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5 Times It’s Okay to Close a Credit Card


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Conventional wisdom says that you should never close a credit card account unless you have an overwhelmingly pressing reason to do so.

It’s true that closing an account can hurt your credit. If you close an old account, it can shorten your credit history, which can then lower your overall credit score. Also, closing an account means that you have less credit available, so the balances you do have will take up a larger percentage of your available credit. This is called your credit utilization ratio (an important factor in your overall credit score), and you want that percentage as low as possible.

This doesn’t mean that you should never close a credit card. Instead, it means that you need to be smart about which accounts you close and when you do so. Here are a few times when it makes sense to consider closing a card. (See also: How to Use Credit Cards to Improve Your Credit Score)

1. Preventing Identity Theft

The more credit cards you have, the greater the danger that one will be compromised and you’ll have to deal with identity theft. If you have a card that has been stolen or are anxious about identity theft, consider closing one or more cards to reduce your risk.

The accounts most at danger are the ones you don’t use very much. If a thief can get hold of one of these numbers, often by compromising a website where you used the card to make a purchase a long time ago, they can sometimes put quite a few charges on the card before getting caught. If identity theft is a worry for you, think about closing these infrequently used accounts first. An even better alternative: Avoid identity theft in the first place by practicing good credit card safety measures, such as only purchasing on secured, trusted sites using secure Wi-Fi.

2. High Interest Rates or High Fees

Cards that cost you money, especially when you aren’t getting anything back, can be good candidates for closure. Sometimes, the benefits of a particular card (like one that earns you airline points) can be worth the annual fee. However, many people pay more in fees and interest than a card is worth.

Before you close a card because of what it costs you, try negotiating with the company. It never hurts to ask for a lower interest rate or a waived fee. The worst the company can do is say “No,” and then you can go ahead and close it.

3. You’ve Already Made Your Major Purchases

If you’re planning a major purchase that will require financing, like a car or a home, wait until that is complete before you cancel any credit card accounts. Since your credit score is almost sure to be at least a little bit higher with the cards contributing, it makes sense to wait to cancel them.

Even if canceling your cards won’t hurt your credit very much, it could earn you a slightly higher interest rate. While a quarter (or even a tenth!) of a percent may not seem like very much up front, it can mean that you’ll pay thousands of dollars more over the life of the loan. That’s not worth it!

4. You Have Too Many Cards

While it’s generally true that leaving cards open helps your credit, having too many open, in certain scenarios, can actually hurt you. Credit cards are considered revolving credit, which is the worst kind to have. If you have too much, especially in relationship to other types of credit, your score may actually be lower than it would be without a card or two.

In addition, it seems likely that people who manually underwrite loans look negatively on having too many cards open at once. This is mostly anecdotal but, if you’re going after one of these loans, it may be wise to close down some cards.

5. When You Can’t Stop Spending

No matter how much it hurts your credit, you should shut down credit card accounts if having them open is a spending temptation that you can’t resist. If freezing or cutting up your cards doesn’t work for you, and there isn’t another way to stop yourself from building up more and more debt, then cancelling the cards makes sense.

This is a last-ditch scenario, but I’ve known more than one person who faced it. Desperate times call for desperate measures, and sometimes it’s better to take the credit score hit rather than continue out-of-control spending.

Have you ever cancelled a credit card? What made it worth the hit to your credit score?

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any bank, card issuer, airline or hotel chain.

What to Do If Your Cable TV Bill is Too High


Cable companies are a supreme example of a natural monopoly. They’re the easiest example for economics professors to use, because, due to structural conditions, only a few competitors can exist in any cable market. Often, there is only one option that consumers can choose. The consumer has no leverage and is thus at the mercy of the cable company.

Over the years, the price of cable has increased significantly. Luckily, other forms of technology and media have grown as well, leading to a shift in favor of the consumer.

If your cable bill is too high, you now have options. 

