Credit cards offer new ways to save

Airline tickets, hotel stays, car rentals and rewards cards have been around for years. However, there is now a new type of plastic that lets you pump up the points to help build your nest egg. Some cards are also helping you do away with debt.

In this economy, credit card users have different needs. And now credit card companies are listening. ABC7 Consumer Specialist Ric Romero found a couple of cards that offer different types of rewards, or "plastic perks."

• Schwab Bank Invest First Visa Credit Card
• Fidelity Retirement Rewards Card
• Wells Fargo Home Rebate Card
• Discover Motiva Card
• Discover Paydown Planner

Alexis Rice works hard to protect her financial future. So she tracks her budget closely. But sometimes she misses a payment by a day or two, which leaves her cringing at the late fees. That's the reason Rice quickly signed up for a new reward service that helps keep her credit payments on time.

"It's so confusing knowing when my bill date is that now it will just be automatically taken out of my checking account on a monthly basis," said Rice.

The service is from American Express. It is one of several lenders offering new features from money management tools to savings incentives.

Ken Clark is an author and financial expert. He says companies are listening to today's struggling consumers.

"The trend in credit cards is moving away from rewards that are really leisure- based - free airline tickets, free hotel stays - to things that are more practical," said Clark.

Schwab's Invest First card gives you two percent cash back on purchases. Those rewards can be deposited into your brokerage account. Fidelity's Retirement Rewards card also helps build your nest egg.

"The card features a two percent earn rate on all purchases that can be applied to a cardholder's IRA," said John Ragnoni, Fidelity.

Other companies, like Wells Fargo, allow homeowners to apply cash back toward what is typically their biggest bill.

"The Wells Fargo card rewards us with a one percent contribution toward our mortgage principal. The downside is you have to have a Wells Fargo mortgage," said Clark.

If you're looking to manage your debt, Discover's Motiva card rewards consumers who carry a balance, but pay on time.

"Every time a card member makes six on-time monthly payments in a row, they receive their next month's interest back as a 'pay on time' bonus," said Kelly Tufts, Discover Card.

Discover has also rolled out the Paydown Planner. It is one of many Web applications that calculates how long it will take to hit zero. Members can even pick a target time.

"They can just see right away - in a number form or in graphs - the monthly payment they would need to make to hit their goal date," said Tufts.

Clark warns - as with all rewards cards - you should keep an eye on interest rates, which can run from single digits to 20 percent or higher.

"It only takes a couple of months of carrying one of these balances or a couple months of late fees, to easily outweigh the rewards that we earn," said Clark.

As always, it is important to read the fine print and ask plenty of questions before applying for any one of these credit cards. That way, you can see which one works best for you and there will be no surprises.

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