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Are Balance Transfer Cards Better Than Rewards Credit Cards?

When people think about applying for a new credit card, they often look at the welcome offers and the types of rewards that can be earned with everyday purchases. Sometimes you might need another perk, besides rewards, to make you click the “Apply Now” button. This might apply to you if you are carrying a balance on one of your current credit cards and are looking for a hand-up to help pay off the debt.

But, is it better to choose a balance transfer card or a rewards credit card? Applying for either type of credit card will count as a hard inquiry and affect your credit score, so you will want to compare the advantages and disadvantages of each credit card to help you make the best decision.

Advantages Of Balance Transfer Cards

While rewards credit cards might offer welcome offers of frequent flyer miles or complimentary hotel stays when you meet a spending minimum, balance transfer credit cards will not charge interest on balances transferred from other credit cards for a predetermined time period (typically 12 to 18 months). Your new credit card might charge a one-time fee of 3% to 5% of the balance transferred (credit cards need to make money somehow). But it’s still cheaper than the interest you are paying on your existing credit card.

These cards can be very advantageous if you have any type of credit card debt as you can make payments interest free for several months. This can be a great alternative to debt repayment compared to a high-interest personal loan. You should view the 0% APR as a “second chance” to getting debt-free and rebuilding your credit.

Disadvantages of Balance Transfer Cards

While balance transfer credit cards offer an introductory 0% APR, there are several drawbacks to these cards. Possibly the largest drawback is the APR after the 0% introductory period ends. If you cannot pay off your balance in full (or most of it), the interest rates on these cards can be noticeably higher than other rewards credit cards with interest rates as high as 23%.

If your balance is too high, it might be better to swap your credit card debt for a personal loan with a lower interest rate. Of course, the post-introductory rate will largely depend on the credit card and your credit score. Not all credit cards or credit scores are created equally. It might pay dividends to look at the interest rates and perks of the card after the introductory period.

If you have a high credit score and a low balance, it might be more advantageous to apply for a new credit card with a short introductory balance transfer period and a low-interest rate.

Caps on Transfer Amounts

Another downside of balance transfer credit cards is that some credit cards cap transfers to a certain dollar amount. For example, the Chase Slate limits balance transfers at $15,000 regardless of your credit limit. Depending on the balance amount you want to be transferred, you will need to verify if the prospective credit card will allow you to transfer your full amount.

A final downside of balance transfer credit cards is the lack of purchase rewards. Cardholders of balance transfer credit cards normally have to trade rewards for 0% APRs on outstanding credit card balances. This isn’t always the case as some balance transfer cards do offer purchase rewards. However, they are usually not as lucrative as those offered by rewards credit cards.

Advantages of Rewards Credit Cards

Rewards credit cards “reward” users for spending and making payments on-time. They might award cardholders with points or cash rewards. Plus, their welcome offers entice new applicants to spend a specific amount of money within the first two or three months of account opening to receive an additional bonus.

In one way, rewards credit cards are the complete opposite of balance transfer cards that offer a “second chance” to pay off their balances without interest. With both types of cards, credit card issuers make their money through transaction fees and balance transfer fees (even when the transferred balance is paid in full before the introductory period ends).

As many balance transfer credit cards do not offer purchase rewards, rewards credit cards are better for those that pay their bills regularly. They might also be a better option for somebody who has a small outstanding balance and has more to gain from long-term purchase rewards, even if it means paying interest on credit card debt. Your amount of debt might determine if short or long-term rewards are better.

Disadvantages of Rewards Credit Cards

One big downside of rewards credit cards is the relatively higher fees that are incurred with balance transfers. Credit cards need to make a profit to remain in business. That means they can only offer so many perks.

This is why most credit cards charge no interest for the first 12 to 24 months of account opening or offer purchase rewards. If rewards cardholders do not meet the payment deadlines, they do not earn rewards points on the outstanding balance.

Rewards credit card programs might also require a higher credit score than balance transfer cards. Each balance transfer and rewards program has different eligibility requirements. Some are more stringent than others. As a whole, balance transfer cards give credit card users a chance to catch up and rebuild their credit.

People with higher credit scores will qualify for rewards credit cards that offer better rewards and have lower interest rates than post-introductory APRs offered by balance transfer credit cards. If you have a history of credit card debt or low credit score, your application for a rewards credit card might not be a sure thing. The best place to get credit score information won’t hurt your credit but will also provide essential information.

Are There Credit Cards With Rewards and Introductory APRs?

Yes! There are a few credit cards that offer 0% APR on balance transfers for at least one year and rewards for everyday purchases. You may need a higher credit score to qualify for these cards, but they do exist. Our study of the best balance transfer credit cards to apply for in 2018 can be found here.

The Verdict on Balance Transfer Cards

Which type of credit card is better? It depends on your financial circumstances. If you have a manageable credit card debt of several thousand dollars that you can pay off within the 0% introductory period, a balance transfer card will be a better option. The interest-free payments will probably be a better “return on investment” than any rewards program.

Once you become debt-free, and if your credit score is high enough, you can always apply for a rewards credit card.

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Planning to Apply for a 0% APR balance transfer card? – Don’t do it before you read these facts

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Although it’s an excellent idea to use a 0% APR balance transfer credit card as a part of your debt repayment strategy, you must definitely pay heed to the fine print of the card before putting pen to paper.

