Assuming you’re responsible and organized, always paying off your full statement balance every month, you should be using rewards credit cards exclusively in order to take advantage of the many benefits they offer. Using a boring old debit card is like throwing money away—and if your credit card isn’t giving you points, you might as well stop using it, because the grass really is greener on the other side. Plus, you’re building (hopefully good) credit, which could serve you well with more attractive rates on mortgages, insurance, auto loans, and a lower interest rate if you ever have an emergency and need to run up your credit cards for longer than one month.
Among the cards I regularly use is the Discover It card, from (you guessed it) Discover.
- 5% cash back in rotating categories such as wholesale clubs, restaurants, gas stations, ground transportation up to the quarterly maximum each time you activate.
- All cash back that you earn during your first year of having the card is matched.
- Unlimited 1% cash back on all other purchases.
- No annual fee.
- Your cash back never expires.
- 0% introductory APR for 14 months on purchases and balance transfers.
- After the introductory period, a 11.74%–23.74% standard variable purchase APR applies.
- 3% fee on balance transfers.
One minor caveat is that the 1% back on all purchases isn’t that great—my Chase Freedom Unlimited card provides 1.5% cash back, and there are cards offering as high as a 2%. However, since during your first year of having the card you’ll be getting a cash back match, it’s effectively 2%.