My husband and I have booked a cruise for our wedding anniversary. We currently do not have a credit card. We want to have one specifically for this trip: cruise charges (drinks, excursions), bike/kayak rental, etc. We want to build credit and will consider making large purchases on it when we have the cash first and will pay off within the same month. What card or company should we consider?
Angela, credit cards have a bad reputation, and there’s a good reason for that. If you carry debt, the interest rates can be a killer. But they’re also an important tool to have in your wallet — used wisely, they can help you improve your credit score, as you noted, and even earn you money or other perks in the form of rewards.
This is a good, timely question, as many people are in the thick of planning their summer vacations. If you’re going to be paying off this card in full each month — as, of course, you should — you want to look for a card that will give you rewards by spending on things that you buy anyway. Card issuers often dole out rewards based on categories of spending — you might get more back when you shop at grocery stores, for instance, or fly a certain airline. Remember that this is a card you’ll use not only on your upcoming cruise, but also on other purchases when you return, so take a careful look at your spending and then look for a card that will reward you based on where you spend money anyway.
My favorite website to sort through the options is LowCards.com. You can search by gas cards, home improvement, retail, travel cards, and then narrow them down by the credit score requirements. If you’re not sure you’ll use something like miles, I’d look for the most generic card you can find – one that gives you cash back for spending across the board. LowCards.com picked the American Express Blue Cash Everyday card as the winner in that category – right now they’re offering $100 cash back if you spend $1,000 in the first three months of membership, and that cruise may get you there. The card also pays 3% back at US supermarkets (for up to $6,000 per year in purchases), 2% back at US gas stations and select department stores, and 1% on all other purchases. And there’s no annual fee, which is important because depending on how much you spend, a fee can really eat into your rewards.
Enjoy your cruise, and happy anniversary!