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You may often hear people talking about 0% APR cards like some mythical creatures, capable of amazing powers! However, if you look closely you’ll find that these cards are quite like the regular credit cards, having the same rules. To think of them in any other way can be the perfect recipe for ruining your credit score and losing out on the 0% APR offer. Nothing denying that these cards provide you free credit for 12 to 21 months, one bad move and you could be back to square-one, with a hefty APR percentage and no end to your credit woes! Let’s take you through some facts that can help you avoid such a situation:

Fact no. 1 – You may have to cough up a balance transfer fee

Although a good number of balance transfer cards don’t feature any such fee if the transfer is processed within the first 60 days of account opening, the others may come with a 3% to 5% fee on the transferred card balance, as a part of the 0% APR deal. This means that if you transfer a $ 5000 balance to a 0% APR card that has a 3% balance transfer fee, your new outstanding balance would be $ 5150. While it may still be an excellent offer considering your overall interest savings, you must factor in this fee is while working on your long-term debt clearance plan.

Fact no. 2 – Skip a payment and you’re most likely to lose the balance transfer offer, or get forced into paying a hefty penalty APR

While it’s a good strategy to transfer your high interest credit card balance to a 0% APR balance transfer card, save plenty on interest payments, and get rid of your card debt in the quickest manner possible, you must ensure that you never miss any of your monthly payments. The 0% offer can be completely cancelled if you get considerably late in making your monthly payment (by 60 days or more). What’s even worse is that you may get charged a hefty penalty APR on the remaining balance if you’re more than 60 days late (as per Credit Card Act, 2009). This penalty APR can be in the vicinity of 30%, a burden which you can definitely do without!

Fact no. 3 – Majority of these cards apply the 0% APR offer to either balance transfers or purchases

You must carefully understand the workings of the 0% APR offer before getting too excited about a balance transfer card. In majority of cases, such cards offer the 0% APR rate only on the balance transfers and not on purchases. Then you may find other types that extend the 0% APR rate for longer time periods on balance transfers, but limit its applicability on purchases for only around 6 months.

If you’re someone who regularly uses your credit card to buy items of day-to-day needs while you are clearing your credit card debt, you may pile up more and more credit unknowingly.

Fact no. 4 – Buying a balance transfer card for clearing your debt can have a short-term negative impact on your credit score

Although continuing clearing your debt over the long term can boost your credit score overall, several required moves made during the balance transfer process can hurt your credit score in the short-term. As new credit constitutes 10% of your credit (FICO) score, opening a new credit account may lead to a temporary drop in your score by a few points. In addition, just doing a balance transfer won’t make your debt go away. Your credit score will inevitably drop if your credit utilization continues to be high, meaning that you continue piling up credit card debt.

However, it may all work to your advantage if you continue making monthly payments and mend your credit utilization rate. Please keep in mind that credit utilization or the amount you owe constitutes 30% of your credit or FICO score, making it a huge and unavoidable factor.

Fact no. 5 – A balance transfer alone won’t rid you of your card debt woes

A great multitude of people think that they can quick-fix their financial problems by transferring their high-interest card balances. They don’t understand that a balance transfer alone can never rid them of their credit card woes. Although it may save them a lot of money in terms of interest rate in the short-term, they’ll still owe the originally transferred balance to the new card issuer. And the interest component can return with full force once the introductory 0% APR offer gets over. You need to be a really disciplined in your financial habits in order to make the balance transfer work, implying that you need to diligently use the 0% APR offer period to clear away your debts for good.

Fact no. 6 – The regular interest rate becomes automatically applicable post the expiry of the introductory 0% APR offer period

When you get a balance transfer card, you actually engage yourself in a battle of patience and discipline with both the card issuer and yourself! Either you stay disciplined and clear off your entire outstanding balance or have to cough up a hefty interest rate post the expiry of the introductory 0% APR offer period. That’s precisely the reason why card issuers offer the 0% rate for no more than 12 to 21 months! The applicable interest rate post the expiry of introductory period can be anywhere from 5% to 24.9%.

Final Thoughts

Don’t get taken away by all the fairy tales surrounding the 0% APR balance transfer cards. Rather, equip yourself with facts and figures, and make moves which are in line with your long-term financial plan. A momentary lapse of reason and you may wind up exactly where you started from! So be careful and make the most of balance transfer facility.

 

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The impact of balance transfer on your credit score

It isn’t uncommon for credit card customers burdened by high-interest card debt to opt for balance transfer facility to benefit from the introductory 0% APR offers. Nothing denying the fact that such refinancing can be a very cost-effective move, but it also leads to a hard inquiry into your credit, which is most likely to temporarily affect your credit score.

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How your credit score gets impacted

As per FICO (Fair, Isaac and Company), any such hard inquiry made on credit leads to a temporary drop of around 5 or less points in the credit score. However, it’s normal to see the credit score bounce back up after a few months’ time as you start repaying your debts in time. In fact, in many cases, the credit score even gets better than before! The reason for that is while new credit constitutes 10% of the credit score, the total amount owed makes 30% of it. When we talk about the total amount owed, it isn’t necessarily about the actual dollar amount owed by you, but more about your credit utilization ratio. You need to divide the total amount owed by the total credit limit available to you (across all your credit cards), to arrive at this ratio.

Let’s assume that you owe $ 10,000 as credit card debt, and it’s the only debt you owe. You have only one credit card, with a limit of $ 15,000. At this point, you are provided an opportunity to transfer that $ 10,000 balance to another credit card offering an attractive limited period 0% APR facility. The new credit card also offers you an extra $ 5,000 credit line.

