Best reward credit cards for 2011

If your credit rating has survived the recession, and you qualify for a credit card, this is one of the best times in years to sign up for a new card.

That's because card companies are tossing out all sorts of bonuses, from free cash to free airline tickets, just for signing up, and making your first purchase.

We love our rewards

Free flights....free cash. Reward cards are red hot these days.

Among lunch time shoppers we spoke with at a shopping center in Mason Ohio , Alex Gomez to me he loves his American Express Delta Skymiles card, which he says has given him and wife several free vacations.

Alex said "we went to Hawaii and flew for free the both of us. And we stayed for free cause we have a timeshare."

Kelly Caspar and her husband, however, prefer cash back cards. She explained"he was able to put $250 into our savings account from that, from the bank card recently."

And Veronica Williams' top choice is a store reward card, saying "especially if you go pretty often, it's nice of them to recognize that and give you free things back."

So which type of rewards are best?  Miles, cash, or store rewards?

Airline cards still tops

Consumer Reports magazine says it all depends which you prefer, but says airline points remain the best value, in terms of what you get for what you spend.

Consumer Reports says the worst values are the merchandise offered by reward card catalogs, such as TV's and laptops, which are often grossly overpriced. So which cards offer the best rewards?

Great signup bonuses

The websites Cardhub.com and Bill Haredekopf's LowCards.com say many cards are offering signup bonuses right now.

Among their top picks:

• Chase's United Airlines card: 25,000 miles with your first purchase.
• Southwest Airlines's Visa card: 50,000 bonus points when you start spending.

For straight bank cards:

• Chase's Sapphire Card: $625 worth of airfare once you spend $3,000.
• Capitol One Venture: $250 in airfare after you spend $1,000.
• Chase Freedom: $200 cash back after you spend the first $500.

Best after a year or two

What about overall rewards, after the honeymoon wears off? Consumer Reports Magazine's top picks are:

American Express Blue, also the American Express Delta Skymiles Card (but they have a higher than average annual fee, and so are best for big spenders).

• Amazon.com's Visa.
• Capital One Venture (due to its double points for each dollar spent. However, 25,000 points do not guarantee an airline ticket).
• Chase Freedom.

Note that Capitol One and Chase Freedom appear on several different lists of best reward cards.

One catch

The big catch with all of these: Your credit score needs to be high enough to qualify: Many people these days are no longer eligible for these cards. You may have to get a Debit Rewards card instead, though their rewards tend to be much more limited.

As always, don't waste your money.

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