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The best credit card for your spending style

January 29, 2010 12:00:00 AM PST
What type of credit card user are you? Are you a splurge spender who likes to get rewarded with airline miles, or are you a sensible spender looking for cash back rewards, or are you a reckless spender who doesn't pay off their balance each month?Different kinds of credit cards cater to different kinds of spenders. Consumer Specialist Ric Romero advises on which one is best for you.

"I learned for several years to live on cash," said Jill Hankoff.

Although cash is the best method of spending, in this day and age, we usually need some sort of credit card to rent a car or to shop online. So if you're going to have one, which type would you prefer?

Earning airline miles with a credit card is a very popular choice, and one of the best cards for that right now is Citi Visa Forward card. You get a sign up bonus of 6000 points after spending $250 within three months. There is no annual fee and the interest rate is fairly low at 14.24 percent. Another favorite is the Bank of America Alaska Airlines Visa. The sign up bonus is 20,000 miles, and you earn three miles for every dollar spent, but there is a $75 annual fee.

But maybe you prefer to earn money while spending your money. If so, then you need a card with good cash rewards such as the Bank of America Cash Rewards Visa. Spend $25 and get a bonus of $50. There is no annual fee and interest is as low as 12.99 percent. There's also the Chase Freedom card with $50 cash back after the first purchase with three percent cash in rotating categories. Also, there's a zero percent introductory rate and no annual fee.

Unfortunately, many consumers have no trouble spending but do have problems paying off the balance on their credit card each month.

"I wanted to pay them, but I just didn't have the money," said Lorena Peters.

Two cards for consumers like Lorena are the U.S. Bank Visa Platinum and the Wells Fargo Secured Visa.

With good credit, the U.S. Bank Visa Platinum offers zero percent interest for 12 months and 9.9 percent after that, and the annual fee is $40. With not so good credit, the Wells Fargo Secured Visa is the answer. The interest is below most secured cards at 18.99 percent, and there is a low $18 annual fee.

Remember, credit card offers can change rapidly, so many deals mentioned in this report could be gone. But there is a free online service called Billshrink that can help you with your credit card selections and also assist you in avoiding getting hurt by a credit card company's fine print.