There’s a 3% fee associated with this balance transfer facility, so essentially your new total credit card debt will become $ 10,300 post the transfer. However, where things get interesting is that while your credit utilization ratio was 66.6% earlier, it’d become 51.5% after the transfer is complete (taking the balance transfer fee into account). Although you may owe a little more money to the card issuer, you’re most likely to see a jump in your credit score owing to lowering of the credit utilization ratio. The $ 300 fee paid by you would be put to excellent use as it’d probably save you a good deal of money in the long term. Let’s understand how.

How a credit card balance transfer saves you money

Even though you may owe an extra $ 300 on your credit card, having transferred your $ 10,000 balance to a 0% APR card is sure to save you a good amount of money in the long run. In this example, the introductory 0% APR offer is applicable for the first 18 months, followed by 15% APR (once the promotional period ends).

Let’s say you make monthly payments of $ 250 right now, and are charged 18% APR on your $ 10,000 balance.

Assuming that you avoid opting for the balance transfer facility and continue making these $ 250 monthly payments, it will take you 62 months and a total of $ 5,386 in interest to become debt free. Your total outgo, in that case, would be $ 15,386.

On the other hand, if you do opt for the balance transfer facility and continue making the same $ 250 monthly payments, you could free yourself of your card debt in 46 months, and pay only around $ 1,093 in interest. Your total outgo in this scenario would be $ 11,393.

What more, you could even opt for another balance transfer at the end of the first 0% APR promotional period, transferring the remaining balance ($5,800) to another 0% APR card (with $300 transfer fee) for an additional 15 months of interest-free honeymoon, and become debt free in total 44 months, paying just $165.6 in interest!

As you can see, the initial temporary hit you take on your credit score and the $300 balance transfer fee can save you tremendously by opting for single or multiple balance transfers.

Simply put, it’s definitely worth it!

When it may be better to wait

In case your credit score isn’t in a very good shape, it may be better to wait until it climbs back up into a respectable ‘good’ range, which is 680 or above, before applying for any balance transfer credit card. Financial institutions are generally hesitant in accepting balance transfer card applications of people whose credit score is below 680. However, they need to make a hard inquiry to obtain that information. It would mean that your score will still drop, and you’ll not be able to reap any benefits of the reduced credit utilization either.

Hence, if you’re somewhere close to the magic 680 figure, it’d be good to wait a little more. In fact, you can do certain things which are likely to increase your credit score instead, for instance continuing making minimum payments on your card/s each month and paying all your other bills in time, to avoid anything delinquent popping up in your credit report.

Continuing making all your payments on time is most likely to result in your creditor passing positive details to the credit agencies. At least, nothing negative would be reported.

Furthermore, you can even make higher than minimum payments and reduce your balance/s rapidly, lowering your credit utilization ratio and positively impacting your credit score.

Any increase in your credit score is highly likely to qualify you for better interest rates when you apply for the balance transfer card later.

It may also be better to wait for balance transfer credit card application if you’re planning to take out a mortgage anytime soon. Buying a home is easily one of the major purchases that you’re likely to do in your entire life. It’s best to keep your credit score in good shape when you submit your documents. Taking even a slight hit due to a hard inquiry (resulting from a balance transfer card application) can negatively impact the offered interest rates on a mortgage.

Final thoughts

If you qualify for a balance transfer card right now and don’t have any major purchases coming up in the near future, it may make a lot of sense to take that small and temporary credit score hit, and save a lot of money in terms of interest, in the long-term. Just ensure that you continue making the minimum due payments on the new card (without fail) after the balance transfer is complete.

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The Slate vs the Freedom Rewards Card

Finding the right credit card can be a daunting task, especially with the myriad of choices available from a slew of various issuers. Differences in rewards programs, promotional offers and card member fees play a major role in which card is best suited for specific borrowing needs. Some popular credit card issuers like Chase Bank have simplified the process by designing credit cards for those seeking out very specific card member perks. The Chase Slate credit card and the Chase Freedom credit card are two very different options that deserve a closer look.

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A Dream for Balance Transfers

The Chase Slate credit card is designed for individual borrowers looking for a low-cost way to transfer balances from higher interest rate cards or those in need of a low introductory interest rate. The current balance transfer promotion for Chase Slate card members is attractive because it extends beyond most comparable balance transfer offers in terms of time to repay. New Chase Slate card members who transfer a balance to the credit card within 60 days of account opening receive 15 months of 0% interest on balance transfers, and the balance fee of the greater of $5 or 5% is waived for the first transaction. For individuals with a high-interest rate balance on a different card, the balance transfer offer through Chase Slate is second to none.

In addition to the balance transfer promotion, new Chase Slate card members have a 0% interest rate on any purchases made within the first 15 months after account opening. After the promotional period ends, the standard APR for well qualified card members is 13.24%; applicants with less than exemplary credit may qualify for a standard APR of 18.24 or 23.24%. Balance transfer rates revert back to the standard rate assigned at the time of account opening as soon as the promotional period ends. The Chase Slate card does not impose an annual fee for card members, making it an attractive choice for those with high spending needs or high interest rate balances elsewhere.

The Chase Slate card does not offer any rewards program at this time.

Rewards Aplenty

The Chase Freedom card is best suited for individual borrowers seeking out a strong rewards program. Card members earn 5% cash back on rotating bonus categories each quarter, including gas stations, certain retailers and restaurants, up to a maximum of $1,500 in purchases. All other purchases made with the Chase Freedom card earn card members a flat rate of 1% cash back with no cap on earnings. The bonus categories must be activated each quarter to ensure rewards are earned, but the 1% cash back is and automatic benefit.

