When you charge something on your credit card, the merchant usually pays about 2-3% in transaction fees for the convenience and benefit of accepting these cards (it makes it easier for people to spend money with them). In order to get their specific card “in your wallet”, issuers often rebate part of these fees in the form of % cashback rewards or frequent flier miles. This makes sense, because many people with good credit and/or higher spending don’t carry balances so that the primary source of profits is from these transaction fees.

Here are some popular cards and their current rotating categories. Also, new cardholders can combine with current sign-up bonuses of up to $100 upfront.

Citi® Dividend Platinum Select® Visa® Card
Reward categories change quarterly. From April 1st to June 30th, you can earn 5% cash back on

• Home Depot
• Home Furnishing purchases
• Home & Garden Purchases

After you get your card, you must enroll by logging into your account or calling 1-800-231-0891. There is no cap on the 5% back, except for the $300 overall cap on all dividend rewards annually. All other purchases do earn a standard 1% with no tiers, and rewards do not expire as long as you have activity once every 12 months.

Chase Freedom Visa – $100 Bonus Cash Back
Reward categories change quarterly. From January 1 to March 31, 2012 you can earn 5% cash back on up to $1,500 spent in the following categories:

• Gas Stations
• Amazon.com

You must enroll at ChaseBonus.com. All other purchases do earn a standard 1%, with no tiers or expiration of rewards. Currently, the Chase Freedom Visa – $100 Bonus Cash Back has a promotion offering a $100 check if you sign up and make $500 in purchases in your first three months.

Discover More Card
Reward categories change quarterly. From January 1st to March 31st, you can earn 5% cash back on up to $300 spent in the following categories:

• Gas
• Entertainment

In September, you can also earn 5% cash back on up to $200 spent in grocery stores and drugstores. You must enroll online to activate the rewards each quarter. Discover card has a tiered cashback rate (1% unlimited Cashback Bonus on purchases after your total annual purchases exceed $3000; purchases that are part of your first $3000 earn .25%.).

PenFed Platinum Cashback Rewards Card
Bonus categories appear and change regularly for this card, but not on a set schedule.

You can view all the eligible merchants. You don’t need to enroll. This is in addition to the year-round rewards structure of 5% cash back on gas purchases (must pay at pump) and 1% cash back on everything else. Rewards are credited monthly on your next statement.

Note: To get this card, you must also have membership to the Pentagon Federal Credit Union (you can apply for both at the same time). In general, membership is open to the military, US government employees, or the family or household of existing members. However, anyone can become eligible by joining the National Military Family Association (NMFA) for a $20 one-time fee. PenFed also offers other competitive financial products, including low-rate mortgages and long-term CD rates.

In order to keep track of all these, I usually just cut off the top part of a Post-It note with the sticky backing, and use it to label each card in my wallet. Here’s a pic of one of my cards:

Update February 2011: Use coupon code FICO25 for 25% off!

I am not a big fan having to purchase credit scores. I can understand why a lender would pay to get a calculation of your likelihood of defaulting on your loan, but if it’s based on our data, why do we have to pay just to see it? Even if I am declined for a loan, I can only see my report, not the numerical score that supposedly defines my financial life.

There are plenty of “FAKE-O” credit scores out there, but the only place to get your real FICO score is myFICO.com. If you must order your score, use the promotional code CPPSAVINGS to get 20% off.

For the Equifax credit score only, you can get it for $10.95 using the code SW94608, which is over 30% off. You enter the promo code relatively late in the buying process, right before entering your credit card information.

Whenever you do buy a score, I would recommend trying to correlate your score and the current information on your report. Then you can start to learn what changes really affect your score. I’ve applied for 12 credit cards and canceled 5 with almost no appreciable affect to my scores (see credit score myths) – despite all the “rules” – only to have a huge balance on my mom’s credit card (with me as authorized user) show up and drop it by 30 points.

There used to be a bunch of great cashback cards for gas, but now the only one that still offers 5% back to consumers is the PenFed Visa® Platinum Cash Rewards Card. It offers:

• 5% cash back on gas purchases (must pay at pump)
• 0.25% cash back on everything else.

No annual fee. The rewards are credited on each monthly statement, so that you don’t have to wait to meet any $50 thresholds or remember to call in. If your family spends $200 on gas per month, that alone will have this card paying you $120 per year in rewards.

