You head off on your errand run and swing by Costco to stock up on paper towels, potato chips and protein bars. You’re calculating how much you’re saving in your head and head to the register. That’s when it hits you.

You don’t have a Visa credit card and don’t have enough cash to pay for the items in your cart. You take out your trusty American Express card to swipe it through the machine only to see that the payment doesn’t go through.

Why doesn’t my American Express card work at Costco?

For a long time, starting in 1999, American Express was Costco’s exclusive credit card partner. It was the only type of credit card accepted at the store, and if members of the wholesale giant wanted a credit card with Costco-related rewards, their only option was to get a co-branded American Express/Costco card.

But that changed when Costco and American Express decided to end their relationship in 2016. After that, Costco went on to name Citi as its exclusive credit card issuer and Visa as its new exclusive credit card network for Costco in the U.S. and Puerto Rico. Since then, American Express has been out and Citi along with Visa has been in — and that has a few implications for Costco members.

Today if you want to use a credit card after shopping at the bulk superstore, there are a few things you should know.

• You can only use a Visa if you’re paying by credit card at Costco (unless shopping online at Costco.com).
• If you want a co-branded credit card with a Costco logo on it, you can now only get it through Citi.
• In addition to Visa cards, Costco still accepts cash, checks, most debit and ATM cards, electronic benefit transfer (EBT) and Costco Shop Cards at Costco warehouse locations.

So, what cards do work at Costco?

If you’re a Costco fan but don’t have a Visa credit card, there’s no need to worry. There are many cards available to meet your needs and still give you the option to continue shopping at Costco.

Here’s one we recommend checking out.

Costco Anywhere Visa® Card by Citi 

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Costco Anywhere Visa® Card by Citi

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Costco Anywhere Visa® Card by Citi is a co-branded Costco/Citi credit card and a great option for frequent Costco shoppers. It’s a rewards card that gives you cash back at the pump, when eating out, while shopping at Costco, on Costco.com purchases and more.

Here’s a full summary of the cash back rewards you’ll get with this card.

• 4% cash back on eligible gas and electric vehicle charging purchases around the world and at Costco gas stations (up to $7,000 annually, 1% cash back after that)
• 3% cash back at restaurants and on eligible travel purchases
• 2% cash back on all other purchases from Costco and Costco.com
• 1% cash back on all other purchases

A quick note on cash back rewards: You’ll get an annual reward certificate at the close of the billing cycle each February summing up the amount of cash back you accrued throughout the year. You can then redeem your cash back at any Costco warehouses in the U.S. in the form of cash or merchandise.

The card also doesn’t have an annual fee if you have a paid Costco membership. But you’ll need a Costco membership to shop at the store, and annual memberships range from $65 to $130. Fortunately, once you have a membership, this card can act as your membership ID card.

Is the Costco Anywhere Visa® Card by Citi right for you?

Your lifestyle and interests can play important roles when deciding on a rewards card. Costco Anywhere Visa® Card by Citi might be a great fit if you shop regularly at Costco, enjoy eating out and fill up your gas tank at least weekly.

But you may find a different Visa that better matches your needs.

Bottom line

Before you head out to Costco, make sure there is a Visa in your wallet if you’re going to use a credit card because your American Express card won’t work there.

Whether you decide to go with the Costco Anywhere Visa® Card by Citi or another Visa card depends on your situation and interests. No matter which card you choose, make sure it makes sense for you and gives you what you want from a credit card.

This article was fact-checked by our editors and Christina Taylor, MBA, senior manager of tax operations for Credit Karma.

When you or a spouse serve as an active military member, you’re entitled to the same tax benefits available to civilians — plus, you may be eligible for some special tax considerations too.

Being a member of the armed forces means you’re able to take advantage of special tax breaks. Let’s look at tax tips for military families that could improve your odds of getting a refund.

• You could get an extension of your filing deadline
• Gross income for military families
• Tax breaks for military families
• Filing taxes when you’re serving overseas

You could get an extension of your filing deadline

Military families have special demands on their time, from across the country or the globe, to serving overseas or in combat zones. The IRS recognizes special circumstances can make it challenging for military service members and their families to meet tax filing deadlines.

You may have multiple opportunities to extend your filing deadline, including …

• Regardless of military status, you can get a six-month extension by filing Form 4868. Keep in mind that filing for an extension doesn’t mean you can pay late, it simply gives you more time to file your return. Interest will apply and you could face penalties if you choose to pay your taxes after the filing deadline.
• If you’re serving outside the U.S., you can get an automatic two-month extension. If you need another four months, just file Form 4868 by June 15.
• If you or your spouse is serving in a combat zone, a contingency operation outside the U.S., or have qualifying service outside a combat zone, you can get the lengthiest possible extension. Initially, you have 180 days after your last day in a combat zone, contingency operation of other qualifying service, or following your last day of hospitalization because of injuries sustained during your combat, contingency or qualifying duty. Additionally, any amount of time you had until your filing deadline before you entered the combat zone, contingency operation or other qualifying service gets tacked on to your 180-day extension. For example, if you began your special service three months before the tax filing deadline, your new deadline is the 180 days plus three months.

Other situations and circumstances may also entitle you to a filing extension because of your military service. Check out the IRS’ Armed Forces Tax Guide to learn more.

Gross income for military families

Military families typically have multiple types of income and allowances from their active duty. Not all the money you receive for your services is considered gross income. Money that’s not included in your gross income is money that can’t be included in your taxable income — which means you can’t be taxed on it.

Here are some items that are included in gross income.

• Basic pay (the money you get for your active duty)
• Special pay (such as special duty assignment pay)
• Bonus pay (for example, the bonus you get for enlisting or reenlisting)
• Incentive pay (such as pay for taking on hazardous duty)
• Other pay (such as accrued leave)
• In-kind military benefits (such as personal use of a government-supplied vehicle)

The items below are typically not included in gross income, but you may still have to report them on your income tax return.

• Combat pay (compensation for active service while in a combat zone)
• Certain educational expenses for dependents
• Uniform allowances
• Housing and cost-of-living allowances abroad paid by the U.S. Government or by a foreign government
• Certain moving and travel allowances
• Medical and dental care benefits

There are many more on each list. For a full list, check out the IRS’ Armed Forces Tax Guide.

Tax breaks for military families

In addition to benefiting from the same tax benefits as civilians, your military status gives you added benefits at tax time. Let’s look at some of the specific military-related tax benefits, as well as other ways to save on taxes.

Combat pay exclusion

Combat zone pay is partially or fully tax-free. The same goes in some cases for those who serve in support in a combat zone.

To be eligible, you must receive special pay for duty “subject to hostile fire or imminent danger” that’s certified by the Department of Defense. You must also meet one of three options:

• Option 1: You serve in an active combat area designated by executive order.
• Option 2: You serve in a Department of Defense–designated support area “in direct sustainment of military operations in the combat zone.”
• Option 3: You serve in a Department of Defense–designated contingency operation.

