Last month's announcement that MBNA (NYSE: KRB ) , which provides The Motley Fool line of credit cards, will issue American Express (NYSE: AXP ) branded credit cards before year's end could unleash new opportunities to buy everything on sale.
Confused? Follow the logic: If you pay off your credit card bills each month, you can pile up freebies from BankOne (NYSE: ONE ) , Citigroup (NYSE: C ) , Capital One (NYSE: COF ) , Morgan Stanley's (NYSE: MWD ) Discover Card or your local bank -- whomever will lend you a slice of plastic. The kind of freebie doesn't matter, so long as it's something you like and you don't pay fees or interest to get it.
Using a 1% cash-back card to fuel up at Starbucks (Nasdaq: SBUX ) ? Each dollar of that caffeine jolt will cost you only $0.99. See the beauty?
I wish I could take full credit for this discovery, but, alas, there are a number of very smart Fools at our Consumer Credit / Credit Cards discussion board. Many of them seem to favor cash-back cards. I tend to like miles and points. Which you choose ought to depend on how much you spend, what you buy, and what you want. Let's tackle each in order:
Most cards offer bigger returns with more spending. Take Blue Cash from American Express, which requires you to fork over more than $6,000 per year to get back 1.5%. This is great for the consumer who is willing to put the grocery bill on a credit card. But if that's not you, try a card that gives points per dollar spent or a flat cash-back rate.
Affinity cards also work best when they reward you for what you already buy. Commuters, for example, might favor J.P. Morgan Chase's (NYSE: JPM ) PerfectCard, which offers 6% back on gas purchases in the first 90 days and 3% thereafter.
Of course, it's most important to find a card that delivers what you want. For me, it's vacations. My wife and I are hooked on trips we couldn't afford if American Express wasn't footing (part of) the bill. Others will want cash kickbacks. Still others might want help paying for a college 529 plan.
Credit card issuers are offering dozens of choices for the savvy credit shopper. At the risk of sounding too Shatner-esque from those cheesy Priceline commercials: This means you don't have to pay full price for anything, so long as you're comfortable with using credit as a tool and have the discipline to pay your bills in full each month.
Are you ready to buy everything on sale?
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There's nothing better than whipping out a credit card with a jester on it every time you make a purchase -- unless it's getting cash back and a great interest rate to boot. With The Motley Fool Visa card you can have it all: Make 1% off your purchases, earn interest on your own cash during a generous grace period, and get a smile at the cash register every time you use it, too! Stand up and be counted. Become a card-carrying Fool today.
Tim Beyers doesn't own shares of any of the companies mentioned here. He's a travel geek who considers it a sport to find out how much moolah he can squeeze out of affinity programs. His wife doesn't understand the obsession, but she digs the free travel.