Netflix and Hulu Plus

The internet age has opened the door to new companies, such as Netflix streaming and Hulu Plus, to compete with cable companies.

Netflix offers a wide selection of movies and TV shows, while keeping their price low ($7.99/month). They offer full seasons of TV shows, movies, and HD quality video. While Netflix doesn’t offer a lot of newer shows, they make up for it with quality streaming and a huge array of movies. One account can have up to six devices, with up to four running at once. You can even split the cost among friends and family, which will reduce the price even more. I have had Netflix for over a year now and have been very satisfied.

For the same price as Netflix, Hulu Plus offers a similar platform with a different approach. Hulu Plus puts new episodes of shows on their site the day after they’re aired. My future sister-in-law and her husband have recently dropped cable in favor of Hulu Plus. They can now watch their favorite shows the day after they’re aired, for a fraction of the cost of cable and DVR.

Dish Network

The likes of Dish Network and DirecTV have been competing with the cable companies for a while, and they generally offer lower prices. My fiancé and I currently pay $50 a month for her cable bill, while Dish Network and DirecTV offer yearly contracts for $35/month and $30/month, respectively. For us, getting a dish is out of the question, because she lives in an apartment.

It could be a good option for homeowners, though, as they’ll get a full set of channels and could save a couple hundred dollars per year.

Call Customer Service

Sometimes, a call to customer service is enough to drop your monthly bill. If you look at the currentVerizon FiOS promotion codes or AT&T U-Verse coupon codes, you’ll see that the bundle prices are usually guaranteed for one to two years. After that, the cable companies are free to raise their rates considerably.

If you call and say you’re considering switching companies, however, they’ll frequently offer you a “one-time” special offer. This may seem like a backwards approach, but I’ve seen it work numerous times.

What Will You Do?

Is cable best for you? Spending $600 a year on cable is less than ideal, but it’s what my fiancé and I decided was right for us in our current situation. In the future, when we’re both working longer hours, we may consider switching to something different.

Save Money On Housing: Live Well In Less Space

image credit:

Speaking of internal frugality, I’d say one of the most basic ways to save on rent or mortgage payments is to… live in a smaller place. No, wait, really. Let’s think about it.

Even though it’s now easy to make fun of 10,000 square feet McMansions, they are only a side effect of an overall trend towards larger houses. According to this 2006 NPR article, the size of new houses has more than doubled since the 1950s. The average new home sold in 2007 was a whopping 2,629 square feet.

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I know we’re getting fatter and need a bit more space to move around, but not by that much! In fact, the average family size has actually been decreasing over time. Here are some stats I pulled from the U.S. Census:

Source: U.S. Census Bureau

From 1970 to 2004, the average household shrunk by 27%, but the average square footage grew by 66%. Using median numbers gave similar results.

There are several theories as to why this is happening. For starters, we may simply want a higher standard of living. (Sharing bathrooms? That’s for people in 3rd-world countries!) Perhaps it’s from us continually one-upping our neighbors. Maybe builders are pushing bigger homes through marketing. Or it may be a result of the breaking up of the American family, and how we don’t like spending time together anymore.

Most importantly, we don’t need the extra space. If a family of four could live well in 1,500 square feet back in 1950, there is no real reason they can’t do so today. It’s just a choice like any other, and we have to examine whether it is really worth the price. In cities like New York, Tokyo, or Hong Kong where space is at a great premium, families have long adapted to much smaller living spaces.

Finally, the extra costs don’t stop with the bigger sticker price. There’s the higher property taxes and insurance rates. A bigger home costs more to heat, cool, maintain, and repair. More rooms means more furniture, more wall decorations, more room for clothes, and just more stuff in general. More appliances mean more electricity used. The list goes on and on.

In my opinion, many people don’t even notice that they are stretching to buy homes that just keep getting bigger and bigger. They just follow the crowd. It’s hard to be different. This unconscious choice may partially explain why many of us feel so much more stressed financially than our parents.