See a full list of what’s considered recognized combat zones.

Earned Income Tax Credit

You can include nontaxable combat pay in your taxable income total. Why would you want to add something that’s not taxable? It can help increase your earned income tax credit, which could mean you owe less tax. The result could be a larger refund.

Your nontaxable combat pay will be on Form W-2 in box 12 with code Q.

Your EITC may increase or decrease when you add combat pay, so you should run the numbers to see whether you want to add nontaxable combat pay to your taxable income. Whether it increases or decreases depends on your total earned income, filing status and number of qualifying children.

Find the EITC eligibility amounts on the IRS site.

One factor to be aware of — claiming the EITC could delay your tax refund. That’s because federal law requires the IRS to wait until at least mid-February before issuing a refund to anyone who claims this credit.

Moving expense deduction

The Tax Cuts and Jobs Act did away with allowing civilians to deduct unreimbursed moving expenses. But as active-duty military, you can still deduct moving expenses as long as your move is for a permanent change of station.

It’s considered a permanent change of station if the move is your first post of active duty, a move from one permanent post of duty to another, or a move from your last post of duty to your home or a nearer point in the U.S.

If you qualify for the moving expenses deduction, you’re limited on what you can deduct, such as …

• Packing and shipping costs
• Connecting and disconnecting utilities
• Storing and insuring household goods and personal items within 30 days from when your possessions are moved from your former home
• Shipping your car and household pets
• Mileage and tolls if you drove to your new home during the move

The IRS suggests deducting only “reasonable expenses.” In other words, don’t put down the detour you took to sightsee when moving to your new residence. Instead, put down the direct mileage.

You also can’t deduct expenses for moving services the government provided to you, or that were reimbursed by an allowance you didn’t include in your income.

Use Form 3903 for your moving expenses.

Travel deduction for reservists

Members of a reserve component of the armed forces can be eligible for a travel expense deduction. To qualify for this deduction, the unreimbursed travel expenses must be related to your reservist duties that require you to travel more than 100 miles from home.

You would report this by using either Form 2106, Employee Business Expenses, or Form 2106-EZ, Unreimbursed Employee Business Expenses. You may also need to enter that information elsewhere.

Uniform deduction

Not only does your uniform allowance get excluded from your gross pay, you may also be able to write off some of the cost of some uniforms. If you have uniforms you can’t wear when off duty, the IRS allows you to deduct the costs of buying and maintaining those uniforms. But you’ll need to reduce the deduction by any nontaxable allowance or reimbursement you already got for the uniforms.

Education expenses deduction

Serving in the military might mean you need to take classes. That education can be tax-deductible.

You’re able to deduct unreimbursed costs related to qualifying work-related education, even if the education could result in a degree.

To take advantage of this deduction, the education must be required by your employer or law to keep your present salary, status, or job, or must maintain or improve skills needed for your work. The education isn’t eligible if it’s needed to meet minimum educational requirements for your trade or business or is part of a program of study that allows you to qualify for a new trade or business.

Filing taxes when you’re serving overseas

Choosing the filing status of married filing jointly can afford you some tax benefits. But joint returns usually need both signatures. What do you do when you or your spouse are serving overseas? There are ways around it if you’re serving in the military.

If you’re serving in a combat zone, your spouse can sign for you and attach a signed statement to the form explaining the situation.

If you’re overseas or in a combat zone, you can also file Form 2848 that designates your spouse to sign the return in your absence. Alternatively, you could designate your spouse to have power of attorney so that your spouse can sign forms in your absence.

Bottom line

Your or your spouse’s military service doesn’t just earn you the gratitude of the country you serve, it also qualifies you for some special considerations when filing your tax returns. In addition to access to the same tax opportunities given to civilians, you also benefit from military-specific tax deductions and considerations.

If your situation is complicated, or you need to file tax returns in multiple states, check with your base for help. Most military bases provide free on-site tax preparation assistance for military families.

Christina Taylor is senior manager of tax operations for Credit Karma. She has more than a dozen years of experience in tax, accounting and business operations. Christina founded her own accounting consultancy and managed it for more than six years. She co-developed an online DIY tax-preparation product, serving as chief operating officer for seven years. She is the current treasurer of the National Association of Computerized Tax Processors and holds a bachelor’s in business administration/accounting from Baker College and an MBA from Meredith College. You can find her on LinkedIn.

This article was fact-checked by our editors and reviewed by Christina Taylor, MBA, senior manager of tax operations for Credit Karma.

Doing your taxes might seem like the financial equivalent of a root canal, but there are many reasons why you shouldn’t wait to the last minute to file taxes.

Compromising on accuracy, discovering you don’t have all the paperwork you need or even missing the filing deadline are among the risks you face if you procrastinate on doing your income taxes. Delaying won’t make the task take any less time, either.

How long does it take to file taxes?

Yes, someone actually invested the time to figure out how long it takes to file taxes.

According to the IRS, it takes the average person about 15 hours to file a 1040 tax form — the one 69 percent of filers use. Those 15 hours include:

• Seven hours on record keeping
• Two hours on tax planning
• Four hours completing the form and submitting it
• An hour on other tax-related activities

Even the easiest tax forms take a while. A 1040EZ, which is the most basic tax return, takes five hours for the whole process. Three of those hours are spent on completing the form itself. That’s still a long time for one task that’s supposed to be “EZ.”

Why you shouldn’t wait until the last minute

Now that you know how long it could take to file your taxes, aren’t you eager to get started? Still not convinced? Here are some reasons why you shouldn’t wait until April to file:

1. It’s a long process

In the U.S., preparing and filing taxes isn’t a quick process. A lot more goes into filing taxes than just filling out the form and submitting it to the IRS. Unless you’ve kept on top of it all year, you’ll have a year’s worth of information and tax-related forms to organize. You may find you’re missing information or documents you need in order to complete your tax return.

2. You could get your refund faster

The longer you wait to file, the later you’ll get your refund. If you file in February or March, the IRS may turn it around more quickly because it isn’t as busy. Americans are procrastinators when it comes to taxes — more than 20 million Americans wait until the last week to file. The IRS says it issues nine out of 10 refunds within 21 days of receiving a return. Don’t wait until the last minute to file taxes like the procrastinators if you want to get your return in a timely fashion.

3. Don’t risk being late

Procrastinating may work in other aspects of your life, but it’s not a good habit when it comes to filing taxes.

Let’s say you plan on spending the final weekend before the filing deadline on your taxes. That weekend comes and you have a family emergency. Or maybe your basement floods from heavy springtime rain. Or you get tickets to a baseball game.

