What Makes A Credit Card Worth Signing Up For

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credit card money
Credit inquiries are very valuable, so it’s important you only use them when a credit card is worth it. That can mean a number of things. You could want a credit card for a frequently shopped store, a card without an annual fee, or a credit card with a high sign-up bonus.

Store Credit Cards
As I mentioned the other day, these cards can be very useful if you’re a loyal shopper. For example, most of these cards give you 5% off or 5% cash back at the card’s respective store. Most of the time there is no other card that will give you 5% at that store (Target), so let’s take a look at 5% vs 1% spending if you have a store card. Keep in mind that this table doesn’t take member-only events into account. So, your profit could be higher than laid out below.

CardReward Percentage$500 Spent Earnings$1000 Spent Earnings$2000 Spent Earnings$5000 Spent Earnings
Store Card5%$25.00$50.00$100.00$250.00
Regular Card1%$5.00$10.00$20.00$50.00

As you can see, after spending $5,000 total with a store credit card you basically make a $200 sign-up bonus (long after signing up). That isn’t a terrible bonus, but you can do better. If you expect to spend $5,000+ at a single store over time, it may be worth getting a store card.

Annual Fees
There are some great no annual fee cards available (Discover It, Chase Freedom, ect.). So, if your only requirement is no annual fee, you’re in luck. These cards even come with $100-$200 sign-up bonuses and offer 5% cash back in certain categories throughout the year. Chase Freedom usually has a $200 sign-up bonus around the winter holidays, which makes it a great time to sign-up for that card! (That is an affiliate link. Thank you for your support.)

Sign-Up Bonuses
This is one of the most important factors I take into account when choosing what credit cards to get. If a credit card has a larger sign-up bonus for a limited time, it will usually become my first choice on my next churn (i.e. Chase Ink Plus or the Southwest cards currently). A big sign-up bonus usually goes hand in hand with exceptional credit cards perks.

Credit Card Perks
Many cards offer return protection, no foreign transaction fees, extended warranties, and much more. Depending on your current needs (i.e. traveling out of the country), it may be important to look at what perks a credit card offers.

Order Of Importance
I sign-up for credit cards based on this criteria (this is solely my opinion, so your order of importance will likely vary significantly).

  1. Sign-up bonus – I want to earn a lot of miles points or cash back to justify a hard inquiry. They are worth a lot to me!
  2. Annual Fee – If I’m not getting a grand sign-up bonus, I will sign-up for a card without an annual fee that earns some grand rewards. Chances are, though, that the no annual fee card will have some sort of sign-up bonus even if it is only $100.
  3. Store Credit Cards – I only have one store credit card; Amazon’s. If I were to go back in time, I would’ve skipped that card though. Buying Amazon gift cards at Staples with my Ink Bold is much more profitable.
  4. Credit Card Perks – I’ve never signed up for a credit card just because of its perks. Usually, these perks come with every card, which makes it very low on my priority list to get a card with great perks.

What do you look for in a new card?

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