Pick Your Plastic: How to Choose the Right Credit Card

There are lots of good uses for the seemingly dozens of credit card offers most people get in the mail every week. You can construct a small shrine to spending with them, arranging the envelopes artfully amidst candles and incense. That’s probably a fire hazard, though. You can also scrawl grocery lists on the back. Or you can do my personal favorite, taping the offers to a brick, writing “return to sender” on the envelope, and sticking them in the mailbox.

Rather than signing up for any old card that comes in the mail, take the chance to evaluate how you’re going to use the card, which rewards will be best for you, and any hidden fees or gotchas that may be nestled amongst the fine print. Here are a few great cards for different types of spenders.

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For the Small Business: American Express Costco TrueEarnings Card
If you’re an owner of a small business or work for yourself, you’ve got your own unique spending patterns. Perhaps you’re picking up 48-packs of paper towels at Costco before flying across the country for a conference. (Who isn’t, right?) This card could be a great option for you. It rewards spending on flights, restaurants, and gas, and Costco members get it free.
APR: 0% for 6 months, then 15.24%
Pros: 3% cash back on gas and restaurants, 2% on travel, 1% on everything else. No annual fee if you’re a Costco member.
The Fine Print: After you spend $3000, the cash back on gas goes down to 1%

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If You Want a Free Flight: AirTran Airways A+ Visa
In these days of bankrupt airlines, signing up for an airline credit card can be a bit risky. You run the chance of booking your free flight and showing up at the check-in counter, only to find the flight attendants packing up for a little permanent vacay.
These cards are still a good way to get a free flight, though, if you play your cards right. The strategy: get the card, spend enough to get the rewards points, take the free flight, cancel your card. It’s as easy as that. This AirTran card will let you earn that free flight fast, so you can get your reward and move on.
APR: 0% for the first 6 months, then 15.24% or 18.24 depending on your credit score; $49 annual fee
Pros: Earn enough credits for a free one way flight, if you spend $750 within 90 days of opening the card.
The Fine Print: You can incur a 30.24% penalty APR if you pay late, go over your credit limit, etc.

If You’re Not a Big Spender: Capital One No Hassle Cash Rewards
The problem with a lot of rewards cards is that you can’t expect to actually feel rewarded until you’ve spent upwards of $5,000 with your card. Since I’m just using my card to buy groceries and the intermittent piece of consumer electronics, it’s not ideal for me to have one of these big spending cards. If you’re in this category too, you probably want a card that rewards you for purchases no matter what you spend, and that doesn’t nickel and dime you with lots of hidden fees. Like this Capital One card, for instance.
APR: 0% until November 2011, 11.9% after
Pros: 2% cash back at groceries and gas stations, 1% elsewhere; no annual fee; you may request your cash back whenever you want
The Fine Print: There is a 29.4% penalty APR.

Joy Paley is a guest blogger for Pounding the Pavement and a writer on the subject of becoming a nail technician for the Guide to Career Education.

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