Update: After the housing bust, there has been a growing counter-culture celebrating living well in smaller places. There is even the extreme end of buying tiny houses and the small house movement. We may not need to all live in 300 sf houses, but it’s good to explore our options.

A Better Way To View Stock Market Risk

The prospect of losing your hard-earned money is scary. You know that if you invest with $1000 in stocks, in a year you could be left with either a huge gain or a huge loss. People (including me in the past) tend to look at the stock market like a slot machine:

Wrong Outlook

This is good in that, yes, for the short-term the stock market is risky. Don’t put money you may need right away into stocks. However, when young people tell me that they are putting their Roth IRAs in a bank CD because they are afraid of the stock market, that isbad. Roth IRAs are long-term investments. We’re talking 30, 40, 60 years for some people! The way you should be looking at the stock market is this:

Correct Outlook

As you can see, as your time-horizon lengthens, your risk of losing money decreases significantly. When looking back and taking any 25-year period between 1950 and 1994, the worse case still gave you a 7.9% annualized return. Note that the average for all of these time periods is still the same, 10% per year. So what you’re really looking at is something more like:

Not So Bad

Although we may not get that same 10% average in the future, I think it’s clear that you need to make your horizon as long as possible by starting now. Remember, even though you may track your investments daily, most of you are not going to actually touch them for decades, so it doesn’t matter what happens next year. What matters is that you were “in the game” for that year, extending your time period in the market, rocky or not. Also, this is just stocks – We are not even taking into the account the additional tempering effect of incorporating bonds to your portfolio.

Finally, consider this. Right now, bank CDs paying 6% in some cases may seem nice. But after inflation, the long-term return of cash-equivalents like bank accounts or Treasury Bills is… zero. By not investing in stocks (again, for long periods), you are giving yourself a 100% chance of making nothing. IRAs, 401ks, 403bs, TSPs, they are all for the long-run. Get in the game!

How to avoid Australia’s outrageous ATM fees of up to $6

Holiday-makers need to look at ways to avoid being hit with hefty ATM charges while on holiday.


TRAVELLERS are being stung up to $6 just to check their bank balances, in the latest outrageous example of ATM fee gouging.

Machines at airports, cruise ships and overseas locations are by far the most expensive places to get cash out, exclusive ING Direct data obtained by News Corp shows.

FIND the best daily bank account

The study also found the average ATM fee has shot up from $2.10 in 2013 to $2.20 as customers continue to be stung for checking balances or withdrawing cash.

Aside from one of the biggest cruise ship providers slugging customers $6 to use on-board ATMs, airports are also gouging the unprepared traveller — hitting them with a two to five per cent charge for using their machines.

Warning ... Travellers need to know the costs when using their card or they face getting stung with high charges.

Warning … Travellers need to know the costs when using their card or they face getting stung with high charges.Source:News Corp Australia

Financial comparison website RateCity analysis found Australian travellers paid about $535.8 million in currency conversion and ATM charges in the 12 months until October.

The site’s spokeswoman Sally Tindall said it was vital consumers planned ahead so they could avoid being stung by unnecessary card charges.

“Often the harder the ATM machines are to come by the more expensive they can be, so it’s useful to do your research in advance,’’ she said.

“If you’re travelling to a place where ATMs are hard to come by, consider taking a safe amount of cash and put purchases on your credit card where possible.”

Start forward thinking ... Customers can avoid high ATM fees if they carry cash and plan ahead.

Start forward thinking … Customers can avoid high ATM fees if they carry cash and plan ahead.Source:Supplied

ING Direct refunds eligible customers ATM charges regardless of the cost.

The bank’s executive director of customer John Arnott said “Australians hate ATMs” as costs continued to incline.

“They are less prudent with their money management when they on are holiday,’’ he said.

“There’s also a real lack of awareness of these ATMs whether it be domestically or overseas.”

