Aspiration has discontinued the Aspiration Zero credit card and will be closing accounts on May 3, 2023. For more information, click here.
Terms apply to American Express benefits and offers. Visit americanexpress.com to learn more.
There are hundreds of credit cards out there offering a myriad of perks and benefits, including the ability to earn travel rewards or cash back for the purchases you're making already.
If you're thinking of upgrading your current credit card to new one that'll provide more of a bang for your buck, financial advisor and Select contributor Kristin O'Keeffe Merrick shared some pointers on the do's and don'ts of choosing (and managing) a credit card with NBC's "TODAY" that are definitely worth considering.
Check out the full interview in the video below and read on to see some of her best tips.
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1) Use your credit card responsibly
While getting a new credit card can be exciting, it's important to remember that credit is borrowed money — and borrowed money comes at a cost. Issuers charge interest on your balance if you don't pay it off in-full each month.
In her interview, O'Keeffe Merrick cites that a credit card APR's can be as high as 25%, and this can make your total debt add up quickly if you're unable to pay off your balance each month. And if you make a late payment or forget to pay your bill altogether, you can rack up late fees and wind up damaging your credit score.
While you should make it a habit to only use a credit card for charges you can pay off immediately, if you do find yourself carrying a balance, you could try calling your credit card issuer to ask for a lower APR. This could help you save some money since more of your payments will go toward your balance instead of just the interest. Alternatively you could transfer your balance to a card with 0% introductory APR period and use that time to save money on interest charges while you pay off the balance.
Select ranked the Citi Simplicity® Card and the U.S. Bank Visa® Platinum Card as some of the best credit cards with intro APR periods.
The Citi Simplicity® Card has amazing intro-APR offers and is particularly valuable for balance transfers due to its lower introductory fee.
- Long intro APR offers for balance transfers
- Low intro-fee for balance transfers
- No annual fee
- No rewards
- No welcome bonus
- Best-in-class intro-APR offers for purchases and balance transfers
- No rewards
- No welcome bonus
Information about the U.S. Bank Visa® Platinum Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.
Because most balance transfer cards do come with a small balance transfer fee, you'll need to do the math to make sure the money you save on interest will outweigh the fees.
2) Consider whether the annual fee is worth it for you
For starters, if you're interested in getting a credit card that offers a lot of perks and a strong rewards program, you'll typically have to pay a larger annual fee. Card issuers charge annual fees to help them offset the cost of offering cardholders numerous features and benefits. So it makes sense that the more perks and benefits being offered, the higher your annual fee may be.
For instance, the Citi Double Cash® Card has no annual fee and offers 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. To earn cash back, pay at least the minimum due on time. Plus, earn 5% total cash back on hotel, car rentals and attractions booked with Citi Travel. New cardholders can earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back. The American Express® Gold Card, on the other hand, comes with a $325 annual fee (see rates and fees), but cardholders may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership*. And in addition to 4X Membership Rewards® points earned at restaurants worldwide (on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year) and 3X points on flights booked directly with airlines or on AmexTravel.com, the Amex Travel App™, or purchased directly from airlines. Cardholders can take advantage of $120 ($10 per month) in annual dining credits and up to $120 ($10 per month) in annual Uber Cash. To receive this benefit, you must have downloaded the latest version of the Uber App and your eligible American Express Gold Card must be a method of payment in your Uber account. The Amex Benefit may only be used in the United States. Point caps and terms apply.
What makes the Citi Double Cash® Card special is that it sits near the top of its class in several categories. It is an excellent option if you want flat-rate rewards, a balance transfer intro-APR or no annual fee.
- Balance transfers get a long intro APR
- Generous flat-rate cash-back rewards structure
- Earns transferable rewards
- No annual fee
- It has a foreign transaction fee
- Intro APR only applies to balance transfer
- Points transfer ratios are reduced compared to premium cards
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back.
- Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. To earn cash back, pay at least the minimum due on time. Plus, earn 5% total cash back on hotel, car rentals and attractions booked with Citi Travel.
- Balance Transfer Only Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 18.24% - 28.49%, based on your creditworthiness.
- Balance Transfers do not earn cash back. Intro APR does not apply to purchases.
