“What is the best credit card for me?” This frequently pondered question echoes through our group and during Milesopedia events, underlining the increasing role credit cards play in both the realm of cash-back rewards and travel benefits.
However, there’s no universal answer due to the diverse array of offerings and individual requirements.
This article aims to serve as a comprehensive resource, gathering all pertinent inquiries related to this topic. Its purpose is to illuminate the path for individuals as they navigate the world of credit card choices.
Before embarking on the journey to selecting the best credit card, it’s essential to outline your intentions and desires. Delving into card selection requires a clear vision of what you aim to achieve with these financial tools.
In the realm of rewards, two primary categories beckon:
It’s crucial to consider credit cards primarily as payment methods while pursuing rewards. Should budget management or credit card balance maintenance pose difficulties, revisiting your financial habits is advisable.
Exploring balance transfer or cash advance options can help recalibrate your financial course, but can also be used as leverage to earn rewards or a bit of passive income. It’s worth noting that interest charges from unpaid balances will definitely outweigh the value of earned rewards. Balance transfer and cash advance offers aren’t incentives for increased spending but serve as opportunities for debt repayment.
For those seeking advice on building credit, valuable resources are available in the articles provided by Milesopedia to understand how it works and the best ways to improve it:
For those well-versed in financial management and budgeting, credit cards evolve into tools for optimizing rewards, enabling you to:
If your primary aspiration revolves around accumulating substantial cash-back rewards, proceed directly to the 4th step.
Should your focus lie on accruing rewards for travel, it’s essential to define these objectives with precision. Unlike straightforward cash-back rewards, travel rewards encompass a multitude of options and avenues. Consequently, pinpointing the best credit card for travel necessitates meticulous consideration.
Selecting a credit card tailored for travel necessitates evaluating numerous factors. The following considerations guide your decision-making process:
The subsequent table encapsulates diverse travel goals and associated point types.
The possible redemption listed are only the most popular ones and usually the best way to optimize your points, there may be many other uses not mentioned. For more details, follow the links.
With travel objectives well defined, proceed to the next step.
Regardless of whether you’re chasing cash-back or travel rewards, points accumulation follows two paths:
A balance between these approaches optimizes rewards. While welcome bonuses offer substantial gains, long-term sustainability requires a blend of strategies. The impact of occasional new card applications on credit scores is less severe than commonly believed.
Our community often discusses the best credit card selection for upcoming “rounds,” as intermittent applications are common. For newcomers, gradual integration into this world is advised, considering this endeavour’s marathon-like nature.
Organic return refers to day-to-day reward earnings versus sporadic and ponctual sign-up bonuses.
Construct a comprehensive list of regular expenses by category. Each card boasts strong category accelerators, enabling precise earning maximization.
Simultaneously, budget establishment aids in curbing phantom expenses or refining savings goals.
The following example is a simple two-card cash-back wallet for someone who isn’t prepared to tackle credit card fees but still wants the maximum return.
In this example, you could keep your base product for your organic spending, the Tangerine World Mastercard, and benefit from an elevated return for those infamous ‘’other’’ categories for a few months with the CIBC Dividend® Visa Infinite* Card.
Then, for the rest of the year, you can earn more cash-back without having to pay any fees. When your time with the CIBC Dividend® Visa Infinite* Card, you can close it and spend the next year with the TD Cash Back Visa Infinite* Card to keep getting high returns.
Visa compatibility with Costco presents a unique opportunity. A $2,000 Costco gift card purchase yields a 10% return, a substantial increase from 1%. That way, you will be set for a while, and you’ll be in no rush to spend it.
Here is a simple base wallet example for general travel expenses (flights, accommodation, excursions, getting the best exchange rate, saving on foreign exchange fees, etc.); while it’s more difficult to avoid paying fees with these, they are considered the best credit cards for accumulating a lot of points on a regular basis. Furthermore, most of these cards come with annual travel credits or recurring promotional offers.
As this is a base wallet, you can add more products to cover all your specific needs and benefits you desire as getting points for ‘‘travel’’ can be very vague. For example, if you need a Nexus Membership for fast-tracking through the airport or if you need Marriott’s free night certificates because you often stay with the chain to enjoy your elevated status.
American Express Cobalt® Card
World Elite Mastercard from National Bank
The infamous other category never yields a generous return which is why I try to put those expenses exclusively towards unlocking a welcome bonus when possible.
Paying credit card fees can be a great investment. Indeed, most of them come with great perks that offset the fees partially or completely such as bigger rewards accelerator, travel credits, lounge access, purchase and travel insurance, free luggage, etc.
A comprehensive monthly expense list helps credit card selection for each category.
You can view our various guides here:
Prior to selecting the best credit card for you, it’s crucial to establish your goals (cash-back vs. travel and which type of travel) and evaluate your specific needs. Detailed comparisons of benefits, annual fees, and points conversion rates should guide your decision-making process.
It’s essential to remember that credit cards should be treated like debit cards. While enjoying the rewards, ensure you don’t fall into debt. The key is to spend wisely and live within your means. After all, the best rewards are peace of mind and strong financial health.
Ultimately, there isn’t one best credit card; instead, there’s a card that aligns best with your preferences and habits. Making an informed choice requires time, research, and a deep understanding of what each card offers.
In summary, if the question “What is the best credit card?” persists, it’s important to remember that the answer lies in a thorough analysis of your personal needs.
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