He suggests consumers use mobile phone apps to check their balances instead of being gouged when using an ATM to do this.

Many of the ATMs that charge the higher fees are not bank-owned machines — most privately-owned machines.

The Australian Bankers’ Association executive director of retail policy Diane Tate said customers were becoming savvier with avoiding ATM charges.

“In 2014, consumers paid $291 million in bank transaction fees, which includes ATM fees — the lowest amount since 1999,’’ she said.

Perth’s hospital patient spending forcing massive health cuts

Perth’s new Fiona Stanley Hospital won’t be safe from the staff cuts. File image

THE amount of money spent on pat­ients in our southern suburbs hospitals is out of control – forcing the Government to cut the equivalent of 1163 full-time jobs.

Massive cuts will be made to Royal Perth Hospital, Fremantle Hospital and even the just opened $2 billion Fiona Stanley Hospital.

Health Minister Kim Hames told The Sunday Times new Independent Hospital Pricing Authority figures show WA was 14 per cent above the “national projected average cost” for “hospital activity per patient”.

The cost per “weighted activity unit” in WA was $5667 against the national projected average of $4971.

In comparison, the cost for Victoria was just $4237 and for NSW was $4930.

Dr Hames said comparisons of WA hospitals with “like for like” fac­ilities in the eastern states showed they were providing “exactly the same levels of care” but doing it “much cheaper”.

“We have enormously increased expenditure, but at a price,” he said.

“We can’t afford to pay that price anymore.”

A Health Department “Analysis” obtained by The Sunday Times reveals the South Metropolitan Health Service must cut the equivalent of 1163 full-time staff to reach a “sustainable workforce”.

This includes 297 at the new FSH and 568 at RPH. Fremantle Hospital is also 170 over budget. About 45 per cent of the cuts will be to clinical staff.

Overall, the full time equivalent (FTE) numbers for the SMHS must be reduced from 12,978 to 11,815.

Health Minister Dr Kim Hames said WA needs to toughen up now the mining boom is over.

Health Minister Dr Kim Hames said WA needs to toughen up now the mining boom is over.Source:News Limited

Cutbacks to overtime, changes to call-back and on-call rostering and less reliance on short-term contractors will mean the FTE cutbacks won’t simply equate to 1163 people losing their jobs.

However, Dr Hames could not tell The Sunday Times how many hundreds of people would need to be axed. He wants significant cutbacks within six months.

The FTE analysis comes after fierce criticism already from the Australian Medical Association, unions and Opposition about cuts.

Dr Hames said there was simply no alternative but to rein in costs within the $8.2 billion health portfolio, which was now about 29 per cent of the state’s total annual spend.

He said the South Metropolitan Health Service was predicted to be more than $200 million over budget at the end of this financial year.

It simply had “too many staff” in some areas, he said.

Dr Hames said the mining boom, and the state’s isolation, meant wages for our medical staff were higher than other states.

He said it was “clear” the mining boom was over and the state needed to “toughen up”.

Dr Hames conceded other states had been doing Activity Based Funding for longer than WA, which was partly why they were more efficient.

He wants our hospitals to become better at managing rosters and ensuring “coding” paperwork for hospital procedures maximised federal funding opportunities.

“Coding is critical,” he said.

“That determines A) what you get from the State Government for that procedure and B) what you get from the Commonwealth.

“(The Commonwealth) fund 40 per cent of your coding.”

Revenue generation was also a significant area where WA hospitals must improve.

Originally published as Health service to cut 1000 jobs

Australians credit card debt climbs to $49.3 billion – Reserve Bank

Number of credit and charge card accounts is about to top 15 million for the first time,  resulting in an average debt of $3321 a card / File

  • Aussies owe $49.3bn on credit cards – RBA
  • Average credit card holder has a $3321 debt
  • Higher costs of living ‘hitting households’

AUSTRALIANS owe almost $50 billion on credit cards as spiralling living costs force them to put everyday expenses and even mortgage repayments on plastic.