Life could get in the way of your last-minute plans and prevent you from meeting the filing deadline. If you miss the deadline, you’ll still have to file your taxes, but you could face penalties and interest for being late.

4. You might have issues preparing your taxes

You’ve done your taxes every year, so there won’t ever be any issues, right? Wrong.

You might not know if you’re missing important documents until you dive into your taxes. Or you may find a deduction you took last year that saved you a lot of money isn’t available to you this year — and you need to find another deduction, pronto.

Instead, collect your tax information in a folder throughout the year and plan to spend time well before April to prepare your taxes.

5. Haste makes waste

Old sayings stay around for generations because they’re usually right. When it comes to waiting to the last minute to file taxes, the saying “haste makes waste” often applies.

When you rush, you’re more likely to feel stressed, and stress can lead to mistakes. You could provide wrong information, forget to include an income source or even jot down the wrong Social Security number.

Tips for faster filing

By the end of February, you should have most, if not all, the tax forms you need to file your income tax return. The IRS requires employers to send your W-2 to you by Jan. 31 every year, and if you’re self-employed, anyone who owes you a 1099 is supposed to have it to you by Feb. 15.

Organize tax documents in a folder as you receive them throughout the year. As soon as you have everything you need, start preparing your tax return. E-filing gets your tax return to the IRS faster, and could result in getting your refund sooner as well.

If your adjusted gross income is $64,000 or less, you can use the IRS Free File. If you made more than that, or if you just want a little extra guidance in e-filing your taxes regardless of how much you earned.

Bottom line

Tax preparation should never be a last-minute task. If you put some time into planning and organizing throughout the year, and start preparing your return as soon as you’re able rather than waiting to file taxes, you could find tax season a whole lot less stressful.

Christina Taylor is senior manager of tax operations for Credit Karma. She has more than a dozen years of experience in tax, accounting and business operations. Christina founded her own accounting consultancy and managed it for more than six years. She co-developed an online DIY tax-preparation product, serving as chief operating officer for seven years. She is the current treasurer of the National Association of Computerized Tax Processors and holds a bachelor’s in business administration/accounting from Baker College and an MBA from Meredith College. You can find her on LinkedIn.

This article was fact-checked by our editors and Christina Taylor, MBA, senior manager of tax operations for Credit Karma. It has been updated for the 2020 tax year.

And while the payoff for getting a degree is usually better earning power throughout your career, it’s normal to feel financially crunched while you’re in college. You might be able to get some relief in the form of a lower tax bill if you qualify for the American Opportunity Tax Credit, or AOTC.

Let’s take a look at the AOTC, who’s eligible, how to claim the credit, what are qualified expenses, and other education-related tax credits and deductions.

• What is the American Opportunity Tax Credit?
• Who is eligible for the American Opportunity Tax Credit?
• How do you claim the credit?
• What are qualified expenses and what are not?
• What are other education-related credits and deductions?

What is the American Opportunity Tax Credit?

Just like any other tax credit, the AOTC reduces the amount of tax owed by you or the person claiming the credit (for example, your parents). Here’s how it works:

The credit repays you 100% of the first $2,000 of qualified education expenses for each eligible student. For example, parents with two or more students in their first four years of college may be able to claim the credit for each student.

The credit also repays 25% of the next $2,000 of qualified education expenses ($500). However, if the initial portion of the credit reduces the tax you owe to zero, you can get 40% of the remaining amount (up to $1,000) back as a refund.

“The AOTC provides a great financial benefit per dollar of tuition and textbook expenses,” says Mark Kantrowitz, an independent student financial aid, scholarship and student loan expert. However, he adds, if you don’t have much tax liability to begin with, the refund portion of the credit might not benefit you.

Who is eligible for the American Opportunity Tax Credit?

The AOTC has multiple eligibility requirements. It’s important to make sure you’re eligible for this tax credit before filing your taxes so that you don’t potentially trigger an audit.

First, you need to check income limits. For you to claim a full $2,500 AOTC credit, the claimant’s modified adjusted gross income, or MAGI, must be $80,000 or less for an individual or $160,000 or less for a married couple filing jointly.

If you’re a single college student claiming the credit for yourself, you’ll probably have no problem meeting the MAGI limits to qualify for the full credit. It may be more difficult for your parents to claim the credit because their MAGI may exceed the income limitations.

You can get a reduced credit if your MAGI is between $80,000 and $90,000 for an individual and between $160,000 and $180,000 for a married couple filing jointly. If your MAGI is $90,000 or more as an individual or $180,000 or more as a married couple filing jointly, you are not allowed to claim the credit.

Additional eligibility requirements include:

• You must be pursuing a degree or other recognized educational credential.
• You must be enrolled at least half-time for at least one academic period that began in the tax year.
• You must be in your first four years of higher education, which means you can’t claim the credit if you are in your fifth, sixth, etc. year of college. So if you take some extra time to complete your undergraduate degree or if you’re headed to grad school, you might be out of luck.
• You can’t have claimed the AOTC (or the former Hope credit) for more than four tax years.
• You can’t have a felony drug conviction within the tax year.

If you meet the income and eligibility requirements, you can claim the AOTC on your taxes.

How do you claim the credit?

Your college should send you a Form 1098-T Tuition Statement by Jan. 31. You will need this statement to receive your AOTC. Notify your college if you don’t receive it. Make sure to keep this form and any other records related to the tax credit in case the IRS requests the data.

The form will include amounts received or billed during the tax year. You’ll find that amount in either Box 1 or 2. Note: This might not be the total amount you can claim. You may also be able to claim other qualified education expenses, which we’ll discuss later.

To claim the AOTC, you will need to use Form 8863 and attach the completed form to your Form 1040.

A friendly tip: You cannot claim the AOTC in the same taxable year that you claim the tuition and fees deduction. You must choose between the AOTC or take a deduction for tuition and fees. If you choose to take the tuition and fees deduction, you may be able to claim up to $4,000 for qualified tuition and fees.

Keep in mind, the IRS says the AOTC usually results in greater tax savings than the deduction, but suggests that you calculate both to see which would benefit you the most. Remember, deductions reduce the amount of income you’re taxed on while credits reduce the amount of tax you owe.

Can I claim the AOTC if my parents also claim it?

No. Only one tax filing can claim the AOTC, so it’s important to discuss this with your parents to make sure you’re not both claiming the credit. You also can’t claim the AOTC and the Lifetime Learning Credit in the same tax year.

What are qualified expenses and what are not?

AOTC qualified expenses include tuition, required fees and course materials, including books, supplies and equipment needed to take the course. These expenses must be at an eligible post-secondary educational institution. A computer may qualify for the tax credit, but it must be required “as a condition of enrollment or attendance” at the college.

Not all college-related expenses are eligible. Ones that aren’t eligible include:

• Room and board
• Transportation
• Insurance
• Student fees that aren’t required

What are other education-related credits and deductions?