The Chase Freedom credit card offers a similar promotion to new card members in terms of the purchase APR and the balance transfer APR. Qualifying applicants receive 0% interest on both purchases and balance transfers for the first 15 months after account opening. Chase Freedom differs from Chase Slate in that the balance transfer fee of 5% still applies. After the promotional period ends, the standard purchase and balance transfer APRs can be as low as 14.24%. Card members may also qualify for a standard APR of 19.24% or 23.24% if credit history or score are not ideal.

Chase Freedom card members also have the potential to earn $150 in bonus cash back when $500 or more is spent within the first three months after account opening. Adding an authorized user to an account also boosts cash back earnings by $25, but only when the user is added and makes a purchase within the first three months. Cash back rewards earned with Chase Freedom do not expire as long as the account remains in good standing. Rewards can be redeemed for cash, check out at Amazon.com, gift cards from select retailers, or through Chase’s travel site. A minimum of $20 must accumulate prior to redeeming rewards. Chase Freedom does not carry an annual fee.

Chase Card Member Perks

All Chase credit card members have access to a variety of additional benefits, most focused on enhanced security. Both the Chase Slate and Chase Freedom credit cards are chip-enabled which offers a greater level of acceptance around the world. Purchases made with either card are also covered by zero liability protection. This means that unauthorized charges or fraudulent purchases are not the responsibility of the card holder, up to certain limits. Chase card members also have purchase protection and extended warranty protection for eligible purchases.

Chase Slate and Chase Freedom credit cards also provide auto rental collision damage waivers, roadside assistance and dispatch, and travel insurance for those on the go. The Chase Slate card also waives foreign transactions fees making it more attractive to travelers; the Chase Freedom card assesses a foreign transaction fee of 3% per purchase.

Chase offers a unique feature to card members in its BluePrint payment system. Card members can elect to customize payments based on the type of purchases made and the amounts spent over a single billing cycle. For borrowers who carry balances over from one month to the next, BlutPrint is a smart way to control spending and repayment that is truly unique to each card member.

Which Card is Right for You?

The Chase Slate card is a simple credit card that does not offer a rewards program in terms of cash back or travel points. Instead, Chase Slate card members can take advantage of the inexpensive balance transfer offer or the introductory 0% APR to save cash for other needs. Applicants need to have excellent credit in order to qualify for the Chase Slate card, setting it apart from the Chase Freedom option.

The Chase Freedom credit card is best suited for individuals with a penchant for points. The rotating cash back bonus categories offer a way to boost earnings for card members who spend consistently on certain purchases, and the flat rate cash back helps keep rewards accumulating outside the bonus categories. The introductory purchase rate and balance transfer offer for Chase Freedom is attractive for cost-conscious card members, but the balance transfer fee makes the card more expensive than Chase Slate. Both Chase credit card options can be used as standalone cards or in marriage with one another to enhance the experience.

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Comparing the Capital One Quicksilver and Chase Freedom Rewards Cards

Credit cards that offer rewards programs for card members are a smart way to earn extra cash toward purchases for savvy users. In recent years, the number of credit card rewards programs made available to qualified applicants has grown substantially, making it difficult to weed through the good, the bad and the ugly. For example the Chase Sapphire Preferred & Capital One Venture compare quite differently than marketed. And both the Chase Freedom and the Capital One Quicksilver credit cards are strong contenders for cash back rewards, but they differ greatly in terms of their rewards programs, additional card member benefits and total costs associated with owning the card. Here’s the skinny on each.

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Rewards Program Breakdown

The Chase Freedom credit card offers a rotating bonus cash back schedule, on top of a flat rate rewards program. Under the rotating bonuses tier, card members earn 5% cash back on purchases made within each applicable category for the time frame defined within the cardholder agreement. For the 2016 calendar, Chase Freedom card members earn 5% cash back on purchases made from gas stations and local commuter transportation, not including parking, Amtrak purchases or tolls. The second quarter offers the same cash back bonus on grocery store purchases, not including Walmart or Target stores, while the third quarter includes restaurants. The fourth quarter is typically geared toward holiday shopping with specific retailers and online partners added as the season begins. Card members earn the 5% cash back bonus on up to $1,500 in purchases, each quarter. All other purchases made with the Chase Freedom credit card earn 1% cash back with no limit.

The Capital One Quicksilver card differs from the Chase Freedom option in that it does not offer bonuses on specific spending categories. Instead, the credit card is a flat rate rewards card that offers 1.5% cash back on all purchases with no limit. The idea behind the Capital One Quicksilver card is focused on simplicity as card members do not need to track spending in certain categories or time purchases to ensure they receive the most benefit from their card.

Card members with Chase Freedom have the potential to earn more on certain purchases than Quicksilver cardholders, but the cap on earnings with Chase makes it difficult to capitalize fully on cash back rewards. Additionally, card members have the activate each bonus cash back category at the beginning of each quarter to ensure they receive the additional rewards points. Capital One Quicksilver card members can redeem rewards in any amount at any time, while Chase Freedom account holders have to accrue $20 worth of rewards before redemption is an option. Both credit cards offer statement credits and cash deposits as options for redeeming rewards, and rewards do not expire. Chase Freedom offers additional ways to redeem rewards, including shopping directly through the Chase mobile app or purchasing gift cards directly through Chase from partner retailers.

Added Card Member Perks Comparison

Currently, new card members can earn $100 cash back bonus if $500 in purchases are made within the first three months after account opening. The Chase Freedom credit card has a $150 one-time bonus with the same spending and time frame parameters. Both cards also provide for authorized users to be added to the accounts, and no annual fee.