Reserve Bank of Australia statistics reveal the national credit card debt has climbed 42 per cent in the past five years to $49.3 billion, with $36 billion accruing interest.

The $2.87 billion increase has stunned experts with figures showing the average credit card debt of $3321.

While that may appear to be manageable, on a national scale our credit card addiction is one of the world’s most severe. Nudging the Budget deficit in size, it would be enough to pay off the average $300,000 mortgage of almost 170,000 homeowners.

Debt Relief Australia spokesperson Deborah Southon says the typical family credit card debt is likely to be much higher than the $3321 average with many households juggling repayments on two or more cards.

More than 70,000 Australians visit the debt resolution site each year seeking help.

It is not uncommon for single households to incur tens of thousands of dollars in credit card repayments with families increasingly relying on plastic to meet higher costs of living.

“It’s not just the number of people who come to us for credit card debt resolution that’s alarming but the extreme level of debt they are in,” Ms Southan says.

“We had a client recently who owed $450,000 and was on a salary of $40,000. She had ten credit cards and was using one to pay off the other. By the time she came to us she was almost suicidal.”

Ms Southon says it’s not surprising that more Australians are sliding into the debt every month, with credit card companies constantly devising new ways to lure cardholder to make more purchases and conduct more transaction, such as rewards programs and special offers.

Blinded by the incentives, consumers lose sight that credit cards are one of the most expensive ways to borrow money, she says.

“Lives can be destroyed by credit card debt, more couples break up over financial stress than infidelity,” Ms Southon says.

“People have these huge credit card debts and no assets through that spending because they are buying goods which depreciate in value.”

The risk increases tenfold when households and businesses are under both credit card and mortgage stress, she says.

“You have people who are paying $500 a week on a mortgage and then servicing a $40,000 credit card debt on top of it. You need a substantial income to be able to afford that. Most of middle Australia can’t cope with that sort of debt.”

This massive mountain of debt will continue to escalate indefinitely with many lenders charging interest rates on credit card accounts four times higher than the official RBA cash rate of 4.75 per cent.

More than two-thirds of consumers’ outstanding debt is accruing interest at the average rate of nearly 20 per cent – a 20-year high.

Ms Southon blames lenient lending criteria prior to the GFC – tighter rules came into play under credit card reforms in January – and a spending binge fuelled by the Rudd Government’s first home owner grant and the stimulus package.

Before the reforms, credit cards were being approved to households and businesses with low documentation or no documentation at all.

Today there are more than 14 million credit cards in circulation in Australia, with almost every adult owning at least one.

And experts warn the financial headache will get worse before it gets better.

The RBA is expected to increase the official cash rate from next month and credit card holders squeezed by mortgages are extremely vulnerable to rate rises – families already buckling under the weight of household costs won’t be able to tolerate increases to their repayments.

More Australians will default on credit cards, homes, businesses and cars will be repossessed, relationships tested and lives left in tatters.

Ratecity CEO Damian Smith blames society’s spend-now-pay-later culture.

“Credit cards are the easiest form of debt Australians have access to. It’s the simplest loan for most people to get approval for and the most flexible to use,” Mr Smith says.

“Most credit cards have a minimum repayment of 2 percent each month and unlike most other types of loans, there is no time period to pay it off. This becomes dangerous because people can get caught with a never-ending debt.”

Mr Smith says the rising Australian dollar has added to credit card woes by boosting online shopping, and with no short-term end in site for the currency’s ascent will continue to.

While credit card debt is crippling households, it also impacts on the health of the nation.

Maxing the plastic stimulates the economy in the short-term, says J.P. Morgan economist Helen Kevans.

“But, should consumers get too deep in debt, spending is reined in or ceased altogether, dampening private consumption, which in Australia’s case accounts for a substantial 54 per cent of GDP,” Ms Kevans says.

