I’ve heard that the Best Buy Reward Zone Program MasterCard has one of the best loyalty programs in the business. But maybe not for long, according to a post from Consumerist about the store’s shrinking rewards program.

I’ve contacted Best Buy for a comparison of the new and old terms and did not receive a response.

Best Buy certainly isn’t the first and I bet it won’t be the last credit card company to pare back rewards this year.

So which cards are still the best rewards cards out there?

Not my Chase Freedom card. It changed its reward terms - for the worse, in my opinion - on June 30. (NOTE: Some readers say that their rewards program with this card has not changed. I’ve contacted Chase for details about the change and I learned that all cards will eventually change to the new program).

I used to earn 3 percent cash back in the three out of 15 every day categories where I’d spend the most money each month. I also earned 1 percent cash back on all other purchases. Also, for every $200 in rewards I earn, I would get a $50 bonus.

Now, the $50 bonus is  gone and my purchases earn just 1 percent cash back. So Chase Freedom is now a pretty typical run-of-the-mill cash back credit card.

Chase says the card will feature certain spending categories where I’ll earn 3 percent for limited periods, but I haven’t noticed this yet. Even when they do launch that feature, it’s just a less generous version of the Discover Get More program, which gives 5 percent cash back on selected categories (although Discover is less generous with every day spending. You have to spend $3,000 with Discover before the 1 percent reward kicks in; before that you earn a measly .25 percent on purchases).

Chase Freedom isn’t my everyday card, so I’m not too broken up by the changes. But at a time when credit cards are changing terms not only on rewards, but also on how a card accrues interest, it it critical to read any disclosures that come your way.

My most used cards?

I like Discover’s 5 percent cash back program and use my card whenever I can take advantage of that deal. Otherwise, the American Express Costco True Earnings card and Citi Drivers Edge Mastercard are my primary cards. The Drivers Edge card, with 3 percent back on groceries, gas and drugstores and 1 percent on everything else, is no longer offered.

But if I were in the market for a new card, I’d probably take a look at both the Fidelity Rewards American Express Card and the Schwab Invest First Visa. Both reward spending with a 2 percent cash rebate into a Fidelity or Schwab account.

According to the calculator on Fidelity’s web site, $12,000 in purchases per year on your Rewards Card amounts to a $240 cash reward. Invested each year at 4 percent for 10 years and your rewards could grow to $2,916.

That’s not too shabby, even if you project you’ll earn less than 4 percent in interest.

Did I miss a great rewards credit card? If so, do share below.

This entry was posted on Monday, July 6th, 2009 at 11:03 am and is filed under credit. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.