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A Review of Consumer Reports’ Tool For Calculating Credit Card Rewards

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Choosing the right rewards credit card is no easy task. First, you have to determine how much you spend each month, categorize your spending, and then sift through all the information out there to find the card that will give you the most bang for your buck. Fortunately, Consumer Reports has come up with a solution to this problem. Its Credit Card Adviser Comparison Tool uses your monthly spending habits to match you with the best rewards credit card — one that will give you the most cash back.

The main feature of Consumer Reports’ Credit Card Adviser Tool is the ability to customize your recommendations based on your monthly spending. The tool lets you break down your spending into five categories: Gas, Groceries, Restaurants, Travel, and Everything Else. The tool then calculates how much cash back you earn over the first year and the first three years, utilizing the categories from over 50 different rewards cards.

Let’s take a look at the top credit card recommendations based on three different budgets.

Budget 1: Carless and a Low Spender

cr1

The first example is actually based on my budget. I don’t own a car and have minimal expenses aside from monthly bills and occasional eating out or travel. With this low monthly spending, it can be difficult to get a lot of cash back from a credit card. This is why I’m always looking for creative ways to maximize my cash back rewards.

In addition to finding ways to get more cash back rewards with your current spending, having the best credit card for your spending habits is half the battle. The Consumer Reports’ Credit Card Adviser Comparison Tool recommends these three top credit cards for someone with my monthly expenditures:

MasterCard – Titanium Card

  • 1% cash back on all purchases
  • $500 sign up bonus when you spend $1,000 in the first three months
  • $195 annual fee

American Express Blue Cash Preferred

  • 1% cash back on all purchases; 3% cash back on gas; 6% cash back for first $6,000 spent on groceries and then 1% on grocery purchases
  • $150 sign up bonus when you spend $1,000 in the first three months
  • $75 annual fee
  • Read more about this card here

Chase Freedom

  • 1% cash back on all purchases; rotating quarterly cash back rewards
  • $150 sign up bonus when you spend $500 in the first three months
  • No annual fee
  • Read more about this card here

Budget 2: Frequent Driver and Diner

cr2

The average American spends about $2,000 per year, or $167 per month, on car fuel and on average $150 to $175 per month on dining out. Let’s say you drive and eat out a little more often than the average person, spending about $400 per month in each category. Here are the top three credit cards that Consumer Reports’ tool would recommend for you:

MasterCard – Titanium Card

  • 1% cash back on all purchases
  • $500 sign up bonus when you spend $1,000 in the first three months
  • $195 annual fee

PenFed Platinum Cash Rewards Plus Visa

Budget 3: Frequent Traveler

cr3

Those who travel often are in luck when it comes to credit card rewards. There are plenty of programs that reward frequently travelers. Let’s say you’re someone whose expenses are pretty typical outside of travel. When it comes to travel, assume you spend about $1,000 per month between flights, hotels, and other travel-related items. Here are the top three credit cards the Adviser Comparison Tool would recommend for you:

Chase Sapphire Preferred

  • 1% cash back on all purchases; 2% cash back on travel; 2% cash back at restaurants
  • $500 sign up bonus when you spend $4,000 in the first three months
  • $95 annual fee, waived in the first year
  • Read more about this card here

Discover It Miles

MasterCard – Titanium Card

  • 1% cash back on all purchases
  • $500 sign up bonus when you spend $1,000 in the first three months
  • $195 annual fee

Pros

The main advantage of this tool is the ease of use, and the website is very user-friendly. All you have to do is input numbers and watch the tool go to work, churning out calculations for how much cash back you would earn in one year and in three years. As you change the values, the list of recommended credit cards will update in real time.

Another advantage of the tool is the fact that you can use it as a forecasting mechanism. For example, if you are planning on traveling more in the upcoming year, you can browse the recommended credit cards to see which ones would offer the most rewards. You can sort the recommended credit cards in alphabetical order as well and use the tool just to browse the offers that are out there.

Cons

The main disadvantage of this tool is the calculation limitation. Currently, the tool only shows cash back rewards. For credit cards that offer rewards in the form of miles or points, the tool converts those miles and points into a cash equivalent. Since the value of miles and points can vary so much, not being able to view the actual rewards is a disadvantage. The tool’s cash equivalent may not necessarily be the exact value you would get.

Another disadvantage of the tool is that the database of credit cards compared is not fully inclusive. For example, a few credit cards not currently listed in the tool include: Chase Freedom Unlimited, Capital One Venture Rewards, and Discover It® Cashback Match. Not having these key credit cards in the tool means that you could be missing out on an opportunity to get a card that offers you maximum rewards.

Wrapping Up

The concept of the Consumer Reports’ Credit Card Adviser Comparison Tool is one that is much needed in the personal finance world today. It isn’t perfect and could use some tweaking before I give it my full recommendation, though.

The good thing about this tool is how easy it is to predict the rewards you would receive based on your monthly spending. However, the fact that miles and points rewards are converted to cash equivalents leaves the end user with a lot more to consider. Will you redeem all of the points or miles in a given year to realize the cash equivalent? Are you better off getting a strictly cash back card to earn more money?

The Consumer Reports’ Credit Card Adviser Comparison Tool is a step in the right direction. I imagine that over time, it will become more robust and cater to the end users’ needs even more.

What do you think of this tool? Would you use it?

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