“When debt becomes unmanageable, it can only affect the economy adversely. Consumption slows, the broader economy slows even more, leading to job losses and even less spending – a vicious circle.”

Ironically, the major benefactors of the credit card crisis – lenders – will end up wearing consumers’ pain. They will be forced to cut back on borrowing as a result of defaults, which today’s RBA figures indicate are only on the way up.

Tips – How to make your debt more manageable

Get organised – you can’t manage your debt situation effectively if you don’t know exactly where you stand. Write down your balances for each credit card, minimum payments due, annual fees, and interest rates for each.

Pay off your smallest balances first – your credit card with the lowest balance will probably be the quickest to pay off. So prioritise that rather than thinking about the huge lump sum you owe across all debts. Paying off something, even if it’s the smallest debt, can motivate you to keep on going.

Consolidate – see if consolidation will make monthly payments more manageable. Find a deal that lets you consolidate debts with lower required monthly interest. Just know there’s also more risk if you default on the larger consolidated debt.

Consider balance transfers – Even if you don’t want to consolidate all of your debts, you could consolidate a few or you could move some from high interest cards to lower interest choices.

Tap into other funding sources – Maybe you have other savings or investments you could utilise. As long as your outgoing interest on your debt is higher than the interest you earn on those savings and investments, your money is better put towards getting rid of that debt.

Blue Cash Preferred from American Express – the Right Cash Back Card for You?

There are a lot of great options for cash back credit cards right now, offering very compelling cash back rates and lucrative intro bonuses. But the one card that comes out on top in our analysis of the average person’s spending pattern is the Blue Cash Preferred Card from American Express (a NextAdvisor advertiser).  Its 6% cash back rate on groceries is the highest we’ve found from any card in any category and its 3% back on gas and department stores is the highest year-round rate in those categories. To top it off, its $150 intro bonus is the highest of any cash back card we’ve reviewed. We decided to dive deeper into its potential earnings, benefits and detriments to see if it is a smart choice for you. In short, if you have excellent credit and fairly typical spending patterns, it’s probably your best choice. In fact, it’s so great that I have one and use it frequently, enjoying generous cash back rewards. You can learn more about Blue Cash Preferred in our detailed analysis below.

The Highlights

If you enjoy earning phenomenal cash back rewards, you’ll love this card. The Blue Cash Preferred Card from American Express combines terrific cash back with a 0% intro APR and great American Express benefits. It starts off with a $150 bonus after you spend $1,000 in the first 3 months. If you use your card like a typical consumer, it should be pretty easy to meet these requirements. You can even pay for your mortgage and your utilities with the card (if these entities accept credit cards – most do) to help accrue the initial $1,000 and earn you additional cash back over time.

You’ll also earn a whopping 6% cash back at US supermarkets on your first $6K in grocery purchases each year, after that you earn 1% back. If you do a lot of food shopping, this is a huge bonus and a great way to earn extra cash as the 6% can add up to substantial cash back. You can even think of it as an effective 6% discount on your groceries when you pay with this card – a pretty great ‘coupon’!

In addition you’ll earn an unlimited 3% back at US gas stations and 3% back at select department stores like Sears, Macys, Kohl’s, Nordstrom, JC Penney and many more. The 3% back on gas can take a little of the sting out of filling up your tank, and if you shop at the select department stores the extra 3% back can make your purchase that much more enjoyable. Note that there is no limit on the amount of cash back you can earn at this 3% rate so if you’re a big spender on either gas or department stores, this card is likely a no-brainer. The rest of your card purchases will earn a very decent 1% cash back. You can redeem your earned cash back for a statement credit, gift card (including AmEx gift cards) or items in their online shopping mall.

Along with great cash back rewards, Blue Cash Preferred cardholders pay no interest for the first 15 months on both purchases and balance transfers. This 0% APR period will take you into 2017 interest-free, and can help you pay down any card purchases or balance transfers without owing interest fees.