The catch? You must also be a member of the Pentagon Federal Credit Union, and you can apply for membership as part of the credit card application. In general, membership is open to members of the military and affiliated organizations, US government employees, or the family or household of existing members. However, anyone can become eligible by joining the National Military Family Association (NMFA) for a $20 one-time fee (and it goes to a good cause). PenFed also offers other competitive financial products, including low-rate mortgages and long-term CD rates.

The Chase Sapphire Preferred® Card is a rewards credit card that is now offering new cardholders 50,000 bonus points after you spend $4,000 in purchases within the first 3 months. This is quite a good deal, as 50,000 points can be redeemed for $625 in travel when you redeem through Chase Ultimate Rewards™ (you can buy a more expensive ticket and simply pay the difference). Earn 5,000 additional bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening. No annual fee for the first year, $95 in future years.

[This card is the “big brother” of the regular Chase Sapphire® Card, where you can get 10,000 points after you spend $500 in the first 3 months (no minimum amount) – that’s $100 in travel rewards when you redeem through Chase Ultimate Rewards! and there is no annual fee in the first year or subsequent years. As well as an additional 2,500 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening. I would personally rather go for the 40,000 points offer since the annual fee is waived for an entire year.]

Rewards Features
As a rewards card, the Sapphire offers 2 points per dollar spent on travel, 2 points per dollar spent on dining at restaurants and 1 point for every dollar on all other purchases (100 points = $1, or the usual 1% back). However, this card separates itself with it’s flexible redemptions. Cash redemptions are easy – you can redeem in $1 increments as long as above $20, so you could cash out $27 or $253 without anything left over. There are no earning caps, or points expiration dates.

As noted above, airplane ticket redemptions can also be maximized because you can book any ticket and simply pay the difference. For example, 25,000 points can be used for any ticket up to $312.50, but if say you wanted a $325 ticket you could just pay the $12.50 difference. On other cards, you would have to go up another tier and spend an extra 10,000 points or similar.

More Details
In addition, Sapphire also promotes a “premium, dedicated service line that gives you access to a live person anytime, 24/7.” I tested this out and it really works! A real person picks up after a couple rings… it’s actually a bit disconcerting. You can also redeem cash rewards over the phone for free, although booking rewards tickets this way costs $20 (doing so online is free).

Fine print:

Earn 50,000 bonus miles – That’s $625 in travel when you redeem through Chase Ultimate Rewards™
You will receive 50,000 bonus points with this bonus offer, which can be redeemed for a round trip ticket on most major airlines up to a $625 value. Ticket value exceeding $625 can be charged to your new card. A service fee of up to $20 per ticket may be charged for the use of our toll-free number to book or change airline itineraries. Redemptions made online do not have a service fee. Cardmember is responsible for any airline or government imposed fees. To qualify and receive your bonus, you must make qualifying transactions totaling $4,000 or more during the first 3 months from account opening. Qualifying transactions include purchases, balance transfers, and any checks that are used to access your account, and exclude cash advances. After qualifying, please allow 6 to 8 weeks for bonus points to post to your account. To be eligible for this bonus offer, account must be open and not in default at the time of fulfillment. This one-time bonus offer is valid only for first-time cardmembers with new accounts. Previous and existing cardmembers/accounts are not eligible for this bonus offer.

I already have the Chase Sapphire regular card and got my $250 (previous offer). But given how easy it was to redeem the reward, I’m going to have Mrs. MMB apply for a Chase Sapphire Preferred® Card as well this time. (I try not to bother her too much unless it’s very juicy.)

• Chase Sapphire Preferred Card application link

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The Chase Sapphire Card is a new rewards credit card that is offering 10,000 bonus points after your first purchase on the credit card, which can be redeemed for $100 cash. No annual fee.

As a rewards card, it offers 1 point for every dollar in purchases (100 points = $1, or the usual 1% back). The nice part is that redemptions are easy – you can even redeem in $1 increments as long as above $20, so you could cash out $27 or $113 without anything left over. There are no earning caps, or points expiration dates.

In addition, you can get double points on airfare booked through their Ultimate Rewards website. It also promotes a “premium, dedicated service line that gives you access to a live person anytime, 24/7.” I tested this out a couple of times and it really works! A real person picks up after a couple rings… it’s actually a bit disconcerting. Makes redeeming rewards much easier as well.

Fine print:

10,000 bonus points
You will qualify for and receive your bonus after your first purchase/first use of the card. First purchase/first use includes purchases, balance transfers, or any checks that are used to access your account, and excludes cash advances. After qualifying, please allow 6 to 8 weeks for bonus points to post to your account. This one-time bonus offer is valid only for first-time cardmembers with new accounts.