Let's face it: We've been spoiled by our credit cards. A low interest rate and no annual fee aren't enough anymore. We've come to expect cash back on our purchases, free airline tickets and upgrades on hotels and rental cars.
But getting a good deal still isn't easy. Which deals are best for you depends on how much you charge, whether you travel a lot and whether you carry a balance.If you often carry a balance, for example, you can use three basic strategies to save on interest charges:
1. Get one low-interest-rate card and use it for everything.
2. Get a card with a low introductory rate and use that card until the teaser rate expires, at which point you transfer your balance to another low-teaser-rate card.
3. Get a rebate card and a low-interest-rate card. Use the rebate card to make purchases, then transfer the balance to the low-rate card.
The first strategy is the simplest. If you want to pursue the other strategies, be forewarned: Some teaser rates apply only to new purchases, and some apply only to balance transfers.
The lowest-rate card recently - not including teaser rates or cards with special offers for the most credit-worthy customers - was the Pulaski Bank & Trust Visa or MasterCard (800-980-2265), at 7.99 percent. But it's tough to get, and it carries a $35 annual fee.
A better bet is the AFBA Industrial Bank Visa or MasterCard (800-776-2265), which has a fixed 8.5 percent rate for six months, then a variable rate of prime (recently 8.5 percent) plus 2.9 percentage points. The card has no annual fee, and it offers a 5 percent rebate on some travel expenses charged to the card. About one in three applicants qualifies.
If your balances are high, consider the Wachovia Prime for Life Visa or MasterCard (800-716-3000), which promises to give you the prime rate on all purchases forever. But this card has an $88 annual fee, which makes it comparable to a 17.3 percent rate on a $1,000 balance, but 9.2 percent on $12,000.