The Best Credit Cards of 2011
Some people argue that one credit card is as good as another. I mean if the card works, then what else is needed, right? But this is a 2010 mindset. In 2011, the banks and card-issuing companies learned that the consumer is savvier than they used to be. In today’s internet dominated world it is too easy to shop around and compare different offers. Consequently, card issuers have started to compete with one another when it comes to the terms of their credit offerings.
In any discussion of the best credit cards of 2011, it is important to realize that great credit card offers are only generally available for a limited time. Credit card companies offer super deals to new customers for the sole purpose of bringing in new clients, yet those superior deals often expire quickly. When reviewing credit card offers from last year, we have tried to weight our ratings toward offers that are still around, yet some offers were too good to ignore. So we have compiled a list of five categories with offers that we hope will be back in 2012. If such offers do hit the market, creditsense.com will definitely let you know.
We have compiled a list of five categories with offers that we think will be back in 2012. If they do CrediSense will be all over them.
1. Best Cash Back Card
There were a ton of cash back offers this year. Credit card companies know what buttons to push to get consumers interested in a deal. But we liked the Chase Freedom Visa for a few reasons.
- 5% cash back. This is the hurdle rate of cash back for this category. In other words, if a card didn’t offer 5% cash back they were excluded from the race. The great thing about this card is that you start out with a broad range of cash back categories.
- $200 bonus cash for signing up. Some other cards offer points, miles, or make you jump through purchase minimum spending hoops. Chase Freedom gives you $200 cash, and nothing trumps cash.
- Expanding cash back categories. The Chase Freedom MasterCard starts out with a decent range of categories but then expands your cash back categories every 3 months to keep you using the card. This may come as a surprise, but most cash back offers are limited to a very short list of categories like gas or dining. We like this card because they keep trying to earn your business by expanding the list every 3 months to a larger group of categories like department stores, movie theaters, and even charitable donations.
- 10% cash back on online purchases. Naturally this cannot be applied to every online purchase, but they do allow it on several online stores such as Kohl’s through their website.
2. Best Travel Rewards Card
It’s sad to say, but this is one of those offers that was only around for a limited time. This probably deserves the award for Card of the Year. So if you didn’t get it, you’ll have to settle for the current offer of 25,000 Rapid Rewards Points, or wait for it to come back around in 2012—and we’re confident it will. Here’s what was so great about it:
- 50,000 Rapid Reward Points. Several cards granted 50,000 points but they generally required that you spend at least $3,000 in 3 months before you received the points. The Southwest Rapid Rewards Card gave you the points after your first purchase with no minimum.
- 2 free flights. This was the kicker. This card also offered enough points for 2 - 5 flights within the continental U.S. when you signed up for the offer. Today's offer is 1 - 2 free flights which isn't so bad.
Honorable Mention
The Chase Sapphire jumps the hurdle with a 50,000 point award. Even though it requires that you spend $3,000 in the first 3 months of owning the card, it does add a couple of bonuses that make it one of our favorites:
- Use 20% fewer points when you redeem points for travel through the ultimate rewards website. In other words, a flight that would cost you normally 50,000 points only costs you 40,000 points when redeemed through the ultimate rewards site.
- Additional points earned when booked through Ultimate Rewards.
- 2 Points per dollar spent on travel including hotel and car rental.
- 2 points per dollar spent on dining. This includes fast food and fine dining.
- 7% Annual points dividend on all new points earned even if they are redeemed already.
- No foreign transaction fees when purchasing anything outside the United States.
- Transfer points from other programs at a 1:1 ratio.
- 24/7 direct access to expert service advisors with no voice recordings.
If you missed the Southwest Rapids Reward card the Chase Sapphire is a darn good card for those who like to travel.
3. Best Balance Transfer Card
Citi Dividend World MasterCard
Once again we had to set a hurdle rate to narrow the field. In this case we decided that the winning card should allow a transfer at 0% APR for a minimum of 1 year. Additionally, the rate after one year had to be a reasonable rate as well.
The Citi Dividend came out the winner with a couple of really cool features.
- 0% on all balance transfers for 15 months. This is a very decent time frame. I’ve seen better, but rarely.
- 12.99% after 15 months. The APR can go as high as 22.99% if you don’t have good credit, but if that’s the case, there may be better cards for you anyway.
- $100 cash back after $500 in purchases. You have the normal 3 months to earn this cash back, which doesn’t win any awards, but not bad.
- 5% cash back on most purchases. This includes the normal items like department store, clothing, electronics, and toy store purchases.
- 1% cash back on all purchases.
- No annual fee.
4. Best Student Card
It was a combination of traits that won us over on this one. It wasn’t that this Discover Card had one particularly amazing aspect, it was more about having really solid traits across every category.
- $25 cash back. This is a great deal because there is no minimum purchase required to get the cash back. It only requires that you make a purchase within 3 months. If this doesn’t appeal to you, you can opt for 9 months 0% APR instead. So it really just depends on what you need.
- 0% APR on purchases for 6 Months. We like this because it gives you the option of extending this period to 9 months if you don’t take the $25 cash back.
- 5% cash back. There are cards that offer broader categories, but like I said, this is fairly strong across several categories. The cash back is pretty broad. It applies to travel, gas, groceries, restaurants, home improvement stores, and more. But of course, limitations apply.
- 20% cash back when you buy online through Discover.com.
- 1% cash back on all purchases.
- $0 fraud liability. We have written about this aspect before but it is still a nice deal.
5. Lowest Fee Card
Yes, so it’s a Chase Freedom Card. But hasn’t Lions Gate Films produced a couple of winning films in the same year? Way to go Chase. The criterion for this category was three-fold. First, it had to have no annual fee. Second it had to have a 0% APR on balance transfers. Third it had to have a very low APR after the balance transfer period had ended. The Chase Freedom Card wins in all three categories.
- No annual fee. This one is simple—either you have no annual fee or you do. Chase freedom has no annual fee.
- 0% APR on balance transfers for 12 months.
- 0% APR on purchases for 6 months. The combination of 0% APR on both purchases and balance transfers made the case for the low fee award. It probably would have been enough to win the award, but wait there’s more.
- 9.99% APR on approval. Ok they are not going to give this to everyone. But rarely do cards offer a rate that is this low to anyone. So if you have the credit, and are looking to save some money, then this is a great card for you.
That wraps up our awards list for the Best Cards of 2011. And as with any “best of” list there are bound to be some ambiguities and some debate. I know I have always felt like I know the top 100 songs of all time better than any magazine. So please feel free to chime in if you have any thoughts.