Credit Card Update

Last year I wrote an article about how great credit cards are for responsible people because of the reward programs associated with them. Since then, the credit crisis happened, a bill with consumer protections was put through Congress, and the credit card companies reduced the amount of rewards that they pay out. So, what does this mean for credit card reward connoisseurs and everyone else?

Consumer Protections

Several consumer protections have been put into the bill to stop credit card companies from preying on people. They will no longer be able to do things like raise your credit card interest rate because you miss a payment on an unrelated gas bill, people under 21 will need a cosigner, and double cycle billing (just plain evil) is outlawed. Hooray!

The New Reward Cards

The new reward programs have been scaled back a bit, but they still offer some decent benefits. One of the new cash back cards still offers a $50 sign-up bonus, but the 3-5% rewards are only offered in select categories that change quarterly on both the Chase Freedom^SM and Discover® More^SM Card. Here are details for 2 of the best reward programs and all the information that I found in the tricky the fine print section.

$50 Sign-up Bonus Chase FreedomSM is offering a $50 bonus for getting their card, 2% cash back on airfare booked through their site, a 3% bonus in categories that change quarterly, and 1% on everything else. Shopping Bonus You can also get up to a 20% bonus with their online shopping offers, but they are typically less. You can save 6% at Target, 4% at Marriott, 4% at Home Depot, etc. This is significant and there is a good selection of merchants to choose from. Other Ways to Get Rewards One thing to keep in mind is that you need to enroll quarterly in order to stay eligible for the bonus category discounts. Chase FreedomSM offers lots of ways to earn extra rewards and 3% is still one of highest out there. The $50 sign-up bonus also helps and 2% cash back on airfare isn’t bad if you travel frequently (see travel rewards for good travel cards).

Great Card for Planners The Discover® MoreSM Card is a great card for meticulous planners and offers a 5% bonus in categories that change quarterly. It has the disadvantage of offering only a 0.25% reward on your first $3,000 in non-bonus category purchases before it kicks up to a full 1% and it stays at 0.25% for purchases at places like Sam’s Club and Costco. Aside from that it is a great card! 5% Rewards You can get a huge 5% reward in their quarterly categories. For instance, purchases made from January to March give you a 5% reward on airfare, hotels, cruises, and car rentals so make you travel plans during that time frame. April through June gives you a reward at home and fashion stores. If you plan your purchases carefully then this card can work out great for you. Extra Bonus Rewards Discover also has an online shopping network that gives you a 5-20% discount on products and if you redeem your reward points for gift cards you can get even “more” for your money. A 5% reward is great, but what makes the Discover® MoreSM Card even better is the additional gift card bonus that is sponsored by 100+ merchants like Bed Bath and Beyond, Borders, and Gap!

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