The markets were down last week, with the S&P 500 having its worst 3-day drop since October. In case you’re wondering if you need to sell everything and hide, the index is still up over 15% year-to-date. Short-term fluctuations are just that, short-term. And the market is all about the long-term. This week the June jobs report will be released, and earnings reports will continue.
Questions also continue about credit cards. How do you decide on a credit card? Like many financial questions, it depends. You should always aim to pay off your credit cards in full each month. If you are looking at a large purchase you will need to finance over time, a zero-rate introductory period can be helpful. Be sure to make your minimum payment each month, and plan to pay it off in full before the introductory rate ends. And if you need carry a balance, look for a card with a low interest rate and zero annual fee.
If you’ll be paying off the card in full, then you can look at rewards and cash back. Consider your lifestyle: are there perks to having a card for a certain company beyond the cash back or rewards? An example would be an airline card that provides lounge access or free checked bags, or a theme-park card that gives you special access.
Most credit card rewards are valued at 1%. That is, you would receive cash back, store gift certificates, airline miles, or hotel points that are worth 1% of your spending. Cards that allow you transfer points to hotels or airlines for travel may have rewards valued as high as 3%. And some cash back cards may have bonus categories that give up to 5% cash back.
This all goes back to lifestyle. If you have the time and interest to track card offers and points and rewards, then by all means, keep up to four different cards and use them to earn the highest rewards possible. You may want one to maximize travel rewards, one to provide the bast cash back on groceries, and one at your regular gas station to receive discounts there.
If you just want an all-around good card, consider if you would like to travel with the rewards. If so, a good travel card that allows points to be transferred would be best. This may be a card like the Chase Sapphire or American Express that both earns rewards, provides airport lounge access, and gets you hotel and rental car elite status. Or an airline or hotel specific card. If you’re not into travel, a card that pays the highest cash back is your best option.
Two great sites to compare cards are bankrate.com and thepointsguy.com. Regardless of the card you choose, be careful not to overspend for the rewards. An easy example is paying with your card when there is a transaction fee. If you’re paying an extra 3% to earn 1% in rewards, you’re really losing 2%. And store cards can incentivize you to overspend to qualify for gifts with purchase, future discounts, and other perks you may not need.
Your action item is to change the air filter in your HVAC system. With the heat we’ve had, you want your system operating as efficiently as possible.
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