Chase Freedom

APR (purchases): 17.49%*
Annual Fee: None*

*These are accurate as of 12/02/2007 please check my full review of chase freedom for current APR and annual fee.

They call it the Chase Freedom card, because you are free to switch your reward from cash to points at anytime without penalty.

Their reward program is a little tricky to understand; you earn a 3% rebate on purchases made in the three bonus categories you spent the most money in for that billing period. You also earn a 1% rebate on all other purchases. There are fifteen bonus categories:

Grocery stores

Gas stations

Quick service restaurants

Telecommunications

Cable/satellite TV/Internet service providers

Video rentals

Department stores

Dry cleaners

Drugstores

Movie theatres

Local and suburban commuter passenger transportation

Pet supply stores and veterinary services

Utilities

Beauty shops

Gym/recreation memberships

Let's say you spend the most money at the grocery store, gas station, and video rentals. You would earn 3% back from those totals and 1% back on every other purchase. You also earn a $50.00 bonus after your first purchase. You can redeem your cash after you have $50.00, or if you wait until you have earned $200.00 you will get a $250.00 check.

Receiving 3% off of what you spent for your three highest bonus categories sounds good. There is no limit to how much you can earn. Many cards offer a reward rate that is comparable to the Chase Freedom card.

For instance a Blue Cash American Express card gives you a 1.5% rebate off of every purchase and a 5% rebate off on purchases made at gas stations, drug stores, and super markets. The Blue Cash card's APR is much lower at 12.47%, but if you don't have an established credit history you might not be approved for a Blue Cash card.

If you can't get a better reward credit card, and you plan on paying off your balance every month then you should apply for a Chase Freedom card.