World travelers will enjoy that Blue Cash Preferred features chip-enabled technology, making it easier to pay for purchases outside the U.S.  International merchants, particularly in Europe, are starting to require this technology in order to accept your credit card for payment.

Having an American Express card also means you get great benefits like extended warranties on eligible purchases, purchase protection and return protection. And vacations can be easier with car rental loss/damage insurance, travel accident insurance and their roadside assistance hotline. Plus you get exclusive access to ticket presales and card member-only events.

Things To Consider

Blue Cash Preferred does charge a $75 annual fee, which may seem like a lot but is typically something you can more than make up for through the cash back rewards you’ll accrue over the course of the year. If this is something you’re not willing to compromise on, its highly-rated sister card might be more up your alley. The Blue Cash Everyday Card from American Express doesn’t charge any annual fees, features a 15-month 0% APR, and you’ll earn 3% back at US supermarkets, 2% back as gas stations and select department stores and 1% back on everything else.

Although earning 6% on groceries and 3% at gas stations and department stores is pretty great, if you don’t typically spend much at these places then you are probably better off with a card that offers a higher flat rate back on all purchases. Our favorite in this category is the Citi Double Cash Card. It features an effective 2% cash back on all purchases as well as no annual fee and the ability to get your rewards via check or direct deposit. You should also be aware that purchases at warehouses and superstores aren’t eligible for the 6% cash back with Blue Cash Preferred. Instead you’ll earn the standard 1% cash back, which is still pretty darn good as many cards won’t give you any cash back at all for shopping at places like Costco, Target and Walmart. Superstores and warehouses also aren’t eligible for the 3% back on gas, you’ll get 1% back there too. If you’re not sure about how this might affect you, use our free Cash Back Card Calculator to estimate how much you might earn with each of the different cash back cards given your spending patterns.

If you enjoy traveling outside the U.S., be aware that Blue Cash Preferred charges a 2.7% foreign transaction fee. This charge can add up over time, particularly if you’re making all your international purchases on the card. If this isn’t something you’re willing to consider take a look at the Capital One Quicksilver Cash Rewards card, which doesn’t charge any foreign transaction fees and offers 1.5% cash back on all purchases.

The cash back rewards for Blue Cash Preferred are very generous, but you aren’t able to receive a check or direct deposit to your bank account with the money from your rewards. Instead you need to redeem your rewards for a statement credit on your account, or for gifts cards and other merchandise. While a statement credit is just the same as cash to most people, if you prefer to get cash in your hand, check out the aforementioned Citi Double Cash Card, which offers the ability to get your rewards via check or direct deposit.

Finally, you do need to have excellent credit (often considered to be a credit score above 720 but sometimes considered a score over 750) to be approved for Blue Cash Preferred. If your credit is not quite at that level, you should consider one of these cards for less-than-perfect credit.

Should You Apply For Blue Cash Preferred from American Express?

Blue Cash Preferred is a terrific card for anyone with excellent credit who wants to get big cash back rewards on groceries, gas and purchases at select department stores. In fact, the 6% back at supermarkets is the highest rate we’ve seen offered to consumers in any category. Plus, you can take advantage of the 15-month 0% APR on balance transfers and purchases. It does have an annual fee, and if you shop at superstores and warehouse stores you’ll earn the standard 1% instead of the higher cash back rates. You also can’t get your rewards in the form of a check or direct deposit and it does charge foreign transaction fees. If these are significant factors to you, consider some of the options detailed above. Overall though, Blue Cash Preferred is our #1 rated cash back card and a great choice for a strong cash back card.

Visit our American Express Blue Cash Preferred review to learn more and apply for the card today.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This content was accurate at the time of this post, but card terms and conditions may change at any time. This site may be compensated through the credit card issuer Affiliate Program.

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