Both the Chase Freedom credit card and the Capital One Quicksilver card provide additional benefits and protection to card members through the following comparable features:

  • Purchase protection up to certain limits
  • Extended warranty protection
  • Trip interruption/cancellation insurance
  • Travel accident insurance
  • Rental card damage waiver
  • Lost luggage reimbursement

In addition to these benefits, Chase Freedom also offers price protection and return protection on purchases made with the card, as well as Roadside Assistance Dispatch services. Capital One Quicksilver card members have access to a 24/7 concierge, luxury hotel discounts, sports experiences and other shopping discounts. Capital One stands out in the additional perks category by also offering free access to Credit Tracker which allows card members to access their credit score and changes to their credit profiles any time from the mobile or desktop apps. Chase Freedom does not currently offer credit information directly to card members.

Card Member Costs

Both rewards credit cards are currently offering new card members low introductory interest rates on purchases and balance transfers, although one is a stronger offer than the other. Chase Freedom has a 0% purchase APR for the first 15 months after account opening, after which time the interest rate reverts to a variable rate ranging from 14.24% up to 19.24%. Chase is also offering a balance transfer promotion for new card members that includes a 0% interest rate for the first 15 months after the balance is transferred. The balance transfer rate reverts to the same as the purchases APR after the promotional period expires. Card members should note the balance transfer fee of 5% is applied.

Capital One Quicksilver card members have access to a 0% purchase APR for the first nine months after account opening, after which time the rate reverts to a variable APR that ranges from 13.24% up to 23.24%. Balance transfers are also available through Capital One with a 0% APR for the first nine months. After the promotional period ends for balance transfer made through the Quicksilver card, card members receive a variable rate that is the same as the purchase APR assigned at the time the account was opened. The balance transfer fee for Capital One is 3%.

Neither the Chase Freedom Card nor the Capital One Quicksilver card carries an annual fee. However, Capital One does not impose foreign transaction fees on its card members, while Chase does at a clip of 3% per transaction. The late fee assessed for both cards can be as high as $35, while the fees for returned payments vary.

Final Thoughts

Both the Capital One Quicksilver and the Chase Freedom cards offer strong rewards programs to card members, but the variations may suit some spenders more so than others. For those who spend heavily in bonus categories each quarter, the Chase Freedom credit card is a no brainer. But for account holders who prefer simplicity and a flat rate rewards program, the Capital One Quicksilver card definitely takes the cake. The one-time bonus cash back offers are similar for each card, but those who want to take advantage of a 0% purchase or balance transfer APR may be drawn more toward the Chase option. Without an annual fee and no expiration on earned rewards, both the Chase Freedom and Capital One Quicksilver cards provide cost effective benefits to card members.

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Review of the no annual fee Capital One Venture Card

Finding the right travel rewards credit card fit for your specific needs and spending habits can be a challenge, especially given the onslaught of advertisements flooding the television and online. Capital One is arguably the leader in terms marketing efforts pushed out to the masses, with notable celebrity endorsements and amusing commercial spots. But all the pomp and circumstance surrounding a credit card does not always mean it is the best option for spenders. To help you determine if the Capital One VentureOne credit card is the one for you, we’ve cut through the fluff to bring you the clear upsides and downsides to the card. Here is our review of the no annual fee Capital One VentureOne credit card.

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VentureOne Card Basics

The VentureOne credit card offered by Capital One is a flat-rate travel rewards card. Card members earn 1.25 miles on every dollar spent, regardless of the category of purchase. Each rewards mile through Capital One is worth $0.01, and there is no cap on how many miles can be earned. Also, miles don’t expire, making this an attractive travel card for those who do some heavy spending.

Currently, Capital One is offering a bonus to new card members of the VentureOne card. A one-time 20,000 bonus – or $200 worth of miles – is credited to the card member’s account if at least $1,000 in purchases is made within the first three months after account opening. The combination of miles earned on everyday spending and the initial bonus potential makes the VentureOne card stand out among some of its travel credit card peers.

As a true travel rewards credit card, VentureOne card members are restricted in terms of how miles are redeemed. For now, accumulated miles can only be used as a statement credit toward travel-related purchases. As an example, a card member who purchases airfare on her Capital One VentureOne credit card could use her accumulated 20,000 miles – or $200 – to offset the total cost of her flight. What makes the VentureOne card unique is that there is no need to redeem miles through a dedicated travel site; instead, card members can book their travel how they see fit, directly through the provider or through a partner site. That means no blackout dates and no other pesky restrictions as seen with other travel rewards cards.

Miles cannot be exchanged for cash back or gift cards, nor can a statement credit be applied for anything other than a travel purchase. If you’re seeking out a travel credit card with more flexibility in terms of how miles can be redeemed, the VentureOne card may not be the best choice for you.

Capital One Perks

In addition to the rewards program, Capital One VentureOne card members have a slew of perks at their fingertips. The most notable is the Credit Tracker app, which provides access to the individual’s credit score and activity at no cost. Through Credit Tracker, card members can also gain valuable information regarding what implications changes to their credit profile will have on their score, for better or worse.

Card members also have access to online banking through Capital One, as well as mobile and tablet apps that are helpful for checking balances and payments on the go. In terms of enhanced security, VentureOne card members receive real-time alerts regarding suspicious or fraudulent activity on their account, either through phone, e-mail or text. On top of that, lost or stolen cards are covered by a $0 fraud liability protection program.

