Many credit card issuers offer cards with generous 0% APR promotions that let you either finance a large purchase or consolidate and pay high-interest credit card debt interest-free for a certain period. While the interest savings are nice, the downside is that the best 0% APR cards usually don’t offer rewards, giving these cards limited ongoing value after the o% promotion is up.
Paying down your debt is more important than earning rewards in most cases. But if you want long-term value out of your credit card beyond the introductory 0% APR promotion, there are plenty out there that offer great rewards to offset slightly less favorable borrowing terms.
Best for a large purchase: Discover it®-New! Double Cash Back your first year
5% cash back in quarterly rotating categories that include department stores, Amazon.com and more’ 1% cash back on all other purchases. For a limited time, Discover will double all the cash back you earn in the first year. Intro APR of 0% on purchases for 10 months and 0% on balance transfers for 10 months, and then the ongoing APR of 10.99% - 22.99% Variable. Free access to your FICO score. No foreign transaction fees. Balance transfer fee of 3%. $0 annual fee.
Benefits of the Discover it®-New! Double Cash Back your first year:
- If your big-ticket item belongs to one of the current 5% bonus categories on the Discover it®-New! Double Cash Back your first year, you’ll earn big rewards and get extra time to pay it off interest-free. Plus, the Discover it®-New! Double Cash Back your first year is currently doubling the cash back you earn at the end of your first year, which means you’ll earn rewards on your purchase long after you make it.
- Discover Deals offers another opportunity to maximize your rewards. You’ll get access to exclusive online and in-store offers that can net you an extra 5% to 20% cash back.
Drawbacks of the Discover it®-New! Double Cash Back your first year:
- Discover isn’t as widely accepted as Visa and MasterCard, especially internationally.
- You may be stuck with a low rewards rate if your ongoing spending doesn’t align with the card’s 5% bonus categories.
The bottom line:
While the 0% APR promotion period on this card is short compared with some of the other cards discussed here, it makes up for it by offering plenty of ways to rack up rewards. If you’re looking to make a large purchase and you don’t need longer than what the card offers to pay it off, this is the card for you.
Best for a balance transfer: Blue Cash Preferred® Card from American Express
Get $150 back after you spend $1,000 in purchases on your new Card in your first 3 months. You will receive $150 back in the form of a statement credit. Earn 6% cash back at grocery stores up to $6,000 spent annually (then 1%), 3% back at gas stations and select department stores and 1% back on all other purchases. 0% on Purchases for 15 months and 0% on Balance Transfers for 15 months, and then the ongoing APR of 12.99%-21.99% Variable. Free access to your FICO score. Balance transfer fee of 3% or $5, whichever is greater. $75 annual fee.
Benefits of the Blue Cash Preferred® Card from American Express:
- The Blue Cash Preferred® Card from American Express offers stellar rewards for everyday purchases; no need to fit your spending to ever-changing bonus categories.
- You’ll earn a decent sign-up bonus, which can help offset the balance-transfer fee.
- Access to Amex Offers, where you can receive statement credits when you shop at featured retailers.
Drawbacks of the Blue Cash Preferred® Card from American Express:
- It has a $75 annual fee, although you’ll need to spend only $25 per week at grocery stores to make up for it.
- It charges a balance-transfer fee, which can be expensive if you’re moving a large balance.
- American Express isn’t as widely accepted as Visa and MasterCard, especially internationally.
The bottom line:
If you spend a lot on groceries and gas, this card is hard to beat. But if your monthly grocery and gas bills are low, you may be better off with the Blue Cash Everyday® Card from American Express. While it offers lower rewards, its annual fee is $0 and it has a comparable 0% APR promotion. If you’re looking for a balance-transfer credit card with no balance-transfer fee, check out the Chase Slate®.
Best for ongoing cash back: Citi®Double Cash Card
Earn 1% cash back per dollar spent, and another 1% back when you pay your balance. 0% for 15 months on purchases and balance transfers, and then the ongoing APR of 12.99% - 22.99% Variable . Free access to your FICO score. Balance-transfer fee of 3% or $5, whichever is greater. $0 annual fee.
Benefits of the Citi®Double Cash Card:
- It’s one of the only credit cards that rewards you for spending and paying off your balance.
- You’ll get a flat rewards rate, regardless of where you spend your money.
- It has a $0 annual fee.
Drawbacks of the Citi®Double Cash Card:
- Bonus categories with higher rewards rates provide an opportunity to earn more cash back.
The bottom line:
There’s not much to complain about with the Citi®Double Cash Card. It offers the highest ongoing rewards rate among cash-back cards and has a solid 0% APR promotion.
Best for travel: Discover it® Miles-Double Miles your first year
Exclusive Double Miles Offer: At the end of your first year—when other Miles cards charge an annual fee—Discover doubles all the Miles you’ve earned.. Unlimited 1.5 miles per dollar spent on all purchases. 0% on purchases for 12 months and 10.99% on balance transfers for 12 months, and then the ongoing APR of 10.99% - 22.99% Variable. Free access to your FICO score. No foreign transaction fees. Balance transfer fee of 3%. $0 annual fee.
Benefits of the Discover it® Miles-Double Miles your first year:
- The Discover it® Miles-Double Miles your first year has a high ongoing rewards rate for a travel card with a $0 annual fee, especially considering its offer to double your miles your first year.
- You’ll have access to Discover Deals, where you can earn even more miles for your purchases.
- You’ll get reimbursed for up to $30 in in-flight Wi-Fi fees every membership year.
Drawbacks of the Discover it® Miles-Double Miles your first year:
- Discover isn’t as widely accepted as Visa and MasterCard, especially internationally.
- If you’re a big spender and you don’t mind an annual fee, other travel cards offer better rewards.
The bottom line:
If you want a travel card with flexibility and need some time to pay off a large purchase or a transferred balance, you can’t go wrong with the Discover it® Miles-Double Miles your first year. If you’re planning to travel overseas, however, keep a Visa or MasterCard as a backup.
Best for small businesses: SimplyCash® Business Card from American Express
Limited Time Offer: You can get a $250 statement credit after you spend $5,000 on qualifying purchases on the Card within the first 6 months of Card Membership. 5% cash back at office supply stores and on wireless telephone services purchased directly from service providers, 3% back on the category of your choice from a list of select categories and 1% back on other purchases (5% and 3% apply to purchases up to $25,000 annually). 0% on Purchases for 9 months, and then the ongoing APR of 12.24%-19.24% Variable. $0 annual fee.
Benefits of the SimplyCash® Business Card from American Express:
- Unlike other business credit cards that offer bonus categories, the SimplyCash® Business Card from American Express lets you choose one of your bonus categories to more easily fit your business expenses.
- You’ll have access to American Express OPEN, with features including an online bonus mall where you can score discounts on business purchases, free access to ReceiptMatch with QuickBooks and a forum where you can learn from other small-business owners.
Drawbacks of the SimplyCash® Business Card from American Express:
- Its 0% APR promotion doesn’t include balance transfers.
- It has spending limits on its bonus cash-back categories, which can be a huge disadvantage if your business has a lot of ongoing expenses.
The bottom line:
The SimplyCash® Business Card from American Express is a solid enough business credit card for the rewards alone, so it’s nice to have the extra perk of a 0% APR promotion. The promotion period is relatively short, however, so make sure you can pay off the balance before it’s over.
Ben Luthi is a staff writer at NerdWallet, a personal finance website. Email:bluthi@nerdwallet.com. Twitter: @benluthi.
Image via iStock.
No comments:
Post a Comment