Credit cards

According to The Bogleheads' Guide to Investing, the financially sound use of credit and debit cards takes advantage of the convenience such cards can provide, as long as one always pays the balance due each month, avoiding interest charges. Some credit cards provide programs that rebate a percentage of purchases back to the cardholder. The following tables provide information on credit card cash rebate programs for selective credit card issuers.

Caveat: These tables are intended as examples to show the variations among card issuers. They are not recommendations. Read all of the Terms and Conditions in the card issuer's agreement, as exceptions can be subtle and potentially influence a decision.

Gas/Groceries

Name	Issuers	Annual Fee	Cash Back Categories							Notes
			Gas	Groceries	Restaurants	Entertainment	Airlines	Hotels	Everything
Blue Cash Preferred	American Express	$75	3%	6%	—	—	—	—	1%	Also gives 3% on Department Stores
Blue Cash Everyday	American Express	—	2%	3%	—	—	—	—	1%	Also gives 2% on Department Stores
Visa Platinum Cash Rewards	PenFed	—	5%	—	—	—	—	—	1%	Cash is automatically credited each month
"—" denotes that there are no bonuses beyond Everything.

Everything Else

Name	Issuers	Annual Fee	Cash Back Categories							Notes
			Gas	Groceries	Restaurants	Entertainment	Airlines	Hotels	Everything
Fidelity Rewards American Express	FIA/Bank of America	—	—	—	—	—	—	—	2%	Must open a Fidelity Account for 2% lower tier redemptions
Capital One Venture Visa	Capital One Bank	$59, waived first year	—	—	—	—	—	—	2%	Must use cash back against travel expenses for full 2% redemption $250 cash back bonus after spending $1,000 in three months
Fidelity Rewards Visa	FIA/Bank of America	—	—	—	—	—	—	—	1.5%	Must open a Fidelity Account for maximum lower tier redemptions 2% on purchases above $15,000
NGFCU Cash Rebates Mastercard	Northrop Grumman	—	—	—	—	—	—	—	1.5%
"—" denotes that there are no bonuses beyond Everything.

Rotating cash back categories

Several card issuers offer cash back cards whose categories rotate periodically. For example, Discover offers 5% cash back on categories which vary as follows:

• January through March: Travel and Restaurants
• April: Jun Home and Fashion
• June: Grocery and Drug Stores
• July through September: Gas, Hotels, Movies and Theme Parks
• October through December: Restaurants and Fashion

The idea is to obtain cards from several issuers, then optimize your spending pattern which maximizes the cash reward. For example, use the above Discover card for grocery purchases in June and a different card for everything else.

While using multiple cards seems tempting, there are a number of considerations which may dissuade card holders from this approach:

• The effort needed to track multiple cards is significant.
• It's easy to forget a payment or lose a card. The problems resulting from such an oversight will quickly ruin any savings you might have earned.
• Opening multiple credit card accounts can help your credit score, but this technique may backfire and lower your score.
• Card issuers often coordinate their categories (similar categories during the same time period), which results in minimal benefit.
• Cash back categories have spending limits. Spreading purchases over several cards to avoid these limits is complex to track.

Credit report

The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months.

A credit report includes information on where you live, how you pay your bills, and whether you've been sued, arrested, or filed for bankruptcy. Nationwide consumer reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home.

• AnnualCreditReport.com, enable browser cookies

AnnualCreditReport.com is a centralized service for consumers to request free annual credit reports. It was created by the three nationwide consumer credit reporting companies - Equifax, Experian and TransUnion - and is the only service authorized for this purpose.

External links

• AnnualCreditReport.com, enable browser cookies
• Your Access to Free Credit Reports, from the from the Federal Trade Commission
• Rotating 5% back categories for Credit Cards, forum discussion
• Looking for Cash Back Credit Card, forum discussion
• How Many Credit Cards Should You Have?, from Investopedia

Investopedia links

• Credit Card Tutorial
• Understanding Credit Card Interest
• Everything You Need to Know About Credit Card Rates
• Six Major Credit Card Mistakes
• 7 Tips For Closing A Credit Card
• 6 New Credit Card Regulations That Benefit You
• Breaking Down Credit Card Fine Print

Link to this article from your Bogleheads forum post Copy the line below into your Bogleheads forum post: Wiki article link: [url=https://www.bogleheads.org/wiki/Credit_cards]Credit cards[/url]