Apr 5, 2021
Our points-obsessed staff uses a plethora of credit cards on a daily basis. If anyone on our team wouldn't recommend an offer to a friend or family member, we wouldn't recommend it on the The Points Guy either. Our opinions are our own, and have not been reviewed, approved, or endorsed by our advertising partners.
Valuations are based on what TPG would pay to buy points and the overall redemption value, factoring in variables like award availability, fees and change or cancellation policies.Learn more
The team at TPG has done a lot of the research for you, compiling our top picks of the best credit cards available on the market today. We've looked through the best welcome offers, earning rates, redemption options, benefits and more to help you determine which card will help you reach your goals — whether you're looking to save up for your dream vacation, save money on everyday expenses with cash back, or help rebuild your credit.
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
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|Card||Best for||Welcome offer/ sign-up bonus||Earning Rate||Annual fee|
|The Platinum Card® from American Express
|Welcome bonus||75,000 Membership Rewards Points after you spend $5,000 in the first six months of account opening||
||$550 (see rates and fees)|
|Capital One Venture Rewards Credit Card
|Non-bonus spending||Earn 100,000 bonus miles when you spend $20,000 on purchases in the first 12 months from account opening, or still earn 50,000 miles if you spend $3,000 on purchases in the first 3 months.||
|American Express® Gold Card||Dining and takeout||60,000 Membership Rewards points after you spend $4,000 in the first six months of account opening||
||$250 (see rates & fees)|
|Blue Cash Preferred® Card from American Express
|Supermarkets||Earn a $300 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months.||
||$95, waived the first year (see rates & fees)|
|The Business Platinum Card® from American Express||Travel perks||TPG Exclusive Offer: Earn 125,000 bonus points after you spend $15,000 on eligible purchases within the first three months of account opening.||
(see rates & fees)
|Chase Sapphire Preferred Card||Total value||80,000 Ultimate Rewards points after you spend $4,000 in the first three months of account opening. Plus, earn a one-time up to $50 statement credit on grocery store purchases available for use within the first year of account opening||
|American Express® Business Gold Card||Business spending||Earn 70,000 bonus points after you spend $10,000 on eligible purchases in the first three months of account opening.||
||$295 (see rates & fees)|
|Capital One SavorOne Cash Rewards Credit Card
||Entertainment||$200 cash bonus after you spend $500 in the first three months of account opening||
|Blue Cash Everyday® Card from American Express||Department stores||Earn $200 cash back after you spend $1,000 in purchases in the first three months of account opening.||
||$0 (see rates and fees)|
|Citi® Double Cash Card||Cash back||N/A||
|Chase Sapphire Reserve||Travel insurance||60,000 Ultimate Rewards points after you spend $4,000 in the first three months||
|The Hilton Honors American Express Business Card||Hilton Business Travelers||130,000 Hilton Honors Bonus Points after you spend $3,000 in eligible purchases on the Card in the first 3 months of Card Membership.||
||$95 (see rates and fees)|
This page includes information about Discover products that are not currently available on The Points Guy and may be out of date.
Why it’s the best credit card for welcome bonus: Right now, you’ll earn 75,000 points after you spend $5,000 in the first six months. But as part of this welcome bonus, you’ll also earn 10x on combined eligible U.S. gas and U.S. supermarket purchases in the first six months (up to $15,000 in combined spending) — which makes your potential earning from this bonus pretty lucrative! Not to mention that some cardholders are targeted for an even higher offer through CardMatch (offers subject to change at any time).
Pros: The Amex Platinum is one of the best cards on the market, with unparalleled lounge access, an assortment of travel and shopping credits, elite status with two hotel chains, and much more. If you travel frequently and value a luxury experience on the road, the Amex Platinum is certainly worth the high annual fee.
Cons: If you don’t travel enough to take advantage of the card’s full suite of benefits, you may be better off with a less-expensive card. Plus, outside of the temporary spending bonuses for new cardholders, you’ll only earn your bonus on certain travel purchases, which makes the card less-than-ideal for everyday spending.
Why it’s the best credit card for dining and takeout: If you eat out or order in on a regular basis, you’ll be hard-pressed to find a more powerful credit card than the American Express Gold. With 4x at restaurants worldwide and up to $120 in dining credits* each and every calendar year, the Amex Gold is designed specifically to maximize dining purchases and should be in every foodie’s purse or wallet. Plus, cardholders will receive up to $120 in annual U.S. Uber Cash (which can be used for Uber Eats). The Gold Card must be added in the Uber app to receive the Uber Cash benefit.
