Choosing the right credit card can be daunting, given the sheer number of options, ways to earn and rewards programs. But by identifying your priorities, you can narrow that list down. If you’ve already got a card, picking up a new one could mean cashing in on purchases you already make.
First, think about your goal: Do you want cash back? Do you travel a lot on one airline? Do you want to use points for a trip you wouldn't normally pay for? All of these are important, since you don't want to change your spending habits just because you've got a shiny new card. Let's look at a few.
You want to not think and just get cash back: Citi Double Cash
Other cards get more back in certain categories, but this is the most no-thinking-involved card you can have if you only get one. The Citi Double Cash earns 2% cash back on all purchases — think of it like getting a 2% discount on everything you buy. You simply redeem for statement credits, and don't have to think any further than that. Two cents per point is really the benchmark for all other cards; if you're not getting that much back on your redemption (divide the dollar value by the number of points you redeem), you're better off just using the Double Cash.
You cook at home and drive everywhere: American Express Blue Cash Preferred
This card gets you 6% cash back on up to $6,000 spent at grocery stores; after that, it's just 1%. But it also gets 3% at gas stations and select department stores, from Kohl's to Neiman Marcus, with no set limit. Those big cash-back percentages don't apply at Wal-Mart, Target or discount clubs, but if you spend more than $1,500 on groceries in a year, the card already pays for its $95 annual fee — and that's not even considering the unlimited 3% back at gas stations and department stores, or the great extended warranty benefits of an AmEx.
You spend all your money on dining out and travel: Chase Sapphire Reserve
The Sapphire Reserve's $450 annual fee sounds steep, but it quickly pays for itself. First, you get a $300 credit every year toward travel, so if you book plane tickets or a hotel, that effectively cuts the fee to $150. You also get a $100 Global Entry/TSA Precheck credit that's good for five years, and lounge access with unlimited guests. Every time you fly, instead of waiting in lines and eating at Cinnabon, you'll zip through security and sip on an adult beverage for free.
The real kicker comes through the Sapphire Reserve's point accrual and partner transfers; you earn 3x points on dining and travel (taxis count, too!). While Chase offers a 50% bonus to redeem points for travel through its travel portal, instead transfer out to airline partners like Singapore Airlines. You could be flying in a private suite to Asia for just 120,000 points — and with a 50,000-point signup bonus, you'll get there pretty quick. Once you're there, there's no foreign transaction fee, either, which will save you a bundle depending on your spending.
You love planning and "deals": Discover it Card or Chase Freedom
Both of these no-fee cards offer rotating quarterly categories where you earn 5% back. For example, Discover it earns 5% back at restaurants from July through September, when you're enjoying the height of summer, and 5% on Amazon and Target purchases from October through December, when you're stocking up for the holidays. Plan wisely, and you cash in — without having to pay a dime for the trouble.
You need to tackle your current credit card debt: Chase Slate
Maybe you went a little too crazy on gifts last Christmas, or you ended up spending a lot more on that vacation to Santorini than you'd planned. It's OK. Rather than staying in that hole, transfer your high-interest debt to the Chase Slate card, with a $0 transfer fee and 0% APR for the first 15 months on your balance transfers and purchases. Stay after it, and you could be debt-free in no time.
One last thing to consider: If you fly a lot with one airline, consider getting that airline's credit card. For example, having one of American Airlines' co-branded cards will let you check a bag for free — that's normally $25 each way, so the savings can really pile up.