Not everyone is eligible for the AOTC. The good news is the IRS offers other tax credits and deductions for college students:

• Lifetime Learning Credit – The Lifetime Learning Credit is for qualified tuition and related expenses for eligible students enrolled in eligible educational institutions. The credit is up to $2,000 per tax return, and there are no limitations as to how many years you can claim this credit.
• Student loan interest deduction – If you qualify for the student loan interest deduction, you can deduct the lesser of $2,500 or the amount of interest you paid during the tax year.

Remember, deductions and credits come with conditions, and in order to claim them, you must meet the qualification requirements. Be sure you understand what the qualifications are before attempting to claim any deduction or credit.

Bottom line

College costs continue to rise. The average cost of undergraduate tuition at a public four-year college rose 3.1% between the 2016-2017 and 2017-2018 academic years, according to the College Board. Between the 1987-1988 and 2017-2018 school years, it soared 213%.

If you qualify for it, the AOTC is one way to reduce your taxes and possibly get a refund. You could then use that money to make interest payments on student loans, pay required enrollment fees or spend on next semester’s books.

The American opportunity tax credit can remove up to $2,500 from your tax bill, but don’t forget other ways you can save on your taxes. Make sure to run the numbers and see which education tax credits or deductions make the most sense for your situation.

Relevant sources: IRS: American Opportunity Tax Credit | IRS: American Opportunity Tax Credit: Questions and Answers (archival) | IRS Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits) | IRS Publication 970: Tax Benefits for Education (2019)

Christina Taylor is senior manager of tax operations for Credit Karma. She has more than a dozen years of experience in tax, accounting and business operations. Christina founded her own accounting consultancy and managed it for more than six years. She co-developed an online DIY tax-preparation product, serving as chief operating officer for seven years. She is the current treasurer of the National Association of Computerized Tax Processors and holds a bachelor’s in business administration/accounting from Baker College and an MBA from Meredith College. You can find her on LinkedIn.

This article was fact-checked by our editors and reviewed by Christina Taylor, MBA, senior manager of tax operations for Credit Karma. It has been updated for the 2019 tax year.

The first years after college graduation are full of milestones.

In addition to getting your degree, you might have started your career, moved out of your parents’ house, begun saving for retirement or bought a car. Soon, you’ll face another rite of passage: filing your taxes as a college graduate.

If you worked through high school and college, you probably already filed income tax returns. But now you have a career, more income, and possibly some credits and deductions. Doing your taxes will require more than just handing over your W-2 to your parents or their accountant.

Now you need to organize receipts and tax documents, minimize your taxable income, and maximize any deductions and credits that may be available to you. Here are  tax tips for college graduates that could help you.

1. Organize tax documents in one place

Tax preparation requires a lot of paperwork, even if you plan to e-file. Gather and organize all your important tax documents in one place. A simple folder or large envelope will do.

Forms and documents you may need to file your taxes include (but aren’t limited to):

• Your W-2 from your employer.
• 1099s if you’re self-employed full or part time.
• Receipts for charitable donations.
• A 1098-E that shows interest you paid on your student loans.
• 1099-INTs for any interest you earned on bank accounts or investments.

2. Student loans can help at tax time

Did you notice we mentioned a 1098 above? That’s because student loan debt often follows four years of college. You may think repaying yours is a pain, but your student loan can benefit you at tax time. That’s because some of the interest you pay on your student loan could be tax deductible.

The IRS allows you an annual deduction of up to $2,500 of the interest paid on your student loans during the tax year if:

• Your modified adjusted gross income is less than $85,000 for an individual or $170,000 if you’re married and filing jointly.
• You’re legally obligated to pay interest on a qualified student loan.
• Your filing status isn’t married filing separately.
• And no one is claiming you as a dependent on their taxes

To claim this deduction, you’ll need to use Form 1040. Since the student loan interest deduction is claimed as an adjustment to income on Form 1040, you can claim it even if you don’t itemize deductions on Schedule A.

3. Continuing education may be credit-worthy

The rapid pace of the business world may mean you have to start taking classes to keep up your skills almost as soon as you start working in your first job.

The Lifetime Learning Credit could allow you to recoup up to $2,000 of tuition and fees for you, your spouse or a dependent, if you have a modified adjusted gross income of $65,000 or less ($130,000 or less for a married couple that files jointly).

4. Look for ways to reduce your taxable income

Reducing your taxable income can reduce your tax burden, and could even lead to a bigger refund if you’re eligible for one. There are multiple ways to reduce your taxable income, and three of the most common — and most useful for newly graduated young professionals — are:

• Retirement accounts, like a 401(k) or Individual Retirement Account (IRA).
• Health Savings Accounts (HSAs) and Flexible Savings Arrangements (FSAs).
• Charitable donations.

Retirement accounts

You just graduated from college, so you’re probably more focused on building your career than growing your retirement savings. But saving for retirement doesn’t just create a nest egg, it helps you reduce your taxes now.

That’s because the money you contribute to a 401(k) is considered pre-tax, meaning it doesn’t figure into your taxable income. What’s more, when the investments you make through your 401(k) earn you more money, you won’t pay taxes on that income either until the day you withdraw it. At that time, your tax will be based on the tax rate for your tax bracket during retirement, which, in theory, will be less than your tax rate now while you’re working full time.

IRA contributions can work similarly, although whether your IRA contributions are tax deductible can depend on your income, the type of IRA (traditional or Roth) and other factors.

Remember, the IRS puts limits on how much you can contribute to your retirement plans (401(k), IRAs, etc.) in a single year. It pays to check out the limits, so you know exactly how much you’re allowed to contribute.

Saving for retirement can be complex, so your best bet is to read up on what the IRS has to say about your options. You can find information on 401(k)s here, information on traditional IRAs here and on Roth IRAs here.

Health Savings Accounts and Flexible Spending Arrangements

HSAs and FSAs are two ways to manage healthcare-related costs while gaining some tax benefit.

HSAs are connected to high-deductible health plans, or HDHPs. These plans have low premiums but high deductibles. They also come with higher out-of-pocket costs, so you pay more for healthcare services than people in other health plans.

HSAs can help pay those out-of-pocket costs, up to certain limits. The IRS doesn’t tax HSA contributions or cash withdrawals to pay for qualifying medical expenses.

It’s important to understand that not everything healthcare related will be a qualifying expense that you can pay for using HSA funds. If you have a high-deductible health plan and an HSA, check with the plan administrator for a list of eligible expenses.

Money left over in your HSA at the end of the year stays in the account. It’s yours and can continue to grow tax-free.

FSAs are similar to HSAs but have some key differences. FSAs let you contribute tax-free to an account for your healthcare costs, but any money left in the FSA at the end of the year goes away. So you want to make sure you spend the FSA dollars before you lose them. Again, it’s important to know what expenses qualify to be paid for with FSA dollars, so talk to your plan administrator.

