Money doesn't actually talk. We do.

The Credit-Card Personal Shopper Helps Mary Pilon

At least once a month, I get a call or an email from people who need help picking a new rewards-earning credit card. They know they’re probably not getting as many freebies as they could. Or perhaps their goals have changed – say, from chasing free international first-class travel to saving for college for their kids.

The problem, however, is that it could take days to sort through all of the options. There’s some pretty good sporadic analysis of individual card products at places like fatwallet.com and flyertalk.com. But there isn’t a single site where it’s all nicely organized (Postscript 24 hours later: I should have mentioned Gary Steiger’s terrific site on frequent-flier miles and other loyalty programs, as he rightfully points out in the comments section below; click the “credit cards” link on the left once you get there), let alone a personal shopper who can help pick the right card for you.

All that changes, starting today. Welcome to the Credit-Card Personal Shopper, where I’ll walk confused consumers through a series of questions and then recommend a card that meets their needs.

What qualifies me to do this?

I covered credit cards from a consumer perspective for the Wall Street Journal from 2002 to 2007, a stretch of years when the number of rewards cards exploded. I’m also personally obsessed with milking money out of these programs (click here for the story of how our household earned more than $22,000 in rewards in 2005).

For this first go-round, I’m practicing on Mary Pilon, a New York University senior who’s an intern at FiLife. Next time, I’ll use an actual FiLife reader. Nominate yourself by sending me an email here.

One caveat: If you’re not paying your bill off in full each month, pay no attention to this feature or the rewards that card companies are dangling. Instead, find the card that has the lowest interest rate, pay the debt off and then come on back when you’re ready to chase the goodies.

RL: So what’s your priority here? Earning cash refunds? Traveling for free?

MP: Whatever earns the highest return.

RL: Great answer. The most you can earn from a cash-back card is about 1.5% of what you spend. With cards that earn real airline frequent-flier miles (don’t confused these with cards that call themselves miles cards but are actually giving away their own currency, which isn’t worth anywhere near as much a real airline miles), the return can be 10% or more. But that’s for international first-class travel, which requires tens of thousands of dollars of spending to earn enough miles.

So how much do you spend each month?

MP: About $500. I’m trying to use the card for everything.

RL: And are you willing to pay an annual fee?

MP: No, I don’t think I spend enough to make it worthwhile.

RL: You’re right. In fact, in order to earn a single domestic plane ticket at your current rate of spending, you’d need to use the card for six or seven years. So a cash-back card is probably going to be best for you.

Are there particular places where you tend to spend money most often? I ask because many cash-back cards give you higher refunds at certain types of merchants.

MP: Grocery stores and eating out, according to the analysis that Mint did of my spending.

RL: I’m going to put you in the Chase Freedom card. The card gives you points worth 1% of your purchases for most purchases. But then it does something cool – it looks at 15 categories of spending and then triples your earnings in the three in which you spent the most. So you get 3% back instead of 1% on, say, groceries, movies and a gym membership if you spend a lot on those things in a particular month.

You could be earning 1.25% in total with this other card, but I’m betting that you spend enough in certain core categories to do better than 1.25% with the Chase card.

MP: Do I have to have a Chase checking account or anything to use the card?

RL: No. Very few card issuers require you to have accounts elsewhere at the institution before they’ll let you have their credit card.

A few caveats. The Chase Freedom card caps the bonus points you can earn. If your total purchases in the three top categories go over $600, added together, in any given month, you won’t get the triple points for that spending beyond the $600 you’ve spent. That’s fine for you now, but once you graduate, you’ll need to reassess your spending to see if you’re regularly outrunning that cap. There are much better cards out there for big (or even medium) spenders.

Edgar Dworsky, proprietor of the Mouseprint blog, dives further into the caveats here.

MP: I find all of these different currencies from the different companies confusing. How do I figure out which currency is worth the most?

RL: No reasonable human can be expected to spreadsheet this all out. That’s why we’re launching the Personal Shopper feature.

One more thing – never sign up for a new card without checking for any bonuses that the company is offering to people who sign up. Chase notes its $50 signup bonus right on the home page of the card, but sometime you need to run a Google search (say, for “chase freedom signup bonus,” to find one).

– Ron Lieber