*Enrollment required for select benefits.
Pros: The American Express Gold has you covered across the board when it comes to food, whether you’re eating in or dining out. Not only does the card earn 4x at restaurants worldwide, but you’ll get that same 4x at supermarkets in the U.S., up to $25,000 in purchases per calendar year (then 1x). On top of that, you’ll also earn 3x on all flights purchased directly with airlines or via Amex Travel.
Cons: The only travel bonus category is flights booked directly or through Amex, which makes this a mediocre card to handle travel purchases.
Why it’s the best credit card for non-bonus spending: You’re earning at least 2x miles on every purchase, which is great for a low-annual-fee credit card like the Venture. While there are certainly cards out there with higher bonus multipliers for specific purchases, the Venture is a great option to use for everyday spending that may not fit into another bonus category.
Pros: There aren’t many cards that get great value for both direct redemptions and transfers to partners, but the Capital One Venture Rewards credit card pulls it off. You can use Capital One miles to offset a number of travel (and temporarily some non-travel) purchases at a fixed value, or transfer them to any of Capital One’s 13 airline and two hotel partners, making the miles you’ll earn with this card infinitely flexible. And because you’re earning at least 2x on every purchase, you know you’re getting value no matter the spending category.
Cons: Compared to some of the other transferable currencies, Capital One’s transfer rates aren’t the best. Most transfer at a 2:1.5 rate while some transfer at a 2:1 rate. Also consider that the Venture doesn’t have quite the same level of partners as, say, Amex Membership Rewards.
Why it’s the best credit card for total value : We’ve long suggested the Chase Sapphire Preferred as a great option for those who are new to earning travel points, because it lets you earn valuable, transferable Chase Ultimate Rewards points with strong bonus categories and a reasonable $95 annual fee.
Pros: This card is a great beginner travel credit card, but it can still be valuable as part of a more seasoned award traveler’s wallet. It comes with an easy-to-manage annual fee, a great sign-up bonus worth $1,600 based on TPG valuations, a solid earning structure and some top-notch travel protections for a mid-tier credit card. Plus, Chase has been at the forefront of providing cardholders with additional perks during the COVID-19 pandemic.
Cons: Because this is a mid-tier credit card, you aren’t getting benefits such as lounge access or travel credits. And while the standard bonus categories are broad enough to encompass a large number of purchases, the 2x multiplier is far from the industry high.
Why it’s the best credit card for travel perks: The Business Platinum card is a perfect fit for business owners looking for luxury perks both when they’re on the road and at home conducting business. The card has numerous travel perks including airport lounge access, airline credits and travel protections, but also features business-friendly benefits such as credits when buying from Dell and extra points on large business purchases.
Pros: Your business can start out with buckets of points if you get the Business Platinum card now, since the card is offering a welcome offer of 125,000 points after meeting minimum spend requirements. Those bonus points are worth $2,500 in value based on TPG’s valuations, meaning your business will quickly find itself with more than enough points to start redeeming for travel. And with the card’s 35% Pay With Points rebate (up to 500,000 points back per calendar year), you don’t even have to search for award availability when redeeming points for first or business class to get great value for your earnings.
Cons: While the card does come with an extensive list of perks, most of those perks only pertain to travelers looking to upgrade their experience. Additionally, keep in mind that this card has limited bonus categories, which means it’s not a great option for everyday business spending.
Why it’s the best credit card for business spending: The Amex Business Gold has a great earnings structure. You’ll get 4x on the top two categories your business spends the most in each month — the earnings are given automatically based on your spending habits each month.
Pros: The card is the perfect bridge between mid-tier business credit cards that offer limited perks but better spending categories and the higher-tier business credit cards that offer a laundry list of benefits but with limited spending categories. You’ll get a 25% points rebate on award travel booked with Amex Travel (up to 250k points back each calendar year), access to The Hotel Collection and an array of travel protections.
Cons: For high-budget businesses, the $150,000 annual spending cap on 4x rewards could hinder your earning potential. On the other hand, lower-budget businesses may have a hard time justifying the $295 annual fee (see rates and fees).
