The Search for the Perfect Credit Card: Part 2
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Now that we have narrowed down the options, it’s time to take a closer look at the pro’s and con’s of each of our finalists. For more information on how we started our search for the perfect credit card, see Part 1.
The Discover Open Road Card–This is a very flexible rewards credit card offered by Discover. Basically, it gives you 5% cash back on the first $100 you spend on gas or car maintenance each month. You can also earn between 5%-20% back on purchases from certain participating online retailers. For all other purchases, you earn 1% cash back. You can receive your cash back as pure cash, or you can increase your cash back (even double it) when you redeem it in the form of gift cards from participating merchants. There is no annual fee on this card, and all other fees seem comparable to other cards. The annual APR starts out at 0% until October 2009 and then turns into a variable rate between 10.99% and 18.99% The grace period is at least 25 days. Pros: 1) The rewards program is simple to use, 2) We always spend money on gas each month, 3) We like how we can increase our cash back by redeeming it through gift cards, 4) The extra cash back for certain online purchases is attractive. Cons: 1) The 5% cash back only applies to gas, 2) If we spend more than $100 during a month on gas, we only get the 5% on the first $100 (we usually spend less than $100, though).
The Discover More Card–This card is similar tot eh Discover Open Road card. The only difference is that this card offers the 5% cash back reward in categories that change throughout the year and are not always the same. Last year, the schedule of categories was airlines, cruises, hotels, and car rentals for January-March; home and fashion for April-June; gas and hotels for July-September; and grocery stores, restaurants, and movies for October-December. This year’s schedule seems to be shaping up about the same. Pros: 1) The 5% cash back would apply for us in several of the categories, 2) The 5%-20% cash back for online purchases is attractive, and 3) We like how we can increase our rewards by redeeming them for gift cards. Cons: 1) We may not make purchases in some of the categories during the designated time frames.
The Capital One No Hassle Cash Card–This card is a very simple card that pays 2% cash back on gas and grocery purchases throughout the year and 1% cash back on all other purchase. There is no annual fee on the card, and all other fees seem comparable to other cards. The APR is 0% until February 2010 and then turns into a variable 14.99% . Pros: 1) The rewards program is very simple and easy to keep track of, 2) All rewards are in the form of cash. Cons: 1) Rewards may not pay out as much as other cards.
The Citi Driver’s Edge Mastercard–This is a very interesting card that pays 6% cash back in gas, grocery stores, and drug stores for 12 months and 3% in those categories thereafter. It also pays 1% cash back on all other purchase. You can even earn $0.01 for each mile you drive in your card. Rebates can be applied to the purchase of a new or used car or they can be converted to Thank You points to redeem for gift cards or cash. You can earn up to $1000 in rebates per year. There is no annual fee on the card, and all other fees seem comparable to other cards. The APR is 0% for the first 12 months and then varies between 9.99% and 17.99%. The grace period is at least 20 days. Pros: 1) This card has the potential of a large amount of cash back, 2) Rebates can help you to save up for a new car, 3) There is the additional flexibility of converting your rebates to Thank You points. Cons: 1) Earning your rebates is not as simple as other cards, since you have to mail in your car mileage from authorized service technicians (basically any car shop/mechanic), 2) Converting your rebates to Thank You points can be a hassle since you have to mail in a request, 3) Your rebates often lose value when you covert them to Thank You points (when you convert your rebates, they give you 100 points per dollar. However, when you redeem them, most gift cards require 140 per $1 of value on the gift card).
So, which one should we choose??? We looked at some other cards, such as the American Express Blue Cash card, but we decided we did not spend enough money each year for those cards to benefit us. Remember, we are trying to max out our rewards without getting too frustrated with the process in the meantime. For some info about us, we usually spend about $20 a week on gas and $30 a week on groceries. We fly to Indiana about twice a year and we rarely go shopping for new clothes or other merchandise. Do you have any suggestions for us? Which would you choose if you were in our situation? Or, did we completely miss one we should have considered more? Stay tuned to see our decision!
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I’ve been reading along for a while now. I just wanted to drop you a comment to say keep up the good work.
I’ve been using Chase Freedom for a couple of years now. No fees and blah blah…
The cash back is 3% on grocery, gas, and fast food, 1% on everything else. I have no complaints about their service, but I’ve never needed to use it before.
I suggest staying away from Discover cards, simply because they aren’t accepted as freely as Visa or Mastercard. I’ve always been a Visa guy myself.
I already have a Chase Freedom card, that is why I did not mention that one. We no longer get the 3% on groceries, gas, and fast food. Now we get it on whichever three categories we spend the most on each month (that was the promotion at the time I got it). I like the card a lot, but we wanted a different one for my husband so we can maximize our rewards. Plus, his credit score will go up if we get him one. I definitely recommend Chase Freedom, though.