One of the unique features of the Capital One VentureOne credit card is the Second Look program, through which Capital One keeps an eye out for duplicate or unusual charges. Should a questionable charge post to the card member’s account, the bank automatically sends an e-mail alerting them to the issue. Capital One also offers Apply Pay for card members who are comfortable using mobile payment applications, as well as personalized payment due dates and various ways to establish payments. Card members have access to 24-hour travel assistance services, auto rental insurance, and travel accident insurance with the VentureOne credit card.

What the Card Costs

Capital One states that the VentureOne credit card is for individuals with excellent credit, typically meaning a credit score of 720 or higher is required for approval. Once approved, the interest rate for purchases starts at 0% and remains there for the first 12 months after accounting opening. Currently there are no promotional APR offers for balance transfers. After the promotional period ends, both purchases and balance transfer rates are based on individual creditworthiness, and will be 12.24%, 17.24% or 22.24%. Cash advance transactions carry a standard APR of 23.24%.

The VentureOne credit card does not assess an annual fee, nor does it carry any foreign transactions fees. From this perspective, the travel rewards card is relatively inexpensive. However, other fees are charged for specific transactions. Card members who initiate a cash advance pay a fee of either $10 or 3% of the amount advanced, whichever is greater. Late payment costs $35, although there are no fees for exceeding the credit limit.

The Final Word

The Capital One VentureOne credit card is a great choice for individuals seeking a travel rewards card that is simple to understand and easy to use. The VentureOne card comes with a flat-rate rewards program, meaning there are no special categories to keep track of over time. Additionally, card members have the ability to redeem rewards through statement credits for travel purchases, without the need to book travel directly through CapitalOne. The introductory APR for purchases, the additional card member perks, no annual fee and potential for bonus miles within the first three months come together to make this a solid travel rewards credit card.

Individuals who want to maximize on a sign-up bonus or who want to earn more miles with purchases may be better off with a different travel credit card. Capital One offers a travel credit card (Venture) that earns higher rewards and provides a sign-up bonus that is double that of the VentureOne card; however, card members who hold the Venture credit card are assessed an annual fee for access to greater rewards.

 

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Comparing the Benefits of the Discover it and Discover it Chrome

Discover is one of the largest issuers of cash back credit cards, and there is an option under the Discover brand for just about every type of spender. Cash back rewards through Discover are simple to understand and each card provides additional card member benefits at no cost. The Discover it and the Discover it Chrome are two of the most popular additions to the Discover line of cash back rewards cards. Each card option has its advantages and disadvantages, and each is best suited for a specific type of card holder. Let’s review the difference in card basics first.

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Discover it Basics

The Discover it credit card is a combination bonus cash back and flat rate cash back credit card that provides card members the ability to earn points in various ways. First, card members can ramp up cash back earnings by spending in certain categories throughout the year, up to a maximum earning limit. Discover it card members earn 5% cash back on quarterly bonus categories, such as gas, entertainment, and online shopping, up to $1,500 in purchases. Every other purchase made with the Discover it credit card earns 1% flat rate cash back which is unlimited. Regardless of the category in which cash back points are earned, rewards do not expire and they can be redeemed in any amount at any time.

 

Discover it Chrome Basics

Discover it Chrome was designed with students in mind, specifically for the card member who does not want to activate or track quarterly bonus categories to maximize cash back earnings. Instead, card members earn a flat rate of 2% cash back on purchases made at gas stations and restaurants; all other purchases earn the standard 1% rate. The enhanced cash back on gas stations and restaurants are capped at $1,000 in purchases, combined, but all other cash back earnings are unlimited. Similar to the Discover it credit card, Chrome card members can redeem rewards at any time and in any amount.

Card Member Benefits

Both the Discover it and the Discover it Chrome cards offer a variety of ways to cash in on rewards points. Card members can redeem rewards for cash, either as a statement credit or as a direct deposit into a bank account, or to check out at Amazon.com. Additionally, gift cards may be purchased with accumulated cash rewards through Discover’s rewards site. Card members may also donate cash back rewards to charity – a unique feature not found with many rewards card issuers.

In addition to flexibility in rewards redemption, card members of both the Discover it and the Discover it Chrome credit cards have a variety of other benefits that come with membership. One of the current promotions automatically built in to both card options is the cash back matching where Discover matches any cash back earned within the first year of membership, dollar for dollar. Additionally, Discover offers a free credit FICO credit score on each monthly statement for all card members, making it a breeze to track credit changes over time. Account holders also have the benefit of being able to temporarily freeze a Discover credit card through the Freeze It feature. This is incredibly helpful in preventing new purchases, cash advances or balance transfer if a card is misplaced.

Both the Discover it and the Discover it Chrome cards come with free purchase monitoring as well, which provides a text, e-mail or phone call when suspicious activity takes place on a card member’s account. Discover does not hold card members responsible for fraudulent or unauthorized purchases creating an additional level of protection. Finally, all Discover card members have the ability to reach the U.S.-based customer service line at any time, day or night.

Card Differences

While the aforementioned benefits are inherent to each Discover card member, the two cards differ slightly in promotional offers. As a card designed specifically for students, The Discover it Chrome credit card also offers an additional $20 cash back reward for card members with a GPA of 3.0 or higher throughout the school year. This additional benefit can be earned for a maximum of five consecutive years from the time the account is opened. The Discover it credit card does not currently make available additional cash back promotions aside from the matching program referenced earlier.

The Discover it credit card currently offers a 12-month zero interest promotional period for purchases and balance transfers, which is a significant bonus for card members who plan to carry a balance for the first year of ownership. The standard APR after the promotional period ends ranges from 11.24 up to 23.24% depending on the applicant’s credit score and history. For card members who select the balance transfer option, a fee of 3% for each transfer is assessed.