Why it’s the best credit card for small businesses: The Ink Business Preferred is a great mid-tier small business credit card that offers a lot of value to business owners. The card has a great bonus right now, and you’re getting 3x across multiple business categories. All in all, it’s a great card any business owner should consider having in his or her wallet.
Annual fee: $95
Current sign-up bonus: 100,000 Ultimate Rewards Points when you spend $15,000 in the first three months from account opening.
Pros: You’ll earn 3x in the first combined $150,000 spent on travel, shipping, internet, cable and phone services and advertising on search engines and social media sites each account anniversary year. The points earned can be used for 1.25 cents each on the Chase Ultimate Rewards Travel Portal, or you can potentially get even more value by transferring to one of Chase’s partners. The card also comes with some great travel protections and cell phone protection.
Cons: The bonus does require a high spending threshold, which may not be possible for all small businesses—especially those that have smaller budgets in this current economic climate. The card also doesn’t come with perks such as lounge access, annual credits or other top-tier benefits. If those are important to you and your business, you’ll want to look elsewhere.
Why it’s the best credit card for supermarkets: The Blue Cash Preferred offers an impressive 6% cash back on the first $6,000 spent at U.S. supermarkets (in addition to a number of other great bonus categories). If you’re spending more on grocery runs in 2021, then you know how those bills can add up. The Blue Cash Preferred offers an easy way to maximize those purchases with a low annual fee.
Pros: The Blue Cash Preferred is one of the best cash-back credit cards out there, and for good reason. You’re getting 6% cash back on select U.S. streaming services and the first $6,000 spent annually at U.S. supermarkets (then 1%), 3% on transit and U.S. gas stations and 1% on everything else. Plus, it also comes with a solid intro APR offer on new purchases and a low $95 annual fee, waived the first year (see rates and fees).
Cons: Unlike Chase’s cash-back cards, you cannot pair the Blue Cash Preferred with Membership Rewards cards and turn your earnings into points. If you’re looking to save money on everyday expenses, cash back is a great option. But travelers may prefer points since you can get a higher value depending on your redemption.
Why it’s the best credit card for entertainment: With the Capital One SavorOne, you’ll earn 3% back on all entertainment purchases (plus a number of other bonus categories). Entertainment is an increasingly rare bonus category, and 3% back is a solid return for a no-annual-fee credit card.
Pros: For no annual fee, you’re earning 3% back on all dining and entertainment purchases, 2% back on grocery store spending, and 1% on everything else. Plus, Capital One is currently offering 3% back on streaming services through April 2021.
Cons: If you’re spending a significant amount on dining and entertainment, you may be better off with the Capital One Savor Cash Rewards Credit Card, which offers an even more impressive return on the same bonus categories, but with a $95 annual fee.
The information for the Capital One Savor card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Why it’s the best credit card for cash back: The Citi Double Cash earns one of the highest flat-rates for any no-annual-fee cash back card. If you want a straight-forward way to earn cash back, this is a great option.
Pros: You’ll earn 2% back on every purchase (1% when you buy; 1% when you pay your bill), no matter the spending category. Beginners can use it as your primary spending card so that you don’t have to juggle bonus categories or spending caps, but more advanced cardholders can also pair it with other cards to round out a more robust card strategy. Citi also recently added the ability to convert Double Cash rewards into ThankYou points when you also have an eligible Citi ThankYou credit card.
Cons: The Citi Double Cash doesn’t come with a sign-up bonus. The card’s reward structure is enough of a draw for many people, but it’s currently the only card on our best credit cards list to not offer a new cardholder bonus to incentivize sign-ups.
Why it’s the best credit card for travel insurance: The Chase Sapphire Reserve is unmatched in the travel credit card space in the protections it offers cardholders, including trip cancellation/interruption insurance, primary auto rental collision damage waiver, baggage delay insurance, trip delay reimbursement, roadside assistance, lost luggage reimbursement, travel accident insurance, travel and emergency assistance, emergency medical and dental benefit and more.
Pros: Whether you’re traveling locally or internationally, you should be able to find a place in your purse or wallet for the Chase Sapphire Reserve. The card comes with a solid earning structure of 3x on travel and dining, a $300 travel credit every year, access to more than 1,200 Priority Pass airport lounges and restaurants and more. Plus, the Chase Sapphire Reserve is one of the best cards to have during COVID-19 because Chase has continuously added new benefits to help cardholders who have put travel on hold.
