How to Determine the Best Credit Card | Important Classifications to Consider

In an effort towards simplicity, I’ve suggested to many of you the best credit cards.  I even just finished up a page on this site where I suggest the best hotel credit cards.  However, be aware that the biggest factor in determining the best credit card depends on which credit card basket you’re trying to fill.

Three Credit Card Classification Baskets

The Sign Up Bonus Basket

There are cards in my wallet that are only there because of the sign up bonus.

I wouldn’t care if it has a $10,000 annual fee as along as the fee was waived for the first year.  I could care less if it gave me one mile per 20 dollars spent.

The reason?  I’m only getting the card for the sign up bonus.  Once I’ve reached the minimum spend, I’ll put it away and probably never use it again (unless it is a Chase account, and then I’ll use my Chase appeasement strategy).

A current prime example is the British Airways Visa which has a 100,000 Avois bonus offer running.

The Earning Potential for Everyday Spending Basket

There are some cards that are in my wallet because I want to use them for purchases.  Why?  They offer the biggest earning potential.

Depending on your spending, this would include cards like:

  1. Chase Sapphire Preferred – 2 points per dollar spent on travel and dining out
  2. Chase Freedom - rotating categories with 5 points per dollar spent
  3. American Express Premier Gold – 3 points per dollar spent on air fare, 2 points on gas and groceries
  4. Starwood American Express – 1 point on everything that can later be transfered to airlines at a 1.25 rate if transfered in a block of 20,000.
  5. Ink Bold – A business credit card with bonus categories of up to 5 points per dollar spent.

The Benefits Basket

In addition to the other two types of credit cards, there are also the ones that a person might get simply for the benefits.  The bonus might not be much to sing praises about, nor does the card really reward you much for spending.  However, there is a certain benefit or bonus that makes card ownership worth the annual fee.

Sampel benefits options include:

  1. American Express Platinum - This is the quintessential benefits account.  It gives you US domestic airport lounge access when flying on airlines like American, Delta, and US Airways.  The card also offers a $200 airline credit and other benefits, including Starwood Gold status.  Here’s how I’ve justified having the card.
  2. There are several hotel credit cards that give status.  Samples include the Hyatt account which gives Platinum status, the Hilton American Express Surpass which gives a year of free Hilton Gold, the Priority Club account which provides you with Platinum status as long as you have the card, and the Hilton Citi which will give you Silver status.
  3. The Alaska Airlines visa offers a $99 companion pass each year you are a card member.

Once you’ve determined what you’re looking for, then you should easily be able to determine which is the best credit card for each basket or classification type.

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