You never carry a balance on your credit card, always pay the bill weeks before it is due, and you make complete stops at every stop sign.
Well aren't you a goody-goody?
Hey, we applaud your upstanding ways. And so does the lending industry. For those who use their cards responsibly, the credit card world is your oyster (or kingdom, if you're allergic to seafood). Why not get some perks for being a pristine credit card carrier? You can earn airline miles, perfume, and even teddy bears by using your credit card.
The tradeoff is that a rewards card usually does not have those low interest rate deals. That's something to consider if you occasionally carry a balance. And for those playing the balance-transfer game, earning miles or rewards for balances you transfer to a rewards card is a pipe dream. It just doesn't happen.
Conscientious credit citizens should look for the following traits in their card:
At least a 20-day grace period. The grace period is the time between the end of your billing cycle and when your payment is due. If you have paid off your previous balance in full, during the grace period you will incur no interest charges. If you do not pay your balance in full, interest will start accruing on the amount you owe, and it will not stop until your account balance goes back to $0 again. On top of that, all of your subsequent purchases will also be subject to interest charges.
A card that offers rewards. If you're going to use it anyways, why not get something back for your credit card patronage? There are reward cards available that offer airline miles, travel points (for use renting cars or dollars-off hotel stays), money toward college tuition, discounts on all sorts of products, and even cold, hard cash, like our own Motley Fool Visa Card. A rewards card is great for those who pay for a lot of their purchases via plastic, and pay off their balances every month. If you aren't sure what reward to choose, go with a card that offers cash back.
Low fees. Many reward cards carry annual fees. Sometimes you can get a lender to waive the fee by asking nicely. If you use a card that charges an annual fee, make sure that whatever benefits it offers outweigh the fee you're paying to carry the card in your wallet.
Helpful billing statements. The best lenders offer detailed billing statements, on a quarterly or annual basis. Your purchases are categorized (e.g., under "restaurants" or "retail" or "ugly shoes"), and you get an analysis of your spending -- in pie charts, grids, and all manner of glossy treatments. Again, for those who rely on plastic as their main method of spending (for everything from utilities to airline tickets), an annual spending report is a nice bonus.