Charitable donations

Donating to charity is another great way to reduce your taxable income, while also doing something good for others.

Charities must be qualified organizations in order for you to deduct contributions. You can search online at IRS Exempt Organizations Select Check for qualified organizations. However, keep in mind this list doesn’t necessarily include every eligible organization. If you file a tax deduction for charitable giving, you need to itemize it on Schedule A on your Form 1040, on lines 16-19.

Make sure you have proof of the donation. This can include a canceled check, credit card receipt or receipt from the eligible charitable organization you donated items to. You’ll want to make sure the receipt shows the date of donation and an itemized list of what you donated.

5. Don’t be afraid to do your own taxes

Once you start working, your taxes probably won’t be quite as simple as they were when you were in college. But don’t let the added complexity intimidate you into spending money on paid tax preparation. Chances are you can still do your taxes yourself, even if you have student loan interest, moving expenses, retirement savings, HSAs and charitable contributions to handle.

Bottom line

Graduating from college can change every aspect of your life, including how you file your taxes. Armed with these tax tips for college graduates, and the confidence to file your own taxes, you can improve your chances of reducing your tax burden and maximizing any refund you’re due.

Christina Taylor is senior manager of tax operations for Credit Karma. She has more than a dozen years of experience in tax, accounting and business operations. Christina founded her own accounting consultancy and managed it for more than six years. She co-developed an online DIY tax-preparation product, serving as chief operating officer for seven years. She is the current treasurer of the National Association of Computerized Tax Processors and holds a bachelor’s in business administration/accounting from Baker College and an MBA from Meredith College. You can find her on LinkedIn.

This article was fact-checked by our editors and reviewed by Christina Taylor, MBA, senior manager of tax operations for Credit Karma.

The good news is you can still make financial moves that will help you at tax time. When trying to maximize your federal income tax refund, a great place to start is to look at your taxable income and work on reducing that before the end of the year.

Less taxable income = less tax to pay

Your taxable income is basically what you get paid after deductions and exemptions are taken out of your gross income. You can find a list of examples of taxable income here.

Reduce your taxable income, and you can reduce the amount of taxes you owe for the year. The IRS taxes you based on your taxable income. There are seven tax brackets for federal income tax, and how they work can be confusing.

Here are two examples to help you understand how a small difference in taxable income can create a big difference in how much tax you pay. Please note, these are rough estimations that don’t take into account any potential deductions or exemptions that would also reduce taxable income.

Imagine a couple that files their taxes jointly and has a total taxable income of $75,000. Technically, they fall into the 12% tax bracket. However, they don’t pay 12% on the total amount. Instead, they will pay 10%, the tax bracket below theirs, on the first $19,050 of their income. They will only pay 15% on the taxable income in excess of that first tax bracket threshold.

This is an example of the marginal tax rate in action.

Now imagine a second married couple, also filing jointly, that has a total taxable income of $85,000 — just $10,000 more than the first couple. Like our first couple, the second couple will pay 10% percent on the first $19,050 of their taxable income. Then they’ll pay 12% percent on the next $58,349 of their income. After that, there’s only $7,601 left over in the 22% category ($19,050 + $58,349 + $7,601 = $85,000).

So while the second couple only makes $10,000 more per year than the first, their income is subject to a higher marginal tax rate than the first couple, and unless they’re able to reduce their tax obligation with tax deductions or tax credits, they’ll likely pay more in tax.

However, if our second couple take steps to reduce their taxable income, they could find themselves in the same tax bracket as Couple A, and paying the same marginal tax rate.

Here are three simple ways to decrease your taxable income.

1. Put more into your retirement account

Putting money away for retirement not only builds your nest egg, it can also help reduce your taxable income now. If you haven’t already maxed out your retirement account contributions, consider doing so before the end of the year.

Retirement funds like 401 (k) and traditional IRA accounts are tax-deferred, which means you’ll pay the tax when you withdraw from those accounts later. That means you don’t pay taxes on them now, and they don’t go toward your taxable income. Don’t forget that this doesn’t apply to Roth IRAs or Roth 401(k)s. All the money contributed to those accounts is post-tax, which means that contributions cannot lower your taxable income.

For the 2018 tax year, the IRS lets you contribute:

• Up to $18,500 (or $24,500 if you’re 50 or older) to a traditional 401(k) account annually
• Up to $5,500 (or $6,500 if you’re 50 or older) to a traditional IRA each year

Whenever possible, it’s a wise financial decision to maximize your retirement contributions annually — it helps your retirement accounts and will help you save at tax time. Dec. 31 is the deadline for making 401(k) contributions for the tax year, unless the 31st falls on a holiday or weekend.

Also, keep in mind that if you make contributions via paychecks, it may take a couple of cycles to kick in, so you want to make those contributions as soon as possible. Fortunately, you have until Tax Day to make contributions to both traditional and Roth IRAs.

2. Contribute to a health savings account

If you have a high-deductible health plan (your deductible must be at least $1,350 for an individual plan or at least $2,700 for a family plan), you could be eligible to participate in a health savings account, or HSA. Or you could contribute to a flexible spending account, or FSA, regardless of the type of employer-sponsored health plan you have. Both FSAs and HSAs can help you save on health costs while decreasing your taxable income.

High-deductible health plans, or HDHPs, have higher out-of-pocket costs than other types of health plans, but lower premiums. In other words, your monthly premiums are low, but you’ll pay more for using healthcare services until you hit your deductible. Once you reach your deductible amount, the insurance company will start paying for health services as well.

HSAs are connected with HDHPs to help you pay for those higher out-of-pocket costs. You’re able to contribute up to $3,450 into an individual HSA and $6,900 in a family HSA.

The IRS doesn’t consider money contributed toward HSAs taxable income, and it doesn’t tax you when you withdraw the money to pay medical bills. Because your HSA (and FSA) contributions are made with pre-tax dollars, they can lower your taxable income.

You can itemize your HSA and FSA deductions on lines 1 to 4 on Schedule A (itemized deductions).

FSAs work in the same way that HSAs do, except they can be associated with any health plan. One key difference from an HSA is that FSAs belong to the employer , so you could lose the money if you leave your job, and FSA money typically disappears after the calendar year ends. HSAs, on the other hand, belong to the employee, so you take the account with you when you leave a job and the money carries over to the next year.

If you haven’t maximized your health savings contributions, it’s a smart move to do that before the end of the year. However, you do typically have until Tax Day to make HSA contributions. Keep in mind that if you have an FSA, you will need to use all that money by Dec. 31.

3. Give to charities

Donating to qualified charities doesn’t just assist worthy causes, it can also help you because you can deduct donations on your taxes.

