If you're looking for the perfect credit card, don't just focus on the interest rate: It's the perks that make the difference.
On "The Early Show" Monday, Lynnette Khalfani-Cox, author of "Perfect Credit" and founder of the free financial advice blog "Ask The Money Coach," spotlighted cards she says are the best for your lifestyle, in large part depending on which stage of life you're in.
Khalfani-Cox says most people just look at the interest rate right off the top when selecting a card. But, she points out, you really have to go well beyond that in choosing one. You have to think about how you'll actually be using the card in your life. What benefits will you be getting? What does it have to do, or does it fit with your lifestyle? Do you have to pay off the balance all at once, or can you pay it down from month-to-month? All these things are important to pay attention to, given where you are in life.
You really want to make a great start to your credit in terms of managing your debt wisely, and you don't want to get into the habit of using it solely for convenience. The first thing to do is to separate your needs from your wants. So, when you're looking for the right card, it pays to think, "What can I reasonably pay off every single month? Am I going to be using this on beer and pizza runs or on furniture, electronic and travel?" Think about the long term effects of your charges, so you don't rack up debt.
I recommend three:
The first is the Orchard Bank Classic Mastercard. It has a low APR (a variable rate of 7.9 percent), and a lot of great features to keep you on track. The card offers e-mail and text message reminders to pay your bills and stay within your credit limit, regular credit bureau updates that enable college grads to build credit quickly. and customer service by phone and the web that enables grads to track purchases and maintain a budget.
The second one I'd recommend is for people who are trying to furnish their first apartment. I's the SONY card from Capital One. It's great because you get the maximum bang for your buck in terms of spending. First, you get a 0 percent APR for up to 10 months, which is great to start with. Any electronics or gadgets you buy earn you bonus points, so it's great for a young adult who wants to buy a new entertainment center, and you get extra bonus points on any SONY purchases.
The third one is really for the college grad who's interested in going out there hitting movies, dining out a lot and generally being social. The CITI Forward card is good for that, since you earn bonus rewards points wherever people congregate socially -- like bookstores, restaurants, etc. If you go out and charge those expenses on the card, you're automatically maximizing its value in points. In addition, if you go paperless and sign up for online bill payments, you get extra points. The rewards points can then be used at the same places you're going out. Not only will they give you coupons to those places, but discounts, as well.
Anybody who recently got married knows getting married is super-expensive. The average wedding in the U.S. costs about $25,000 and, more often than not, a lot of people who walk down the aisle put their wedding tab on their credit cards. You don't want to start out your married life with big financial bills that can lead to arguments and even worse. I would emphasize choosing cards that give you plenty of time to pay off your bills.
I recommend two:
The Discover More card is great because it does two things. First, if you want to use if for the wedding expenses themselves, you have an automatic 6-month 0 percent APR on all new purchases. If, however, you used a different card and didn't have this one, you can do a balance transfer to it and for 18 months, you'll get a 0 percent APR, so you have a year-and-a-half to pay off the photographer, reception, limo rental, you name it. It gives you a lot of time to pay off your balance.
If you're eligible for the PenFed Promise Visa card, it's another great one for newlyweds for a number of reasons. Top qualify, you must be a United States Government employee, member of the United States Military and Uniformed Services, employee or volunteer of the American Red Cross, member of the National Military Family Association, or a family member/housemate of a current PenFed member. First, it's a credit union offer, which is credit owned and operated by its members. So, if you don't qualify for this one in particular, you should look into other credit union offers that you do qualify for. With the average credit card rate at about 15 percent, the PenFed Promise Visa card offers an APR of 7.49 percent for all purchases, and if you do a balance transfer, offers a 4.99 percent APR, which lasts for three years. The other big thing about this card is that you're not going to get nickled and dimed using it. It has no late fees, additional fees or annual fees. It's a really good card for people who are tired of big banks who charge additional fees on regular activities. For couples who are just starting out, invariably, there are things that you have to buy for your house that you don't get off of your registry in the first couple of years, and this will give you a 3 year time period to pay things down with a low APR. It gives you a good head start.