Here is my situation, I think it will help a lot of other young people here:
I'm a senior in college (age 21) and I have been using a Bank of America Student Card for ~5 years. I have built up great credit, and I think I'm overdue to enter the world of reward based credit cards. I am not intending to carry any balance from month to month, so I will consider APR/interest rates pretty much irrelevant for this post. (For those that might not know: All of that APR bullshit only applies if you don't pay all of your balance each month. If you can't afford to pay it all, you can make the "minimum payment" on what you owe that month, and pay interest on the difference. Note, that compiling credit card debt in this fashion is how people screw themselves over. Pay it all on time, and credit cards will be your best friends with benefits
.)
Here's what I have learned so far:
The choices below are the two best choices for people in my situation, namely they want maximum cash back benefits, but are not very concerned with travel benefits.
The Discover More Card
Positives: No Annual Fee. There are rotating categories of 5% cash back on things like Gas, Restaurants, Movies, etc. In addition the card gives 5%-20% cash back on extensive list (~150) of online retailers. Some of interest to this forum would be like Brookes Brothers 5%, Saks Fifth Ave 5%, Armani Exchange 5%, Bannana Republic 5%, Puma 10%, Ralph Lauren 5%, 7 for all mankind 5%, Jos A Bank 5%, and many many more (JK on Jos A Bank being liked here, but its still 5% off
). In addition, you can more than double cash back by converting it to gift cards at a smaller, but still significant list of venues. To sweeten this even further, Discover is offering a $75 rebate if you spend $500 in 3 months for new card members.
Negatives: Discover is less widely accepted than Visa/Mastercard. You have to re-sign up for the rotating rewards program each quarter to participate (but points never expire, and I'm pretty sure this doesn't apply to the online merchant 5%-20% off program). Baseline cashback on all purchases before hitting 3k total spending is 0.25%. There is a 2% fee on purchases made outside of the US.
Summary: Very Nice!!! Lets see what Chase has to offer.
Decent Summary (with merchant list):
http://www.askmrcreditcard.com/disco...tinumcard.html
The Chase Freedom Visa/Mastercard
Positives: This is Chase's competitor to the Discover More Card. It's accepted at more locations than the Discover More Card (Not sure how important this is yet). It has many of the same perks, but no additional ones. Chase offers more online merchants places with cash off greater than 1% than Discover, but the % off tends to be 5% or less (Where Discover is 5% minimum), with almost none exceeding 10%. Yoox is 5% off, Brookes Brothers is 2%, Banana Republic is 4%, J. Crew is 2%, Ralph Lauren is 3%, Saks Fifth is 5%, etc.
Negatives: Does not offer the feature to convert points to gift cards which can more than double their value at certain locations.
Summary: Overall, the discounts and cash backs are excellent, and the baseline cash back is greater than what Discover offers. Unfortunately, the difference between 0.25% and 1% on general cash back b/w the discover and chase cards is not very significant, because this is not the true value prop of these cards (which is discounts in the 5-20% range). If you are spending enough for the 0.75% margin to matter, you'd do better with a card out of this spending range.
Decent Summary (With Merchant List):
http://www.askmrcreditcard.com/chasefreedomcard.html
Current winner for me is the Discover More card
While Chase offers a much larger selection of merchants, I don't think it will pay off for me. With the beginning of the semester approaching I will definitely spend $500 in the next 3 months (Books, Booze, and other personal rewards for finishing the MCAT). The $75 translates to 15% back on that $500. I am also not frugal enough in my spending to consider 0.75% a worthwhile advantage for baseline returns with Chase (The next $10 impulse buy I make will more than negate the extra 0.75% from $1000 spent on the chase card). The best long term option is to get both and use whichever has the best deal going for each individual purchase, but I'm not going there (Yet).
So those are my thoughts, and I'll probably apply for the Discover card this afternoon. If anyone has anything to add, I'd love to hear it.
I'm a senior in college (age 21) and I have been using a Bank of America Student Card for ~5 years. I have built up great credit, and I think I'm overdue to enter the world of reward based credit cards. I am not intending to carry any balance from month to month, so I will consider APR/interest rates pretty much irrelevant for this post. (For those that might not know: All of that APR bullshit only applies if you don't pay all of your balance each month. If you can't afford to pay it all, you can make the "minimum payment" on what you owe that month, and pay interest on the difference. Note, that compiling credit card debt in this fashion is how people screw themselves over. Pay it all on time, and credit cards will be your best friends with benefits
.)Here's what I have learned so far:
The choices below are the two best choices for people in my situation, namely they want maximum cash back benefits, but are not very concerned with travel benefits.
The Discover More Card
Positives: No Annual Fee. There are rotating categories of 5% cash back on things like Gas, Restaurants, Movies, etc. In addition the card gives 5%-20% cash back on extensive list (~150) of online retailers. Some of interest to this forum would be like Brookes Brothers 5%, Saks Fifth Ave 5%, Armani Exchange 5%, Bannana Republic 5%, Puma 10%, Ralph Lauren 5%, 7 for all mankind 5%, Jos A Bank 5%, and many many more (JK on Jos A Bank being liked here, but its still 5% off
). In addition, you can more than double cash back by converting it to gift cards at a smaller, but still significant list of venues. To sweeten this even further, Discover is offering a $75 rebate if you spend $500 in 3 months for new card members.Negatives: Discover is less widely accepted than Visa/Mastercard. You have to re-sign up for the rotating rewards program each quarter to participate (but points never expire, and I'm pretty sure this doesn't apply to the online merchant 5%-20% off program). Baseline cashback on all purchases before hitting 3k total spending is 0.25%. There is a 2% fee on purchases made outside of the US.
Summary: Very Nice!!! Lets see what Chase has to offer.
Decent Summary (with merchant list):
http://www.askmrcreditcard.com/disco...tinumcard.html
The Chase Freedom Visa/Mastercard
Positives: This is Chase's competitor to the Discover More Card. It's accepted at more locations than the Discover More Card (Not sure how important this is yet). It has many of the same perks, but no additional ones. Chase offers more online merchants places with cash off greater than 1% than Discover, but the % off tends to be 5% or less (Where Discover is 5% minimum), with almost none exceeding 10%. Yoox is 5% off, Brookes Brothers is 2%, Banana Republic is 4%, J. Crew is 2%, Ralph Lauren is 3%, Saks Fifth is 5%, etc.
Negatives: Does not offer the feature to convert points to gift cards which can more than double their value at certain locations.
Summary: Overall, the discounts and cash backs are excellent, and the baseline cash back is greater than what Discover offers. Unfortunately, the difference between 0.25% and 1% on general cash back b/w the discover and chase cards is not very significant, because this is not the true value prop of these cards (which is discounts in the 5-20% range). If you are spending enough for the 0.75% margin to matter, you'd do better with a card out of this spending range.
Decent Summary (With Merchant List):
http://www.askmrcreditcard.com/chasefreedomcard.html
Current winner for me is the Discover More card
While Chase offers a much larger selection of merchants, I don't think it will pay off for me. With the beginning of the semester approaching I will definitely spend $500 in the next 3 months (Books, Booze, and other personal rewards for finishing the MCAT). The $75 translates to 15% back on that $500. I am also not frugal enough in my spending to consider 0.75% a worthwhile advantage for baseline returns with Chase (The next $10 impulse buy I make will more than negate the extra 0.75% from $1000 spent on the chase card). The best long term option is to get both and use whichever has the best deal going for each individual purchase, but I'm not going there (Yet).
So those are my thoughts, and I'll probably apply for the Discover card this afternoon. If anyone has anything to add, I'd love to hear it.
