I’ve been wanting to do this show for a while now. “What’s the best credit card?” is probably the 2nd most asked question I get after “should I rent or should I buy?”
The short answer is – the one that doesn’t have an annual fee, has a reasonable interest rate (under 15%, in case you can’t pay off your balance one month), and has great customer service.
Anything beyond that is gravy.
A tiny drop of rewards gravy on a giant pile of mashed potato debt.
I totally get the appeal of rewards cards. If you’re going to spend the money anyway, why not get something back for it, right? There’s been a growing trend with credit card companies to also offer big bonuses up front to get you to sign up and spend with them instead of your current trusty credit card.
You get 40,000 points or one free flight once you sign on (usually after you spend a few thousand dollars over 3 months) and now you have another credit card to spend money on.
Now we can sit here and go back and forth about how sometimes you get 2 points for every dollar or how you were able to book your last vacation entirely on points, but at the end of the day, credit card rewards are just a distraction.
Calling something points instead of dollars makes it feel more like a game, vs. what it actually is – you spending $12,000 to $25,000 to get a $250 plane ticket.
Credit cards are not a game – they are a tool to help you manage cash flow and build your credit so you have the freedom to one day buy a home or take out a loan to start a business.
I know this doesn’t sound as exciting or fun as collecting points, but really, the best credit card is the one you’re going to use to get closer to financial independence.