- If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
- There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).
Balance transfer fee
There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. A balance transfer fee of 5% of each transfer ($5 minimum) applies if completed after 4 months of account opening.
Foreign transaction fee
3%
The American Express Gold Card is great for earning valuable Membership Rewards® points at restaurants worldwide and U.S. supermarkets. Membership Rewards® points transfer to many of the top airline and hotel loyalty programs, which makes this card one of the best options for earning travel rewards.
- You can earn $400+ in dining and rideshare credits every year (Enrollment required for select benefits mentioned)
- Exceptionally rewarding for eligible restaurant and U.S. supermarket purchases
- No foreign transaction fees
- Large annual fee
- Credits are more complicated, you earn them monthly or semi-annually
- Spending caps on the top bonus categories
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you're approved and find out your exact welcome offer amount – all with no credit score impact. If you're approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App™.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App™, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App™ and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You'll know upfront exactly how much you'll pay.
- $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That's up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- Enjoy complimentary Hertz Five Star® Status benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Book two nights or more with The Hotel Collection through AmexTravel.com and receive a $100* credit towards eligible charges at over 1,300 upscale hotels worldwide.§ *Eligible charges vary by property.
- Book your travel through the Amex Travel App™ with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.
- See Rates & Fees
Foreign transaction fee
None
“Almost every card has an annual fee associated with it," O'Keeffe Merrick says. "Some of them can be as high as $500, which can be a lot of money unless you’re using the card right.”
If you decide to go with a credit card that has a heftier annual fee, make sure the card is offering perks you're actually going to use. Because while perks like annual statement credit feel "free," you're technically paying for them through the annual fee.
3) Make sure your travel credit card fits your needs
There are many perks that can be offered through travel credit cards besides just a welcome bonus that can potentially be redeemed for no-cost flights and hotel stays. O'Keeffe Merrick suggests considering airline-specific credit cards based on the airline you fly with the most, or based on the airline that has a hub at the airport you typically use. This way, you know you'll be using the card's perks — like free lounge access and a free checked bag — to the fullest extent while you travel.
Furthermore, if you don't travel by plane often or don't even have a specific airline you choose frequently, an airline-specific credit card may not be right for you.
O'Keeffe Merrick also points out that some rewards cards allow you to use your points toward your hotel, car rental and other transportation needs while you're traveling. Or, they just automatically include certain travel protections. The Chase Sapphire Preferred® Card (see rates and fees) includes an auto rental collision damage waiver, baggage delay insurance and trip delay reimbursement, so you won't have to pay extra for these add-ons.
The Chase Sapphire Preferred® Card packs a punch for a $95 annual fee card, offering annual travel credits, comprehensive travel protections, flexible rewards and more.
- You can transfer rewards to all of Chase's travel partners including World of Hyatt, Southwest Rapid Rewards and many more
- Long list of travel and shopping protections
- Annual Chase Travel hotel credit
- Has an annual fee
- Requires a high credit score
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Earn 75,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening.
- Enjoy benefits such as 5x on travel purchased through Chase TravelSM, 3x on dining, 3x on vacation homes, 3x on gas & EV charging, 3x on top streaming services and online groceries (excluding Walmart, Target, and wholesale clubs), 2x on all other travel purchases, 1x on all other purchases
- Earn up to $100 in statement credits each account anniversary year for hotel stays through Chase Travel
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Emergency Evacuation and Transportation and more
- Get a year of complimentary Apple TV when activated by December 31, 2026 - a value of $156.
- Complimentary DashPass which unlocks $0 delivery fees & lower service fees for 12 months when you activate by 12/31/27. Plus, a $10 promo each month on non-restaurant orders.
- Receive one statement credit of up to $120 every four years as reimbursement for the application fee charged to your card for a Global Entry, TSA Precheck® or NEXUS application.
- Transfer points to leading airline and hotel loyalty programs
- Member FDIC
Balance transfer fee
Either $5 or 5% of the amount of each transfer, whichever is greater
4) Think about some services you already use that could be offered as a perk through a credit card
Aside from welcome bonuses and rewards points, many credit cards offer lots of little perks on things like streaming services, ride share credits and gym membership credits that may also fit your needs and make any annual fee you pay well worth it.
