient since it is all year round.  However, this card is definitely the lowest yielding out of all my cards that I regularly use.

Chase Freedom (Visa)
Pros: 5% cash back in rotating categories, fairly high limits on spending to earn extra cash back
Cons: Low yield outside of 5% rotating categories
Purpose:  Chase Freedom is one of my favorites since it has a practically universal acceptance rate with Visa and I can always get 5% back on whatever categories are available that quarter (the limits are high enough so I don't hit them).  I basically use Chase as often as I can if I can't get higher than a 1% yield on any other card.

American Express Blue Cash Everyday (American Express)
Pros: 3% cash back groceries and 2% cash back department stores/gas all year round
Cons: Limited acceptance rate
Purpose: I use my AmEx mainly on groceries when it isn't in a 5% rotating category in Chase or Discover.  the 3% cash back all year round is really nice since I'll always need food to eat and I prefer to make my own food rather than eat out.  The acceptance at grocery stores isn't a big problem so the con is very limited.

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