Consumer Reports’ Best Credit Cards for 2012

October 11, 2012 No Comments »
Consumer Reports’ Best Credit Cards for 2012

If you’re a fan of Consumer Reports, as opposed to individual bloggers and others that share their opinions about products and services, then read up.

The well known company’s “Money Lab” analyzed 53 “mass-market credit cards” to determine which would make the most sense for consumers based on certain needs.

The categories include cash rewards, travels cards, and balance transfer/low-rate cards.

For the first two categories, they assumed the family (cardholder) spent $400 a month on gas, $600 on groceries, and $1,000 elsewhere.

For the balance transfer cards, it was assumed that $10,000 in existing debt was being transferred.

Let’s take a look at who they felt delivered the best value, and then I’ll add my opinion.

Cash Rewards

American Express Blue Cash Preferred

First up is Amex’s Blue Cash Preferred, which offers 6% cash back at supermarkets, 3% cash back at gas stations, and 1% back elsewhere.

It’s got a $75 annual fee and $150 bonus after spending $1,000 in the first three months.

My opinion: I agree that it’s one of the best pure cash back rewards credit cards out there. But make sure you do the math first to ensure the non-preferred version doesn’t make more sense financially.

Fidelity Rewards American Express

Another Amex card made the list, thanks to its 2% cash back on all purchases.

It has NO annual fee and you can set the card up to automatically deposit $50 into your designated Fidelity account(s) every time such a bonus amount is accrued.

My opinion: Great card for those who want to invest, but don’t have the discipline. And with 2% cash back everywhere and no annual fee, it doesn’t matter how much you spend or where.

Capital One Cash Rewards

This is the 50% more cash card from Cap One, which comes with a $100 sign-up bonus after spending $500 in the first 3 months.

You get 1% cash back on all purchases, and 50% bonus at year-end, aka 1.5% total cash back.

My opinion: It’s more smoke and mirrors than anything else when it equates to just 1.5% cash back, but it might be easier to get approved for this card than others in its class.

Travel Cards

Chase Sapphire Preferred

This card offers 40,000 bonus points after you spend $3,000 in first 3 months, which is good for $400 cash or $500 in travel rewards.

You earn 2 points for each $1 spent on travel and at restaurants, along with a 7% bonus on points accrued annually.

It’s also got a $95 annual fee, which is waived for the first year.

My opinion: The solid opening bonus is reason enough to give it a shot, even if you find it doesn’t work for you after a year. It’s free to try!

American Express Blue Sky Preferred

Amex’s Blue Sky is the easiest travel credit card out there, with 2 points earned per $1 spent on dining, hotels, and car rentals, and 1 point per $1 elsewhere.

There’s also a welcome bonus of $200 if you spend $1,000 in the first three months, but a $75 annual fee.

My opinion: Kind of lame that they don’t offer bonus points for travel purchases, seeing that it’s a travel rewards card. The free version might make better sense here.

Capital One Venture Rewards

Finally, there’s the Venture Card, which offers 2 points per dollar spent, along with 10,000 bonus points if you spend $1,000 in the first 3 months.

There’s a $59 annual fee, but it is waived for the first year. Both the preferred and free versions do not charge foreign transaction fees.

My opinion: Get the free version instead, which has the welcome bonus and still earns 1.25 points per dollar spent, unless you spend a lot and plan to travel.

Balance Transfer Cards

Chase Slate

If you’ve already got a balance, Consumer Reports smartly says to go with the Chase Slate card.

It doesn’t charge a balance transfer fee and offers 0% APR for a full 15 months.

My opinion: This is a no-brainer, considering it’s the only no fee balance transfer that comes with 0% APR.

Citi Diamond Preferred Card

If 15 months of 0% APR isn’t enough, there’s the Citi Diamond Preferred Card instead.

It’s got no annual fee, but it does carry a 3% balance transfer fee.

My opinion: If you’re trying to transfer existing Chase credit card debt, Slate won’t work, so this card could be a winner because it’s a different issuer.

PenFed Promise Visa

The final card to make their winners’ list is from the Pentagon Federal Credit Union. In other words, you need to be involved with the military or make a donation to join.

It offers a low fixed APR of 4.99% for the life of your transferred balance, no balance transfer fee, and no annual fee.

My opinion: It could actually be cheaper than a no fee balance transfer if it takes you a long time to pay off your debt, but I’d go with the no fee option first.

[See also: PenFed Defender from American Express]

So there it is…I’d have to say that Consumer Reports did a good job of picking some winners from the bunch.

Just be sure to run the numbers and do the math for your particular situation, as opposed to just assuming they’ve already done your homework for you. Deals will differ based on your spending habits and existing debt.

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