Cons: While the card does come with unmatched protections, keep in mind that a pandemic (including COVID-19) isn’t covered by the card’s trip cancellation/interruption insurance, trip delay insurance and other protections. Something else to consider is that this card doesn’t have a ton of luxury travel benefits for such a high annual fee.
Why it’s the best balance transfer card: While the Citi® Diamond Preferred® Card may not earn points of cash back, it has one of the longest available introductory balance transfer offers available. It has a 0% Intro APR for 18 months on purchases from date of account opening and 0% Intro APR for 18 months on balance transfers from date of first transfer. After that the variable APR will be 14.74% – 24.74%, based on your creditworthiness. Balance transfers must be completed within 4 months of account opening.
Pros: This card has no annual fee in addition to an APR rate that is tough to beat. While we never recommend carrying a balance on a card when you don’t have to, this card is a solid option if you’re looking for low interest and want a no-annual-fee card long-term.
Cons: The Citi® Diamond Preferred® Card does not provide any of the perks or points that other cards on this list may provide.
Why it’s the best credit card for 0% APR: The Chase Freedom Unlimited is one of the best cash-back cards around because of its low cost and flexibility, but the card also comes with a solid 0% intro APR offer. You’ll have 15 months of 0% APR on new purchases (regular variable APR of 14.99%-23.74% applies after the intro period ends) to help you finance large purchases or pay down debt.
Annual fee: $0
Current sign-up bonus: $200 after you spend $500 in the first three months of account opening.
Pros: You’ll earn 1.5% cash back on purchases, without having to worry about restrictive bonus categories. You can also earn 5% back on travel booked through Chase, 3x on dining and 3% on drugstores. If you also have an Ultimate Rewards card such as the Chase Sapphire Preferred or Ink Business Unlimited Credit Card, those basic points can be transformed into Ultimate Rewards points. You’ll then be able to redeem them at a higher rate through the Chase travel portal or transfer them to hotel and airline partners.
Whether you’re looking for a one-and-done credit card to handle all of your spending or a no-annual-fee card to pair with your existing lineup, the Chase Freedom Unlimited is the card for you.
Cons: While 1.5% cash back on purchases is pretty standard for a no-annual-fee, flat-rate card, it also isn’t the highest earning rate available. Furthermore, if you do not have a Chase Ultimate Rewards card, your redemption options are more limited.
Why it’s the best credit card for no annual fee: The Wells Fargo Propel packs a punch for no annual fee, with a number of 3x rewards categories and cell phone protection.
Annual fee: $0
Current sign-up bonus: 20,000 points after you spend $1,000 in the first three months of account opening
Pros: The Wells Fargo Propel earns 3x on travel (flights, hotels, taxis, ride-hailing and car rentals among others), dining (which Wells Fargo defines as “eating out and ordering in”), gas stations and popular streaming services. While you may not be traveling a lot right now, those other two categories are both very valuable while we’re all staying home — and once travel is once again safe, 3x on those expenses is a great earning rate. Plus, like with Chase cards, you can pool rewards across Go Far Rewards cards. If you have the Wells Fargo Visa Signature card (another no-annual-fee credit card), you could even get up to 1.75 cents per point of value when you redeem through the Wells Fargo travel portal. The card also comes with cellphone protection.
Cons: You’re getting a fixed value of 1 cent per point no matter what, which for points and miles experts can put this card at a disadvantage against cards from Chase, Amex, Citi and Capital One that allow you to transfer to partners and get potentially much more than 1 cent per point/mile.
The information for the Wells Fargo Propel and Wells Fargo Visa Signature cards has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Why it’s the best credit card for customized earning: The Bank of America Cash Rewards card allows you to choose the category in which you earn 3% cash back each month, which means you have more control of your rewards structure. If your spending needs change throughout the year, this card can accommodate that.
Annual fee: $0
Current sign-up bonus: $200 back after you spend $1,000 within the first 90 days of account opening
Pros: You’ll be able to choose which category you earn 3% back in each month from the following list: gas, online shopping, dining, travel, drug stores or home improvement/furnishings. The card also earns 2% on groceries and wholesale clubs. That’s a solid earning structure on its own, but those who qualify for the Preferred Rewards program with Bank of America can earn up to 5.25% back on the category of your choice and up to 3.5% on groceries and wholesale clubs.