The one catch is that the charity must be considered a qualified charitable organization. You can search online at IRS Exempt Organizations Select Check for qualified organizations or call 1-877-829-5500. Keep in mind, the IRS says you can never deduct a contribution made to an individual.

In order to claim this deduction, you’ll need to itemize your charitable donations on Schedule A of your 1040 tax form. That information is inputted on lines 16 through 19.

You’ll want to have proof of your donation, which can be a bank record, a credit card receipt or a receipt from the charity. To count for the tax year, you must make your contributions by Dec. 31.

If you come to the end of the year and find that you still want to reduce your taxable income, you can open your wallet and help your favorite charities.

Bottom line

No one wants to pay more than their fair share in taxes, and wouldn’t a big refund be great next year? By taking steps to reduce your 2017 taxable income in the final weeks of the year, you can help maximize your chances of getting a bigger refund in 2018.

Christina Taylor is senior manager of tax operations for Credit Karma. She has more than a dozen years of experience in tax, accounting and business operations. Christina founded her own accounting consultancy and managed it for more than six years. She co-developed an online DIY tax-preparation product, serving as chief operating officer for seven years. She is the current treasurer of the National Association of Computerized Tax Processors and holds a bachelor’s in business administration/accounting from Baker College and an MBA from Meredith College. You can find her on LinkedIn.

This article was fact-checked by our editors and reviewed by Christina Taylor, MBA, senior manager of tax operations for Credit Karma. It has been updated for the 2019 tax year.

Choosing health insurance is one of the most important decisions you make every year.

Your choice of health insurance plan can affect not only your physical health, but financial well-being too. So how do you choose health insurance that you can afford and does everything you need it to do?

Let’s walk through some basics that can help you choose health insurance that’s right for you, including how to get insurance, types of plans, the tax implications of getting health insurance and what to consider when choosing a plan.

Two ways to get health insurance

Most Americans get their insurance through an employer. Under an employer-sponsored healthcare plan, you and your employer share in the cost of the premiums, which can make health insurance much more affordable than if you had to pay the entire premium yourself.

If you’re not eligible to get health insurance through an employer or a spouse’s employer, you may be able to purchase individual or family coverage through the Affordable Care Act exchanges. The ACA created some health exchanges to give coverage to people who weren’t able to get health insurance.

When to buy health insurance

If you start a new job with an employer that offers health insurance, you can begin coverage at that time. Otherwise, you can only enroll in or make changes to your health insurance plan during open enrollment, or if you have a qualifying special life event.

Open enrollment is the time of year when you’re able to switch health insurance plans. The open enrollment period is different depending on how you get health insurance.

Open enrollment for employer-based plans varies by company. You need to check with your company’s benefits or human resources department to find out the exact period for you.

During open enrollment, you can stick with your current health insurance plan or you can switch to another option if it’s available. Even if the options are the same from year to year, it’s still a good idea to review and compare health insurance plans.

Health insurance plans often change their cost structure. For instance, your health plan may increase premiums or deductibles for next year. So, it’s possible you could find a better option by comparing plans.

Plus, our lives change. People get married, have babies, adopt, experience health challenges, make lifestyle changes. A certain plan could have worked for you this year, but you may find that you need a different plan for next year.

Besides open enrollment, the only other time you can change your benefit elections is if you qualify for a special enrollment period. Special enrollment allows you to change health insurance outside the open enrollment period if you experience specific life events, including getting married, having or adopting a child, getting divorced, and losing your job. If a special enrollment-qualifying event happens, you can change insurance outside of open enrollment. Otherwise, you’d have to wait until the next open enrollment period.

Understanding types of employer-based health plans

Multiple types of employer-based health plans are available, but the three most common are preferred provider organization, high-deductible health plan, and health maintenance organization plans.

While all three types of health plans work to help you pay for necessary health care, it’s important to understand how they differ.

Preferred provider organization plans: flexibility, high premiums

According to the Kaiser Family Foundation’s 2016 Employer Health Benefits Survey, about half of people in employer-based health plans have a preferred provider organization, or PPO. These plans usually have the highest premiums, but in exchange for that higher premium, they also offer more flexibility.

PPOs have networks of healthcare providers who participate in their plans. They also allow members to get out-of-network care, usually at a higher price — but still less than what you’d pay out-of-pocket.

Another benefit of PPOs is that you can see a specialist without a referral. But, a PPO could still require a physician to get prior approval for expensive services, such as an MRI. PPOs usually have a lower deductible than a high-deductible health plan, also known as an HDHP. However, a PPO’s deductibles are typically higher than a health maintenance organization’s (HMO) deductible.

You might consider a PPO if:

• You want the option to get care outside of your plan’s network
• You don’t want to get referrals from your primary care physician
• You don’t mind paying extra in premiums to get more flexibility

High-deductible health plans: low premiums, high out-of-pocket costs

HDHPs have increasingly become a popular choice for employers and insurance companies looking to cut healthcare costs. According to the Kaiser Family Foundation survey, they make up about one-third of employer-based health plans.

By its name, you can probably figure out that HDHPs have high deductibles. Much like auto insurance, a high-deductible plan means you must pay a certain amount out of your own pocket first, before your insurance company will begin paying for claims.

For 2019 taxes, the IRS defines a high-deductible plan as one with a deductible of at least $1,350 for an individual plan and $2,700 for a family plan. An HDHP’s annual out-of-pocket maximum is up to $6,750 for individual plans and $13,500 for family plans.

You have more out-of-pocket costs in HDHPs than either PPOs and HMOs. However, HDHPs’ premiums are usually lower, so they’re a low-cost option for people who don’t use healthcare services often.

HDHPs can have health savings accounts (HSAs) linked to the plans. These accounts let you save money pre-tax to pay for qualified medical expenses. You own the HSA, which means you take it with you if you change jobs.

You might consider an HDHP if:

• You don’t use healthcare services often and don’t expect to need healthcare much over the next year
• You would rather pay low premiums with the understanding that you’ll have to pay more for getting healthcare services
• You don’t have a spouse or children who might need healthcare services

Health maintenance organization plans: lower premiums, referrals required, no out-of-network care

HMOs are not as common as they were in the 1990s, but they still account for 15 percent of employer-based health plans, according to the Kaiser Family Foundation survey.

HMOs typically have lower premiums than PPOs, but not as low as HDHPs. Plus, HMOs generally have smaller networks of doctors and hospitals. This means fewer doctors accept HMOs than PPOs. So, in essence, you’re paying lower premiums with the understanding that you don’t have the same flexibility as a PPO.

HMOs often have either no deductibles or much lower deductibles than PPOs and HDHPs.You need to name a primary care physician when you have an HMO. A primary care physician is the person who coordinates your care, which means you need to get referrals from him or her to see a specialist.

These types of plans don’t allow you to get out-of-network care. So, if you do get out-of-network care, you’ll have to pay for the services on your own.

