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August 23, 2007


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I am planning to apply for a credit card online. Can you suggest what are the best credit card to apply?

And if the applicant is from outside United States, is there any chance that the applicant will be approve?

We have a great cash back reward card that we love, we put absolutely everything on it expect the mortgage...(I wish our company would let us!!!) We get a nice chunk of change back every January. They pay you to spend as you usually would. I love it!

JEM --

What card is it?

I have 2 cards that I primarily use. One is a cash back card for gas, groceries, and drugstore purchases (5% cash back, chase cash plus rewards, sorry no new applicants) and the other is a citi professional card (3% rewards towards gift cards for restaurant, office supply and rental car). Both have 1% on all other purchases.

I have a Citi Dividend Platinum Select card that I LOVE. No annual fees, plus I get cash back on everything I buy. I've probably racked up around $300 this year so far. You get 1% on every purchase and up to 5% at a grocery stores, gas stations, and any one of the dozens of special parters a la Target, Barnes & Noble, etc. You can request a check anytime online, and they mail it to you within a week or so. I got approved for the card with minimal (or perhaps even zero) credit while I was in college, so they can't be that hard to get.

Meg --

I think you can do better. Here's what I found on that card:

"Earn 5% cash back at supermarkets, drugstores, gas stations, convenience stores and utilities including cable for 6 months, and 2% thereafter. Plus, 1% cash back on other purchases with this credit card. Also enjoy no annual fee1, travel benefits and much more."

The 5% is for 6 months only, then it's 2%.

Then, there's this:

"With the Citi Dividend Platinum Select MasterCard you'll earn a little extra cash back on every purchase, up to $300 a year."

You're limited to $300 a year.

For a better option, see this post:

I hate to point this out (and hate even more to point this out a day or so late) but those cash rewards are contributing to higher prices for everyone, including you.

Money for the rewards, be they cash, miles, or something else, all come from a fee the banks charge merchants called the Interchange fee. Merchants would like to be able to offer cash discounts/credit surcharges, but the nature of the fee makes it too complex to account for at the register -- I know, I consult for a merchant group on this issue.

I don't expect you to give up your cards and I don't think you're doing the wrong thing -- but I would argue they're not as great for you as you might think, and they're certainly part of the problem at the macro level.

What is your solution? Mine is to earn as much cash back from my credit card purchases as possible. As well as shopping through fatwallet or ebates.

I haven't been paying enough attention to this. Right now I use my Citi Dividend for almost everything. I think I have to spend some time on this. Thanks for the post.

Problem is I have to do the research on my own since I don't really trust those "best reward card" sites.

I've been using a Chase rewards one for both my wife and I. We net about $1000 tax free each year; posted a few weeks ago on tips and what we do with the money each redemption. The kicker now is that I'm embroiled in a dispute where they're trying to hit me with a late fee after cutting the billing cycle by over a week without informing me (travel, pay bills twice a money, hello!).

Dan --

If you're making that much, then you're charging a ton. And if you're charging a ton, the Chase card isn't the best for you. I have a post coming up on Monday that compares the Chase Freedom card with the Amex Blue at various spending levels. Be sure to check it out -- I think you'll find it interesting.

I just took your advice and have applied for both of these credit cards. I've stayed away from credit cards since I'm awful with late payments, but my bank of america keep the change on my debit account just isn't adding up as fast as these cash reward credit cards might. I'm going to give them a try if I get approved. At the very least, I've been meaning to get a credit card to use for gas only, so I could get some cash back on my gas purchases. Since gas costs a fortune in the Bay Area, that would be schaweet.

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