Top 4 Credit Card Features
Seeing ads for new credit cards and wondering if they may be right for you? Unsure if your current card is providing value? The range of features offered by Credit cards can be confusing and concerning. While many cards offer a reasonable combination of features and costs, it’s important to know what to look for when choosing a card that’s right for you.
Start by considering your spending habits and your goals. If you want to earn cash back, a flat-rate cash back card may be a good option for you. If you travel frequently, a card that offers airline or hotel loyalty program points may be a better choice. To boost your savings for a child’s education expenses, Upromise® cards can be especially helpful. If you are looking for a card with no annual fee, there are many options available, too.
It’s also important to compare different credit cards before you make a decision. There are many factors to consider: Is there a sign-up bonus? What’s the annual fee and the interest rate? Is the rewards program valuable to you?. By comparing different cards, you can find the one that best meets your needs. Let’s take a look at common card types and examples of what they offer.
- Cash back cards are a great way to earn money back on your everyday purchases. Some cards offer a flat rate of cash back, while others offer higher rewards in certain categories, such as gas or groceries. For example, the Chase Freedom Unlimited® card offers 5% cash back on rotating categories, and 1% cash back on all other purchases1.
Airline and Hotel Loyalty Programs
- Many credit cards offer points or miles that can be redeemed for flights or hotel stays. These programs can be a great way to save money on travel, especially if you travel frequently. For example, the American Express® Gold Card offers 4x points on dining and Uber, and 3x points on flights booked directly with airlines or through Amex Travel1.
Grocery and Gasoline Perks
- Some credit cards offer discounts on groceries or gasoline. These perks can save you money on your weekly shopping or on long road trips. For example, the Blue Cash Everyday® Card from American Express offers 3% cash back at U.S. supermarkets on up to $6,000 per year in purchases, 2% cash back at U.S. gas stations and on transit and commuting and 1% cash back on all other purchases1.
Upromise® Credit Cards
- Upromise® credit cards allow you to earn college savings rewards on your everyday purchases. For every dollar you spend with your Upromise® credit card, you’ll earn cash rewards that you can transfer directly into a 529 college savings account1.
Credit card perks and costs can vary widely depending on the card issuer and the type of card. However, some of the most common perks and costs can include:
- Sign-up bonuses: Many cards offer a sign-up bonus, which is a lump sum of points or miles that you can earn after you spend a certain amount of money in the first few months of having the card.
- Rewards program: Many cards offer rewards programs, which allow you to earn points or miles for your purchases. These points or miles can then be redeemed for travel, merchandise, or other rewards.
- Airline miles: Many cards offer airline miles that can be redeemed for flights. Some cards offer a flat rate of miles for all purchases, while others offer higher rewards in certain categories, such as gas or groceries.
- Hotel points: Many cards offer hotel points that can be redeemed for hotel stays. Some cards offer a flat rate of points for all purchases, while others offer higher rewards in certain categories, such as airfare or hotels.
- Discounts: Some cards offer discounts on gas, groceries, or other everyday expenses.
- Airline lounge access: Some cards offer access to airline lounges, which can provide free food, drinks, and Wi-Fi.
- Travel insurance: Some cards offer travel insurance, which can protect you in the event of flight cancellations, lost luggage, or medical emergencies.
- Annual fee: Some credit cards have an annual fee, while others do not. Annual fees can vary depending on the card, so it is important to compare different cards before you decide which one is right for you.
- Interest rate: The interest rate on a credit card is the amount of interest you will pay on any balance that you carry from month to month. It is important to compare interest rates before you choose a credit card, especially if you plan to carry a balance.
- Foreign transaction fees: Some credit cards charge foreign transaction fees, which are fees that are applied to purchases made in foreign currencies. These fees can add up, so it is important to choose a card that does not charge foreign transaction fees if you travel internationally.
1 As of 06/01/2023 – this is not a recommendation for or against any card mentioned.
Jack O’Brien CIMA® is a Certified Investment Management Analyst educated at Chicago Booth School of Busisness and Virginia Tech. EVOadvisers is a fee-only financial advisor based in the Scott’s Addition area of Richmond, Virginia. EVOadvisers also has an office in Irvington, Virginia to better serve clients in the Northern Neck of Virginia. If you have any questions about financial planning and would like to talk with one of our Certified Financial Planner professionals, check us out at www.evoadvisersdev.wpengine.com or call (804)794-1981.