You might consider an HMO if:

• You want to pay low premiums
• You don’t mind getting referrals from your primary care physician
• You’re not bothered by the limitation of staying in-network

Choosing a health plan through the ACA exchanges

If you can’t get health insurance through an employer or your spouse’s employer, you may qualify for a plan through the ACA health exchanges.

The easiest way to get health insurance through the exchanges is to go to healthcare.gov. You can review available plans there. If your state has its own exchange, healthcare.gov will forward you to that site. You can also call 1-800-318-2596.

You need to consider many factors when deciding on your health insurance, but something you won’t have to worry about is what your health plan in the exchanges covers. The ACA has mandated baseline coverage for all qualifying health plans. This means that all ACA plans must cover:

1. Emergency care
2. Outpatient care
3. Hospitalizations
4. Pregnancy and newborn care
5. Mental health and substance abuse services
6. Prescription drugs
7. Rehabilitation services
8. Lab tests
9. Preventive and wellness programs
10. Dental and vision care for children
11. Birth control coverage
12. Breastfeeding coverage

The costs for these services will vary depending on the plans, but you’re assured that all qualifying health plans will cover these services.

The exchanges offer four levels of health plans that are distinguished by the premiums and out-of-pocket costs:

• Bronze — Highest out-of-pocket costs; lowest premiums
• Silver — Lower out-of-pocket costs than Bronze; higher premiums than Bronze
• Gold — Lower out-of-pocket costs than Silver; higher premiums than Silver
• Platinum — Highest premiums; lowest out-of-pocket costs

There is a fifth plan in the ACA exchanges, but not many people are eligible. Some young people and others who meet a hardship or affordability exemption can join a catastrophic health plan. These plans have very low premiums and extremely high deductibles. If you’re eligible for such a plan, the exchanges will provide that as an option once you enter your information during the application process.

Depending on your income level, you may be eligible for premium subsidies if you get an ACA plan. These subsidies make your plan more affordable. We’ll discuss that further in the tax section.

Key factors to consider when choosing a health plan

When choosing a health plan, you need to:

• Make sure your providers are part of the network
• Figure out the right health plan for your situation
• Compare health care costs

Many consumers really dread shopping for health insurance, says Betsy Imholz, special projects director at Consumers Union.

“If there are too many options and variables, it gets extremely hard for people to choose and can result in paralysis in decision-making from cognitive overload,” says Imholz.

The first step is to narrow your choices, she advises. When deciding on the right health plan for you, ask these questions to figure out which is best for you:

• How often do you go to the doctor?
• Do you take costly prescription drugs?
• How much care do you expect to need in the next year?
• Do you have enough money set aside to pay out-of-pocket costs?
• Would you rather pay lower premiums with higher out-of-pocket costs or vice versa?
• How important is flexibility and being able to see a wider network of providers?
• Are your providers in the plan’s network?
• Do you have children or plan on having children who might need regular health care?

Make sure all your providers are part of the health plan’s network. “If there are ‘must have’ doctors or hospitals for you, make sure they are in-network,” Imholz says. Also, it’s a good idea to check to see whether other providers in your area take that health plan, in case you need other healthcare services. You don’t want to get stuck in a situation of driving many miles to get healthcare services.

You can find out this information by going to the insurer’s website and searching for providers in that specific plan’s network. Imholz also suggests calling the insurer and provider to confirm. She says online provider directories are often inaccurate, so it’s important to check with a live person. Please note, there’s no guarantee your physician will accept all plans from the same insurer, so make sure your provider accepts a specific plan by calling.

How to compare costs of different plans

Next, you’ll want to compare costs for each plan. Look at:

• Premiums
• Deductibles
• Out-of-pocket costs (such as coinsurance)
• Copays
• Provider networks

Focusing just on premiums as the deciding cost factor is the most common mistake people make, Imholz says. Instead she advises that people look beyond premiums and also consider shared costs like deductibles, copays and coinsurance.

Imholz also recommends you check on drug formularies, which is the list of medications an insurer will cover and what it will pay for each. In other words, see how much your prescriptions will cost in the different plans. Drug costs often differ depending on which tier the insurer assigns to the medication. For example, generic drugs are typically considered to be on the lowest tier and are therefore the cheapest. New, brand-name drugs are generally on the highest tier. Every insurer creates its own tiers with specific rules and price points.

In addition to costs, Imholz suggests you review each health plan’s quality ratings online. She says many people don’t research ratings before signing up for insurance, but plans differ widely by customer service and clinical measures, such as a plan’s success in getting people preventive care.

Imholz says that some plans, employers and exchanges provide online tools to compare plans. Additionally, as a consumer, you’re entitled by law to a “Summary of Benefits and Coverage,” which is a standardized format that explains what each plan offers. You can request that from your company’s HR department or the exchanges.

How does health insurance affect taxes?

There’s no longer a tax penalty for going without health insurance. The Tax Cuts and Jobs Act of 2017 set the penalty amount to zero.

The ACA also set up a premium tax credit to help people in ACA exchange plans with their premiums and out-of-pocket costs. The IRS lets you use your premium tax credit in advance if you want.

The tax credit is available to people with estimated income between 100 percent and 400 percent of the federal poverty level for your household size.

Outside of the ACA plans, you can also enjoy some tax benefits if you have a high-deductible health plan paired with an HSA through your employer. Money your employer puts into your HSA is tax-exempt, and you can deduct contributions you make to the HSA from your federal income tax. The interest or other earnings from your HSA won’t be taxed. You also may not have to pay taxes on withdrawals made for qualifying medical expenses.

Bottom line

Whether you buy insurance through your employer or the ACA exchanges, you should compare plans to make sure you find the one that fits your situation. Don’t just go with the cheapest premiums. Compare premiums, out-of-pocket costs, benefit designs and provider networks to choose the plan that protects you and your family without breaking the bank.

Christina Taylor is senior manager of tax operations for Credit Karma. She has more than a dozen years of experience in tax, accounting and business operations. Christina founded her own accounting consultancy and managed it for more than six years. She co-developed an online DIY tax-preparation product, serving as chief operating officer for seven years. She is the current treasurer of the National Association of Computerized Tax Processors and holds a bachelor’s in business administration/accounting from Baker College and an MBA from Meredith College. You can find her on LinkedIn.

At a glance: The best travel rewards credit cards for each type of traveler

We’ve dug into the fine print to find the best travel rewards credit cards for four types of travelers. See which one may be the best fit for your travel needs.

Great for frequent travelers: Platinum Card® from American Express

Who’s it for?

Regular travelers who want a card that maximizes travel points and gives them perks like access to airport lounges.

Frequent flyers will love this charge card, as they get five points for each $1 spent on flights booked directly with airlines or with American Express Travel on up to $500,000 spent per calendar year (then one point per $1), a $200 airline fee credit per calendar year for baggage and other incidental fees at one qualifying airline of their choice, and access to more than 1,400 airport lounges around the world.

