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Picking a credit card

By Janna Herron ·
Thursday, August 9, 2012
Posted: 4 pm ET

Sometimes a credit card blogger needs a new credit card. Here's how I picked a new card and maybe, tucked away in my experience, are tips on how to find one that fits your lifestyle.

About a month and a half ago, my family got a car -- our only car -- to take us from Manhattan where we live to our new weekend home in the Poconos. The car also eliminated our need to take Amtrak to visit our family up and down the upper East Coast. That meant our credit card that earns Amtrak Rewards wasn't as useful to us anymore. So we needed a replacement.

(The plan for the old card is to use it to pay the Netflix bill each month to keep it active. The payment history will help our credit scores and keep our utilization rates low by boosting our available credit.)

So, my husband and I brainstormed: What would be the perfect card? We didn't care about the annual percentage rate, or APR, because we pay off our balances entirely every month. We'd prefer no annual fee, unless the rewards program was good enough to compensate for it.

As for rewards, we spend most of our money on groceries and restaurants, then travel. Points for gas weren't important, since our car gets out maybe once a month. We'd also like to redeem rewards for more than just miles. It'd also be nice to get a sign-up bonus.

I used Bankrate's search for "rewards cards" and "cash back cards" and compared the options. I'm not endorsing any card here (since these options fit my household's criteria), so I'll just describe the two cards left in the running.

The first card offered 3 percent back on gas, 2 percent back on travel and dining and 1 percent back on everything else (no caps), redeemable for cash. Here's the catch: It's a co-branded card with a major retailer, so instead of an annual fee, you have to pay an annual membership fee to be in the retailer's club. That totaled $55 a year. There was no sign-up bonus, either.

We're not a member of this retailer's club, but it could be useful to be a part of it, we thought.

The second card offered 2 percent back on all purchases (no caps) with a $59 annual fee that was waived the first year. It also came with a 10,000-point bonus after spending $1,000 in the first three months. But you could only redeem for miles. Or so I thought.

On closer inspection, it was possible to redeem for all travel expenses (hotels, flights, car rentals etc.) along with cash, gift cards and merchandise. Bingo! This card was best for us, since we’d only lose out on the gas purchases, but that was our smallest spending category.

Signing up was too easy. It took five seconds to get approved for the card. However, I didn't receive the very best APR available, so that means I'll be getting a credit score disclosure in the mail. When I do, I'll share that with you.

How did you pick your credit card?

Follow me on Twitter: @JannaHerron

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August 10, 2012 at 10:28 am

I have the same card. That's the best one for moderate income folks who don't run balances and take at least a few flights per year and have strong credit.