The Discover it Chrome credit card also offers a promotional 0% APR on purchases, but only for the first six months after an account is opened. Currently, no balance transfer offers are available for Discover it Chrome card members. The purchase APR reverts to the standard 13.24 to 22.24% after the promotional period ends. Both the Discover it and the Discover it Chrome credit cards have no annual fee and no foreign transaction fees, making both smart choices for the cost-conscious card member. Cash advances rates for both the Discover it and Discover it Chrome cards are a variable 25.24%, and the greater of a $10 or 5% fee is assessed for each cash advance transaction.

Which Card is Right for You?

The Discover it credit card is a strong option for individuals who spend heavily in the bonus categories each quarter and those who don’t mind activating each bonus category when the time comes. With no annual fee, an introductory 0% APR on balance transfers and purchases, and the additional card member benefits, the Discover it card can be a great addition to your wallet.

For students, the Discover it Chrome credit card is a sound alternative. The additional 1% flat rate cash back rewards earned for gas station and restaurant purchases is an attractive feature which eliminates the need to track categories every few months. The high GPA cash back bonus is also beneficial to card members who perform well in school. However, with a shorter time frame for the 0% purchase APR offer and no balance transfer availability, the Discover it Chrome card is not the best choice for card members who are not students.

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Discover it vs. Chase Freedom Card

In the universe of rewards credit cards, both Discover it and Chase Freedom stand out as top card options. Account holders not only have seemingly endless benefits with each card, the cash-back rewards are some of the best in the business. However, for newcomers to the credit card rewards playground, there are some nuances that make determining which card is the best a difficult task. Let’s take a closer look at both the Discover it and the Chase Freedom credit cards in terms of rewards potential, introductory bonuses and fees.

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Rewards Showdown

Both the Discover it and Chase Freedom credit cards offer robust rewards programs, but slight differences exist. First, the Discover it credit card offers 1% cash back on every dollar spent on purchases outside bonus categories that rotate on a quarterly basis. Purchases made within the bonus categories earn cardholders 5% cash back, up to a limit of $1,500 in total spending each quarter. Card members must sign up for the bonus categories as they rotate to ensure points are earned on applicable purchases, but the process is simply and free. Discover it bonus categories for cash back earnings are as follows for 2016:

  • January through March: Gas stations and ground transportation
  • April through June: Restaurants and movies
  • July through September: Home improvement stores and Amazon.com
  • October through December: Amazon.com (and others to be determined)

The Chase Freedom credit card also earns card members 1% on all purchases, with similar quarterly cash back bonuses of 5%. The bonus cash back categories do not require activation each quarter, but like the Discover it card, earnings are capped at $1,500 worth of spending. The cash back categories through Chase Freedom rotate each quarter, and for 2016 include:

  • January through March: Gas stations and local commuter transportation (not including Amtrak, tools or parking)
  • April through June: Grocery stores (not including warehouse clubs, Walmart or Target)
  • July through September: Restaurants
  • October through December: Holiday shopping with partner retailers to be determined

The fact that no additional step is needed to activate the bonus cash back rewards each quarter for the Chase Freedom card is certainly a bonus, but the category restrictions make the program slightly less attractive than Discover it. However, Discover it does not require a minimum number of points to accumulate prior to redemption; Chase Freedom card members must have earned at least $20 in cash back rewards prior to redeeming.

Upfront Bonuses

Only Chase Freedom offers an upfront cash back bonus for new card members within the first few months. Cardholders have the potential to earn $150 in cash after a minimum of $500 is spent on purchases within the first three months of account opening. The Discover it credit card offers a matching program for cash back earned, up to $200 additional cash, but the bonus is not immediate. Card members receive the matching cash back credit at the end of the first year after account opening, opposed to the first three months for Chase Freedom.

Comparison of Card Member Fees

For applicants seeking out low-cost rewards credit cards, both the Discover it and the Chase Freedom cards fit the bill. Both credit card options come with no annual fee, and no redemption fees for cash back earned. However, differences come into play as it relates to other costs associated with each credit card.

Discover it has an introductory interest rate of 0%, not just for purchases but for balance transfers as well. The promotional APR is honored for the first 12 months after account opening, after which time the standard rate and balance transfer ranges from 11.24% up to 23.24%. These interest rates are based on each applicant’s creditworthiness at the time of account opening, and rates may fluctuate over time based on broad market movements.

The Chase Freedom credit card also offers an attractive introductory interest rate for well-qualified borrowers. A 0% APR is in place for the first 15 months after account opening for both purchases and balance transfers. After the promotional period ends, card members are assessed interest on remaining balances as low as 14.24% up to 23.24%. All rates for purchases and balance transfers after the introductory rates expire are variable. Account holders looking for potentially lower interest after the promotional rate may find the Discover it card more attractive, while those looking for extended terms for 0% APR purchases or transfers may lean more toward the Chase Freedom card.

One of the other aspects that differentiates the Discover it card from the Chase Freedom card is the foreign transaction fee. Chase Freedom card members are assessed a 3% transaction fee for all purchases made outside the U.S., while Discover it cardholders are not assessed an additional fee for foreign transactions.

Additional Perks

One of the more helpful perks associated with the Discover it credit card is the free access to individualized credit scores through FICO reporting tools. Card members can view their FICO score for free through the Discover portal online, at any time. Additionally, Discover it card members have the benefit of a waived late payment fee for the first occurrence, and a single late payment does not mean a higher APR. These extra benefits are attractive to credit card users concerned about their credit health and status.

