American Express is offering a relatively new (well, a few months old) credit card called One. As you spend, 1% of each purchase is automatically deposited into a savings account that’s currently earning 3.5% APY. It’s not a horrible interest rate, beating that of most traditional banks, but barely in the mix compared to interest rates from online banks.
I’ve seen some write-ups about American Express One on a few blogs. Not “One” person mentioned the especially heinous $35 annual fee (waived for the first year) hidden discreetly in the small print of the application. Most people would be better off with a rewards card like the CitiBank Dividend Platinum Select. That’s my card of choice, offering 5% back at grocery stores, gas stations, and drug stores and 1% back on everything else.
It goes without saying that the only way to take advantage of credit cards offering rebates is to pay the balance off in full every month.
Updated January 12, 2011 and originally published December 20, 2005. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.