I am looking to get a good credit card for rewards purposes. I really don't want to pay an annual fee, but I don't care what the interest rate is, as I will be paying it off each month. My husband and I enjoy travel, so a flight miles card would be nice, but not necessary. Gas and groceries would work just as well. Does anyone have any suggestions, or cards they really love?
Getting free flights and hotel stays via credit cards sounds intriguing, but make sure you do the math. A couple of thoughts:
The really big bonus is only the sign-up bonus. Beyond that they average between one and two miles per dollar spent. With rooms and flights costing 20,000 to 150,000 miles (depending on airline, destination and class of travel), you have to spend a similar amount in dollars. That means you probably need to save a few years for a single flight.
Keep in mind that airlines miles are also subject to inflation, strict inventory control and sometimes expiration rules. You might save for years only to find out that your miles expired or there's no flight available during the time you want to fly. Unless you fly for business or can spend someone else's money (business expenses, for instance), a single credit card is not the best way to obtain a free flight.
Collecting miles without spending too much requires constantly signing up for new credit cards to get the sign up bonuses and employing strategies that sometimes are borderline. Eg. using a credit card to buy a gift card at an office store (5% office supply cash back) to order ten thousands of one dollar coins from MINT, just to return those to a different bank and pay off the first credit card's balance. That was the big game played two years ago.
Once you are in this game (and it's just that, a game), it becomes hard to see alternatives, because you are on a constant hunt to collect miles and juggle with accounts. There are other options, that might get an even better return than credit cards, such as:
- ask for a rebate for paying cash. In many cases cash is cheaper for the merchant than a credit card. Therefore they might be willing to share their saving with you if you ask.
- for online shopping check out cash back portals. I'm not familiar with US cash back portals, but in the UK the leading one is quidco.com. In Germany qipu.de would be the corresponding portal. Cash back is often in the range of 4-10% and almost always higher than the credit card company cash back. Of course, you can also combine a credit card with a portal.
- Many shops offer affiliate links. If there's a particular online shop that you shop frequently that has an affiliate program you might sign up as an affiliate partner yourself and then use your own link.
Never forget: If there's room for any sort of reward, rebate or cash back, the asking price was already too high to begin with.