Best Credit Cards: Airline Miles and Low Interest
Welcome to the latest installment of The Best Credit Cards in America. In this edition, I’m giving awards for the Best Airline Miles Credit Card and the Best Low Interest Credit Card in America.
The category winner is the card that scores the highest number of points based on a unique, 41-factor formula that I designed. The formula gives each card a “benefits/rewards score” and then subtracts the “costs score.”
Since the holidays are almost here, I decided it’s the perfect time to look at credit cards that offer airline miles. I know that many folks will be jetting off to see family and friends. And I know some of you travel for a living so earning miles is very important. So for all of you frequent fliers out there, I’ve reviewed dozens (and dozens) of credit cards that let you redeem airline miles for flights.
I looked at cards that had annual fees below $100 (although I looked at one card that had a $175 fee just to make sure I didn’t miss a steal). The elite cards do have some amazing perks but they charge steep annual fees as well. I wanted to keep this affordable for the average consumer.
The upcoming holidays and the still-rocky economy got me thinking about low interest credit cards. I always tell folks that it’s a good idea to have a low-interest card on hand for cash-flow emergencies. You can have a rewards card to earn points, cash back, or miles, but you don’t ever want to carry a balance with a rewards card because the interest rates are usually on the high side.
So I also took a look at credit cards with the lowest ongoing interest rates (also known as the APR). If you have to carry a balance, a low interest rate credit card is a nice thing to have in your back pocket.
Okay, so let’s take a look at the winners and find out what makes them so amazing.
The Best Airline Miles Credit Card in America
The Winner: Chase Sapphire Preferred Credit Card
This card has a lot to offer and it begins with a terrific sign-up bonus. Let me just say that if you fly frequently, you’ll love the number of miles you can accumulate with this card. You also get to enjoy speaking with a real live person when you call the 24/7 concierge service.
Why it won:
The rewards: If you spend $3,000 in the first three months, you’ll earn 50,000 bonus points, which is worth $625 toward airfare or hotel expenses. This makes each bonus point worth 1.25 cents and that’s pretty good.
You also get two points per $1 spent on travel and dining. But book your travel through Chase’s Ultimate Rewards online booking tool and you’ll get an additional point, which gives you three points per eligible $1 spent. Plus, you use 20 percent fewer points if you use Ultimate Rewards to book your itinerary. So if your $400 flight costs 40,000 points, you only have to use 32,000 points.
[Past Winners: Best Travel Rewards Credit Cards]
The costs: The annual fee is $95, but it’s waived for the first year. There are no foreign transaction fees, which saves a bundle if you travel overseas. The ongoing variable APR is 15.24 percent.
1st runner up: Capital One Venture Rewards Credit Card
This is also an excellent card for racking up miles and it finished just behind the Chase Sapphire Preferred Credit Card. What I love about Capital One is the user-friendly website. It’s so easy to find and understand the details about the costs and the rewards of this credit card.
Why it won 1st runner up:
The rewards: Spend $1,000 within the first three months and get a bonus of 10,000 miles. You get two miles for every $1 spent. For a $250 flight, you need 25,000 miles, so 1 mile is worth 1 cent. You can also use the miles to pay for any travel expense, such as baggage fees. Your miles don’t expire and there are no limits to the number of miles you can earn.
The costs: The purchase APR ranges from 11.9 percent to 19.9 percent. The annual fee is $59, but it’s waived for the first year. There are no foreign transaction fees.
2nd runner up: Starwood Preferred Guest Credit Card from American Express
It might seem odd to see a hotel-branded credit card placing here. But this credit card offers a very generous rewards program based on points and you’re allowed to redeem them for airfare.
Why it won 2nd runner up:
The rewards: After your first purchase, you get 10,000 bonus Starpoints. Earn another 15,000 Starpoints when you spend $5,000 in the next six months. Earn up to five Starpoints per dollar spent at hotels and resorts that are in the SPG program. Get one Starpoint per $1 on everything else.
The point value is hard to pinpoint exactly because the number of points required is based on a range of airfare costs (e.g., you need 20,000 points for a flight that costs between $215 and $280). By my calculations, the point value ranges from 1.08 cents to around 1.34 cents, which is very good. You can redeem Starpoints at over 350 airlines with no blackout dates.
Note that when you use the points for hotel accommodations, one point is worth over 2.25 cents.
[Past Winners: Best Cash Back Credit Cards]
The costs: This card has a variable APR that ranges from 15.24 percent to 19.24 percent. There’s a $65 annual fee, but it’s waived for the first year. Foreign transaction fees are 2.7 percent.
At publishing time, Chase Sapphire Preferred Credit Card, Capital One Venture Rewards Credit Card and Starwood Preferred Guest Credit Card from American Express are offered on Credit.com product pages and Credit.com may be compensated if our users apply for and ultimately sign up for any of these cards. However, this relationship does not result in any preferential editorial treatment.
The Best Low Interest Credit Card in America
The Winner: Simmons First Visa Platinum
Many of you have probably never heard of Simmons First National Bank. It’s headquartered in Pine Bluff, Ark., but you can apply for this card no matter where you live.
This is the perfect card for an emergency. Or if you’re currently having cash-flow issues and you need to revolve a balance, this credit card gives you a low-cost way to survive until you can make ends meet again.
Why it won:
The benefits: This card doesn’t have rewards and that’s why the interest rate is so low. But there are some excellent benefits, such as the $1,000,000 travel accident insurance coverage. You can also get emergency cash and credit card replacement services if your card is stolen while traveling.
[Related article: Best Cash Back Credit Card Right Now]
The costs: You get a 7.25 percent variable APR. There’s no annual fee. Foreign transaction fees are 2.7 percent.
Runner up: Capital One Platinum Prestige Credit Card
This card offers a zero percent intro rate through January, 2013 on both purchases and on balance transfers. There are no foreign transaction fees so this is a good “emergency card” to take with you overseas.
Why it won runner up:
The benefits: You can most likely sense the trend here. If a card has a really low APR, it has zero or limited rewards. The starting end of the APR range for this card isn’t as low as it is for the other winners in this category, but the 15-month zero percent introductory APR makes up for it.
The costs: You get a 10.9 percent, 14.9 percent or 18.9 percent variable APR. There’s a 3 percent balance transfer fee. There’s no annual fee. There are no foreign transaction fees.
At publishing time, Simmons First Visa Platinum, IBERIABANK Visa Select and Capital One Platinum Prestige Credit Card are offered on Credit.com product pages and Credit.com may be compensated if our users apply for and ultimately sign up for any of these cards. However, this relationship does not result in any preferential editorial treatment.
[Past Winners: Best Credit Cards for Students]