The Chase Freedom credit card does not currently provide access to credit monitoring or scores, but does protect card members who make a payment late. No penalty APR is imposed upon the first occurrence of a late payment, although a late payment fee will be assessed. Chase Freedom also offers superb protection against lost or damaged purchases liability protection against identity theft or fraud.

Final Thoughts

Both the Discover it and Chase Freedom credit cards offer smart, low-cost options for individuals looking for rewards programs. The Discover it card is a stronger choice for cardholders who purchase items or utilize their card overseas, or those who do not want to mess with accumulating a substantial number of points prior to redeeming for cash back. The Chase Freedom card is a great choice for individuals who do not want to activate the bonus cash back categories each quarter, or those who are seeking an extended 0% promotional period for purchase or balance transfers.

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American Express Everyday Cards

Credit cards are not only beneficial in covering some of life’s major, and at times unexpected expenses; revolving credit can also be used for managing spending on everyday items like groceries, gas or other monthly bills. For the most dedicated credit card users, finding a rewards card that offers low cost access to credit while also providing a method to earn bonus cash can be a bit cumbersome. The American Express Everyday credit card is a strong choice, however, for those looking for a simple rewards card with a slew of added perks.

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The Basics

American Express has a number of available credit cards for well-qualified applicants, the simplest being the Everyday credit card. As a rewards credit card, the American Express Everyday card allows cardholders the ability to earn two rewards points for each dollar spent at US supermarkets, and one rewards point for all other purchases. One rewards point equates to $0.01, so spending of $1,000 at supermarkets equates to $20, while the same amount spent on other purchases equates to $10 in rewards. As a bonus, card holders who utilize the American Express Everyday credit card 20 or more times within a single billing period can earn up to 20% more points on purchases. The double rewards accumulation is restricted to the first $6,000 in purchases made at supermarkets in any given year.

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For card members new to the American Express Everyday credit card, an additional rewards bonus is available for a limited time. An additional 25,000 points are added to the rewards balance after $2,000 or more is spent on purchases within the first three months of account opening. The bonus rewards point offer is only available for individuals who apply directly through the American Express website, and current and former American Express card members are ineligible for the promotion.

Rewards do require a minimum amount of 1,000 to accumulate before a cardholder can redeem them. The redemption options for American Express rewards are more robust than some comparable rewards cards, but direct cash-back is not an option. Instead, cardholders can transfer points to their Plenti card to use for savings a certain Plenti retailers. Additionally, certain charges on the cardholder’s statement may be eligible for rewards redemption each billing cycle. American Express makes it easy to see which charges qualify through its online portal. Cardholders also have the option to shop with points through Amazon, Ticketmaster and Telecharge. In some cases, rewards points may also be used toward Uber rides, or booking travel through the American Express Membership Rewards travel page. For those who prefer more flexibility in rewards redemption, points may be used to purchase gift cards from a number of partners through the American Express site.

Unique Perks

In addition to a bevy of rewards redemption options, new card members also have the opportunity to take advantage of a 0% APR introductory offer. For the first 12 billing cycles after account opening, purchases are not subject to interest charges. Balance transfers may also be eligible for a 0% APR for the first 12 months, but only when the transfer is requested within 30 days of account opening.

A number of unique perks come hand in hand with the American Express Everyday credit card, including the ability of card members to carry a balance month to month. Additionally, cardholders have access to the American Express Roadside Assistance Hotline which provides valuable help should transportation needs arise. Travel Accident Insurance is also available to card members, providing protection against financial loss in the midst of a travel emergency. The Global Assist Hotline is another added perk which provides help in the event something unexpected happens while traveling overseas.

American Express Everyday credit card members also have access to the following:

  • Car rental loss and damage insurance
  • Extended warranty on purchases
  • Accident and damage insurance on purchases
  • Return protection on purchases

Each additional benefit offered to cardholders may come with certain limitations and applicable terms that should be reviewed prior to using.

The Cost

The American Express Everyday credit card is a great fit for card members who want to steer clear of an annual fee since the card carries none. However, other fees and charges may apply as the card is utilized. While the introductory interest rate is an attractive offer for new card members, the standard APR ranges from 13.24% up to 23.24% based on credit history and score. It is important to note that the APR assigned is a variable rate, meaning it may fluctuate in line with broad interest rate markets over time. Balance transfer interest rates revert back to standard assigned rate as soon as the promotional period ends, and the cash advance interest rate is a universal 25.49% for all card members.

Certain transactional fees apply when the American Express Everyday credit card is used. A balance fee of the greater of $5 or 3% of the amount transferred is applied, whether the transfer is completed within the promotional period or not. Cash advance transactions also bear a $5 or 3% fee, whichever is greater. Foreign transaction fees also apply at a rate of 2.7% of the total purchase amount. Both late fees and returned payment fees are set at $37 per occurrence; however, there is no fee assessed for going over the credit limit.

The Verdict

The American Express Everyday credit card is a simple rewards card best fit for individuals who spend a substantial amount on groceries and supermarket purchases each year. The promotional balance transfer and purchase APR of 0% are attractive features for well-qualified cardholders, as it the lack of an annual fee for using the card.

However, individuals who are looking for a high earning rewards card may want to look elsewhere. The majority of purchases made with the American Express Everyday card receive just one reward point per dollar spent, which is relatively low when compared to other rewards cards. Additionally, individuals seeking out a rewards card with a cash-back option should look at comparable rewards cards, as American Express does not offer this perk. Overall, the Everyday credit card is a low-cost, simplistic rewards card best suited for those who spend heavily in a single category.