Should you get a new card for the holidays? It depends on your overall credit-worthiness, how much debt you’re carrying and when the last time was the you applied for a credit card. Every time you apply for a credit of any kind, it impacts your FICO score; negatively. (More on that in a future blog post.) You might be better off asking a current credit card for an increase in credit line, yet ask them if they will access your credit report, and thus also negatively ding your FICO.
Going for a new card?
Who are you – do you pay your balances off every month, or do you pay when you can? I ask this because being heavily advertised right now are the money back credit cards. They look like “found money”, but be careful. These cards work best for those of us who pay our monthly balance off every single month. If that’s not you, then you should be looking for cards with the lowest interest rate.
I recommend that you create a little matrix for yourself. Line up all of your credit cards and determine which cards will give you cash back and in which purchasing categories. Because what I’ve seen in my research is that some kinds of credit cards will give you 5% back on retail one month, say, and others will offer double cash back on restaurants this month. So, if you’re shopping a lot in one “sector”, you want to pick the card that fits.
If you are going to apply for a new card, perhaps the most under rated card out there is the Discover More Card which gives a $100 cashback bonus (provided you spend $500 during the 1st three months) plus 5% rebates or more on a ton of purchase categories!
Also worthy of consideration is the Chase FreedomVisa which gives you a $100 bonus cash back, provided you spend a certain amount, like $799 in the first three months. The good part is if we’re looking at this now we’ll probably be spending the requisite amount of these various cards over the next three months. Bank Americard Cash Rewards Visa Signature card gives us a $50 statement credit immediately and then a $25 bonus for all cash reward redemptions. Also, check out Capital One – they in fact give 2% cash back on gas and groceries and 1% on all other purchases.
Another highly rated option is the Citi Dividend Platinum Select MasterCard. And then there’s something called True Earnings Card from Costco and American Express that in fact gives you extra rebates on gasoline, dining, and travel in addition to the discounts that it gives you for shopping at Costco.
As you see there are some great choices. For a full list of cash back cards, (with reviews and customer testimonials) you can look at http://www.credit.com/credit-cards/Cash-Back. Actually, http://www.credit.com can lead you through a process to select the card that’s right for you.
If they want you to shop at their “online shopping mall” watch out for shipping fees. Maybe see if they’re participating in the December 17th Free Shipping Day promotion. (http://www.freeshippingday.com).