The Best Credit Cards You’ve Never Heard Of

The internet is often a great source of information.  In fact, these days it seems like it’s almost the only place to find information.  But there’s a real economy behind providing and distributing all that information, and consumers would do well to keep that in mind when looking for advice.
Credit cards are a perfect example, since there is big money in convincing you that certain cards are better than others.  This means that almost every site that makes credit card recommendations gets paid to regurgitate the marketing of card issuers, and they rarely tell you that their “Editor’s picks” or “best credit card recommendations” are actually sponsored by the credit card companies.  So you have to be on the alert for misinformation everywhere you turn.
Now that doesn’t mean that all sponsored credit cards are bad or that all credit card advice is flawed, just that there are often better cards out there, so make sure you do your research. Here I’m going to set the record straight on a number of credit cards that I feel too many websites recommend to users, and I’ll throw out some of my own recommendations for credit cards that outperform them, whether or not they pay big bucks.

Rewards cards

Instead of: Chase Freedom

Despite the claims of 5% cash back rewards, you’ll be hard-pressed to earn more than 1.5% to 2% rewards with this card.  The bonus 5% rewards only apply to quarterly rotating categories, which means you can’t earn maximum rewards year-round on everyday purchases like groceries and gas.  The bonuses are also capped, so you can only earn maximum rewards on $1,500 of spending over the months of Oct-Dec. You have to manually sign up online to get these rewards; it’s not automatic.

Check out: TrueEarnings Costco from Amex

You’d be better served with a card like the Costco TrueEarnings, whose 3% rewards on gas and restaurants, plus 2% rewards on travel are valid throughout the year.  Rewards are unlimited except for a $3,000 spending cap on gas, and it’s the only card that pays bonus rewards on Costco’s discount gas.

Instead of: Discover More
This card suffers from all the same problems as the Chase Freedom, except that it also tends to have lower caps on reward categories, limiting your bonus rewards even further.
Check out: Discover Escape / Fidelity Amex / Fidelity Visa
A better option would be the Discover Escape since it pays 2% cash back on all purchases, which you can redeem for travel purchases.  The $60 annual fee is more than made up for by the 25,000 bonus miles (or $250) you earn in the first two years.  If travel rewards aren’t your thing, take a look at the Fidelity Amex, which pays a no-bull 2% cash back on every purchase, deposited directly into your Fidelity brokerage or checking account. The Fidelity Visa offers the same deal only after spending $15,000.

Business cards

Instead of: Ink Bold from Chase
The first year is free and the card does pay a ton of bonus rewards–you’re eligible to earn more than 50,000 points the first year, and 47,500 every year after–but you also have to spend a ton of money to get them (more than $100k annually to get maximum bonuses).  And if you account for the $95 annual fee going forward, your reward rate maxes out around 1.4% and decreases the more you spend.
Check out: Ink Cash or Capital One Venture

Compare this to its cousin card, the Ink Cash, which charges no annual fee, pays 1% on all purchases, and pays 3% on bonus categories your business needs, like fuel, home improvement, dining, and office supplies. Another option is the Capital One Venture for Business, which pays 2% rewards in the form of travel credits you can apply against your account statement.  Plus the 15,000 mile sign-up bonus makes it well worth the $59 annual fee.

Poor Credit History Cards

Instead of: RushCard Prepaid Debit
The fee structure on this card makes it hard to accept Russell’s claims that he’s trying to empower the un-banked.  The “no monthly fee” version charges a $19.95 activation fee and $1 for every transaction (up to $10 per month).  It also costs 50 cents to check your balance at an ATM and $1.95 any time you don’t use the card in a 90-day period.  And since it’s a debit card, it doesn’t do anything to help your credit score.
Check out: Citibank Secured
Citibank Secured charges a $29 annual fee and no transaction fees, rather than the $120 that RushCard could cost you.  Plus, your initial secured collateral earns roughly 4% in interest annually, and you can be eligible for a non-secured Citi card after 18 months.  This helps users build credit, and is a feature that RushCard can’t offer.