Why we like it

You can pick up points quickly with the Platinum Card® from American Express. If you spend $8,000 on purchases in the first 6 months from account opening, you get 80,000 Membership Rewards® points.

Frequent travelers can rack up points quickly with the five points earned for every $1 spent on flights booked directly with airlines or with American Express Travel.

You’ll also pick up five Membership Rewards points per $1 spent on prepaid hotels when you book through amextravel.com.

This card offers many travel-related perks, including a $200 statement credit each year for prepaid hotels booked with American Express travel and a fee credit for Global Entry or TSA PreCheck, which means less time waiting in line at the airport.

Basic Card Members get up to $200 worth of Uber rides annually. Cardholders are also eligible for membership in premium car rental programs like Hertz Gold Plus Rewards, Avis Preferred Club and National Emerald Club Executive, which could get you special upgrades and discounts.

With no foreign transaction fees on top of all these perks, this card adds up to a great option for a frequent traveler.

Learn how to maximize the benefits of the Platinum Card® from American Express.

Watch out for

The card has a $695 annual fee, and it’s not waived the first year.

Plus, American Express isn’t as widely accepted outside the U.S. as other card networks, so you may have issues using it internationally.

Great for infrequent travelers: Bank of America® Travel Rewards credit card

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Bank of America® Travel Rewards credit card

Bank of America® Travel Rewards credit card

3.1 out of 5

127 reviews

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Who’s it for?

Infrequent travelers who are interested in travel rewards and want to pay a $0 annual fee while not worrying about restrictions.

Why we like it

If you’re looking for a card that gains points for regular everyday purchases and has a $0 annual fee, the Bank of America® Travel Rewards credit card could be a good fit for you. With the Bank of America® Travel Rewards credit card, cardholders get 1.5 points for every $1 spent, and there’s no limit to the amount of points you can earn.

You don’t have to worry about category restrictions, either. As soon as you’ve earned at least 2,500 points, you can redeem your points for a statement credit to pay for travel or dining purchases.

You can apply the travel credit to your account as a statement credit to offset eligible travel purchases you’ve already made. This means that you won’t have to deal with any airline blackout dates or hotel restrictions for rewards.

New cardholders get 25,000 online bonus points for spending at least $1,000 on purchases within the first 90 days of account opening.

This can be worth up to $250 in statement credits toward travel-related purchases.

Watch out for

You can find cash back cards that give you more rewards on nontravel purchases, which could be a better fit for you if you don’t care too much about the perks of a travel rewards card.

Great for international travelers: Chase Sapphire Reserve®

Who’s it for?

International travelers who want benefits they can use beyond U.S. borders. Chase Sapphire Reserve® does that by giving three points per $1 spent on dining worldwide plus global benefits.

Why we like it

Cardholders get 60,000 bonus points when they spend $4,000 on purchases within the first 3 months from account opening.

Another added bonus — you get 50% more value when you redeem your points for travel through Chase Travel℠. That means 60,000 bonus points can be worth up to $900 toward travel.

The card offers a statement credit of up to $120 every four years to reimburse for a Global Entry or TSA PreCheck application fee. You’ll also get complimentary access to select airport lounges after you enroll in Priority Pass Select.

With this card, there’s no foreign transaction fee. Plus, Visa is generally widely accepted abroad. If that’s not enough, there’s a $300 annual travel credit that you can use to reimburse travel purchases made with your card.

Those perks make for a top-line card for international travelers.

Watch out for

There’s a $550 annual fee on this card.

Great for domestic travelers: Southwest Rapid Rewards® Premier Credit Card

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Southwest Rapid Rewards® Premier Credit Card

Southwest Rapid Rewards® Premier Credit Card

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Who’s it for?

Domestic travelers who want a travel rewards card for an airline that flies all over the U.S. (and some international locations too). These travelers appreciate getting a bonus for loyalty.

Why we like it

The Southwest Rapid Rewards® Premier Credit Card offers cardholders the ability to earn a $400 statement credit and 40,000 bonus points after you spend $3,000 on purchases in the first 4 months your account is open.

Southwest Rapid Rewards® Premier Credit Card doesn’t have blackout dates or seat restrictions when you redeem your points for flights. Plus, your first and second checked bags are free, and there are no change fees — so if you need to change your flight, you’ll only have to make up any difference in fare.

Watch out for

There’s a $99 annual fee that is charged on your first bill.

There’s no priority boarding, lounges or similar perks on this card, but it also has a lower annual fee than the cards that offer those kinds of add-ons.

Before choosing a travel rewards card, make sure it makes sense for your lifestyle and matches your spending pattern.

Let’s say you always fly the same airline. In that case, getting a rewards credit card specific to that airline makes sense. But if you like more flexibility, then a better choice might be a travel rewards card that doesn’t limit you to one airline or hotel.

Beverly Harzog, a credit card expert, says there are so many travel rewards categories and subcategories that anyone can find the right card to maximize rewards.

“You need to spend time on this,” says Harzog. “You need to get a card that matches your lifestyle and how you spend your money.”

Bottom line

There are many different travel rewards cards, so with a little research you can choose what’s right for you.

When shopping for a travel rewards card, check if there’s a foreign transactions fee or rewards cap.

Harzog says a card may give you 5% rewards on each $1, but it may cap rewards after you reach a certain limit. So you could get quick points, but your rewards potential could max out within a few months.

There is a card out there for you whether you’re flying for fun or business. Some have hefty annual fees with incredible perks, some offer you more flexibility to gain more points from multiple sources, and others have no annual fees but limited perks.

Chase Freedom Unlimited® and the Capital One Quicksilver Cash Rewards Credit Card both offer cash back.

Chase Freedom Unlimited® and the Capital One Quicksilver Cash Rewards Credit Card stand out from the cash back pack.

But pit these two cards against each other, and the competition becomes tight.

After digging into the fine print and weighing other factors besides the cash back rate, we found that Chase Freedom Unlimited® squeezes past its rival as the better option.

Heads up: What to consider when applying for a cash back card

Everyone’s lifestyle and financial situation is unique, so you’ll have to figure out whether a cash back card is best for you. Do you travel regularly? If so, a travel rewards card might be a better option.

If you’re sure that a cash back card makes the most sense for you, the next step is to figure out whether you want one like the two presented here.

Bottom line

If you’re looking for a cash back card and know you’ll pay off your balance monthly, it’s hard to go wrong with either the Chase Freedom Unlimited® or Capital One Quicksilver Cash Rewards Credit Card.

If neither card seems right for you, don’t stress. While both are excellent cash back cards, they’re far from the only options out there.

Here are two more cash back cards that may fit better with your lifestyle and spending habits.