The Blue Cash Preferred® Card from American Express, for example, offers 6% cash back on select streaming services, including Netflix, Hulu, Spotify, Apple Music, Disney+ and Prime Video. So if you're already subscribed to many of these services, you can now get rewarded for it and earn some sweet cash back. The card is also offering the Disney Bundle which can include Disney+, Hulu, and ESPN with up to $10/month back in the form of a statement credit after you purchase an eligible subscription, including a bundle subscription (subject to auto renewal) with your Blue Cash Preferred Card. Enrollment required.
The Blue Cash Preferred® Card from American Express is a low-fee card with generous cash-back rewards and useful ongoing benefits, such as a monthly Disney Bundle credit. (Enrollment required for select benefits mentioned)
- High cash-back earnings for U.S. supermarkets and streaming services
- Intro-APR offer for purchases and balance transfers
- No annual fee for the first year
- It's less rewarding after the first year because of the annual fee
- Bonus rewards for U.S. supermarkets are capped
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Apply and find out your welcome offer. As High As $300 cash back* after you spend $3,000 in purchases on your new Card within the first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply, and if approved: 1. Find out your offer amount 2. Accept the Card with your offer 3. Spend $3,000 in 6 months 4. Receive the cash back. *Cash back is received in the form of Reward Dollars that can be redeemed for a statement credit or at Amazon.com checkout.
- $0 intro annual fee for the first year, then $95.
- Enjoy 0% intro APR on purchases and balance transfers for 12 months from the date of account opening. After that, your APR will be a variable APR of 19.49%-28.49%.
- Plan It®: Buy now, pay later with Plan It. Split purchases of $100 or more into equal monthly installments with a fixed fee so you don't have the pressure of paying all at once. Simply select the purchase in your online account or the American Express® App to see your plan options. Plus, you'll still earn rewards on purchases the way you usually do.
- Earn 6% cash back at U.S. supermarkets on up to $6,000 per year in eligible purchases (then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at eligible U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses and more) purchases and 1% cash back on other purchases. Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit and at Amazon.com checkout.
- Get up to a $10 monthly statement credit after using your enrolled Blue Cash Preferred® Card for a subscription purchase, including a bundle subscription purchase, at DisneyPlus.com, Hulu.com, or Stream.ESPN.com U.S. websites. Subject to auto-renewal.
- Terms Apply.
- See Rates & Fees
Balance transfer fee
Either $5 or 3% of the amount of each transfer, whichever is greater.
Foreign transaction fee
2.7% of each transaction after conversion to US dollars
And if you want a card that does good for the causes you care about, there are now credit cards that can fit your philanthropy. As an example, every purchase made with the Aspiration Zero Card results in the planting of a tree.
At the end of the day, though, you shouldn't be drastically changing your lifestyle in order to keep up with the perks of your credit card.
“They need to be used in a way where they adapt to your life," O'Keeffe Merrick says. "If you don't travel, then a travel card is not for you."
Bottom line
When you're finally ready to make the move and upgrade from your current credit card, considering all the perks and benefits you'll receive can be very exciting. Just make sure you're also thinking about your personal needs and interests and weighing whether or not it's worth it for you to pay an annual fee.
O'Keeffe Merrick also says to keep in mind that borrowed money isn't free. That being said, the healthiest way to use a credit card is to make a purchase and pay it off immediately so you can still get in on the perks without having to pay any additional interest.
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Read more
For rates and fees of American Express Gold card, click here.
For rates and fees of the Blue Cash Preferred card, click here.
*The American Express® Gold Card Welcome Offer: To view your personalized offer, you must first submit an application. If approved, you will: (1) receive your Welcome Offer details, (2) have the option to accept the Card with that offer, (3) be required to spend $8,000 on eligible purchases within the first 6 months of Card Membership, and (4) earn Membership Rewards® points. Welcome offers vary and you may not be eligible for an offer.
* Information about the U.S. Bank Visa® Platinum Card has been collected independently by CNBC Select and has not been reviewed or provided by the issuer of the card prior to publication.
