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Cards that keep giving

Reward yourself with plastic that pays you back

With so many cures for Christmas drinking available, you'd think there'd be a remedy for overspending, too, but still we suffer through the same old post-yule regret. So, in the absence of a credit-card hangover cure, we've come up with a way to pre-empt your January doldrums: credit cards that offer you trips, rewards, tickets and equally important, earthbound interest rates to keep your finances grounded.

Standard credit cards
Positioned for users who don't pay their bills in full every month, they offer relatively low interest rates and modest additional advantages: miles programs, discount on rental cars or even cashback that goes right into an RESP or a favourite charity. Added bonus: often there are no big annual fees that make you feel as though you have to recoup that $35 or $40 by spending even more money.

Reduced-rate Ultramar MasterCard (National Bank) Interest rate 14.50 per cent. Annual fee on first card $15. Rewards program Up to 2.5 per cent cashback on gas purchases at Ultramar and up to 1.25 per cent back on all other purchases (with over $6,000 annual in charges). Extras Purchase-protection and extended warranty. Final balance Most cashback cards offer one per cent cashback or less, so 2.5 per cent is excellent. Spending $40 of gas/week charged on your card will generate a $52 rebate at year's end.

Enviro Classic Visa with rewards and low-interest options (Vancity Credit Union) Interest rate 11.25 per cent. Annual fee on first card $50. Rewards program One point toward travel, merchandise, services, charities and even to the purchase of term deposits or RRSPs through Vancity for every $2 spent. Extras Purchase-protection and extended warranty. Final balance Card type represents growing trend to benefit nonprofit organizations. For example, there's the Amnesty International Visa card that gives 10 cents on every transaction to charity.

TD Emerald Visa Interest rate Prime plus 1.90 per cent to 6.90 per cent (current prime rate is 6 per cent). Annual fee on first card $25. Rewards program None. Extras Preferred rates at Budget Rent A Car. Final balance Terrific basics. A strict no-frills card with bargain-basement rates as low as 7.90 per cent based on current prime. The minimum personal income required to apply is very low ($12,000). A downside is that as prime rate – the interest rate charged to a bank's best customers – moves up, so does the rate.

American Express Air Miles Credit Card Interest rate 18.50 per cent. Annual fee on first card Free. Rewards program A point for every $20 spent. Extras Accident insurance when travelling and 100 free Air Miles with first purchase. Final balance Although some gold and platinum cards award one Air Mile for every $15 spent, this no-fee card is still great value. You can charge your purchases at more than 100 retailers and earn extra points. WestJet will redeem flights for as little as 1,600 points for a short haul – that's only after you've spent $32,000. A relative bargain.

Gold and platinum cards
The allure is benefits, rewards and travel-protection. To make up for the pricey membership fees, you need to use and abuse them, pay the balance off quickly and collect your well-spent rewards. But a recent study found that even though 60 per cent of consumers said these kinds of reward programs influenced their choice of card, only half of the users had redeemed any points after five years.

CIBC Dividend Platinum Card Interest rate 19.50 per cent. Annual fee on first card $79. Rewards program Up to two per cent cashback. Extras Travel benefits including accident, car rental insurance and purchase protection and extended warranty. Up to $50,000 credit limit. Final balance Many cash back cards offer tiered rewards: greater returns for greater spending. With this card, your first $3000 in spending will earn you a 0.5 per cent rebate and it is not until you have spent $35,000 that the two per cent rebate kicks in.

American Express Costco Platinum Cash Rebate Card Interest rate 16.75 per cent. Annual fee on first card Free. Rewards program Cash rebate up to two per cent of purchases; coupon issued in January and redeemable for goods, services or cash. Maximum rebate $500. Extras Travel accident insurance and purchase protection and extended warranty. Final balance For those carrying a balance, the rewards are unlikely to pay for themselves. Also, AmEx is accepted at fewer retailers than Visa or MasterCard, so you can't use it as often.

Charge cards
Cards may require minimum annual incomes as high as $60,000. There is no pre-set credit limit and cards offer decent benefits and reward programs. The downside: charges must be paid monthly, and annual card fees can run as high as $399. Only American Express offers consumer charge cards in Canada.

American Express Card Annual penalty interest rate 30 per cent. Annual fee on first card $55. Rewards program One point for every $1 spent. Spend 6,000 points for a $50 Sporting Life gift certificate. Extras Free travel insurance, purchase- protection and extended warranty. Final balance A low-fee charge card with OK rewards such as good seats at some shows and concerts. AmEx cards are accepted at fewer retailers than credit cards. You really only want one if you don't want a spending limit and you can pay off your bills pronto or face the punitive 30 per cent interest rate.

The American Express Platinum Card Annual penalty interest rate 30 per cent. Annual fee on first card $399. Rewards programs 1.25 points for every $1. Extras Range of travel-related insurance including accident, car rental, flight delay, baggage and extended warranties. Travel service and car rental upgrades, too. Final balance Cardholders are paying for travel benefits that include preferential treatment at luxury hotels and restaurants. Otherwise cardholders need to spend a lot of money to recoup the whopping fee. Spend $4,800 and get a $50 gift certificate to Roots or The Home Depot.

Retail cards
Great for rewards. The downside: interest rates are punitive. In 1981, retailers boosted rates to 28.8 per cent, which was a bargain when the prime lending rate had rocketed to 22.75 per cent. Today's prime is 6 per cent. One more caveat: before you sign up, check that the store doesn't have an existing loyalty program that offers the same benefits without applying.

Sears Card (JPMorgan Chase Bank, N.A.) Interest rate 28.80 per cent. Annual fee on first card Free. Rewards program Certificates for travel, merchandise, entertainment and dining. Every $1 spent garners one point; 1,000 points gets you a $15 gift certificate. Extras Use the card at a select group of retailers and points toward certificates at Pharmasave and Blockbuster. Final balance If you have the right combination of cards – Petro-Points, President's Choice and Sears – you can trade $300 worth of groceries at Loblaws for a $600 Sears gift certificate. But watch the interest rate.

Wal-Mart Credit Card (GE Consumer Finance Canada) Interest rate 28.80 per cent. Annual fee on first card Free. Rewards program None. Extras None. Final balance If you ask retailers why interest rates on their cards are so high, they will talk instead about convenience and rewards for loyal customers. Though the Wal-Mart card hasn't yet coughed up rewards, it does offer customers a unique option especially helpful around the holiday season: a three-month, "no payments, no interest" introductory offer for purchases more than $199.

Find your perfect plastic: Introduction Standard credit cards Gold and platinum cards Charge cards Retail cards
*Interest rates cited (except the Wal-Mart card) are drawn from the Financial Consumer Agency of Canada's June 2006 consumer reports on credit cards and don't include special limited-time rates.

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