Cons: The card does come with a $2,500 spending cap in combined bonus spending each quarter. Additionally, you’ll have to have a pretty penny saved with Bank of America in order to take advantage of the Preferred Rewards program (at least $20,000 in combined, eligible Bank of America accounts).
Why it’s the best credit card for department stores: The Blue Cash Everyday is one of the only cards that offers points for U.S. department store purchases year-round, and you’re getting a decent 2% return.
Pros: You’ll earn 3% back on U.S. supermarkets (up to $6,000 per calendar year; then 1%), 2% back on U.S. gas stations and select U.S. department stores and 1% back on everything else. Plus, the card currently offers $200 cash back after you spend $1,000 in purchases in the first three months of account opening. Cash back as statement credits.
Cons: All in all, the earning structure isn’t as impressive as other cash back credit cards on this list, including the card’s sibling, the Amex Blue Cash Preferred.
Why it’s the best credit card for low interest: The Capital One® Quicksilver® Cash Rewards Credit Card has a 0% intro APR on purchases for 15 months; 15.49%-25.49% variable APR after that along with no annual fee, no foreign transaction fees, and a solid flat-rate cash back earning rate.
Pros: This card is great for those who want a solid cash back credit card with a flat-rate earning structure and no bonus or rotating categories. The current one-time $200 cash bonus after you spend $500 on purchases within 3 months of account opening is also an easy sign-up bonus to hit.
Cons: The Quicksilver rewards aren’t quite as flexible as its competitors, so if you plan to expand your portfolio at some point then you may want to consider a different card.
This page includes information about the Discover it Student Cash Back and Discover it Cash Back that is not currently available on The Points Guy and may be out of date.
Why it’s the best credit card for students: The Discover it Student Cash Back comes with pretty much identical benefits as the standard version, but it’s easier to be approved for if you are a college student with little to no credit.
Annual fee: $0
Current sign-up bonus: Discover will match the cash back you earn in your first year
Pros: The Discover it Student Cash Back earns 5% on the first $1,500 spent each quarter on rotating categories each quarter you enroll. During Q1 2021, you’ll earn 5% back at Grocery Stores , Walgreens, and CVS (on the first $1,500 each quarter you activate; then 1%. Includes Walmart Grocery Pickup and Delivery purchases; excludes other Walmart and all Target purchases). Students can potentially earn up to $300 in bonus rewards each year, and Discover will even match the cash back you earn at the end of your first year with the card. That means you could get up to $600 in rewards your first year on bonus spending alone. Additionally, students get a $20 statement credit each year your GPA is a 3.0 is higher (up to the next five years). And if you want to keep the Discover it Cash Back after college, you can always convert it over to the standard card when the time comes.
Cons: Like any rotating category card, you’re only earning 5% in select categories each quarter (on the first $1,500 in purchases each quarter you activate). This means if you want to be able to capitalize on restaurants and PayPal year-round, you’ll want another card that earns bonus points on those purchases all the time. Additionally, keep in mind that you have to enroll in bonus categories every quarter, which can be an extra headache for students already juggling a full plate of class assignments and exams.
The information for the Discover it Student Cash Back and Discover it Cash Back has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Finding the right credit card can be a stressful and overwhelming process, especially for beginners. The TPG team has spent hours researching the best offers and compiling our top options — some from our partners and some not — to help you compare.
We looked at sign-up bonus offers, reward structures and bonus categories, annual fees, redemption options and more to pick the top credit card offers available to you.
Credit cards offer a convenient way to pay for purchases while building credit and earning points. There are hundreds of credit cards available, each with its own advantages and disadvantages. For instance, you might find a card with a strong balance transfer offer but no rewards, or the best travel card that has an annual fee. The key is to understand your individual needs and what cards you can qualify for based on your credit profile — then pick the best credit card that meets those requirements.
There are a number of factors to consider when choosing the right credit card for you. The top ones to keep in mind are:
Credit cards are available to people with a wide range of credit profiles, from those with excellent credit scores to folks that are rebuilding their credit or starting from scratch. There are credit cards you may be eligible for even if you don’t have a top-notch credit profile, but you should know before applying which cards you’re most likely able to get. That way you won’t waste time and a hard inquiry trying to get a card you won’t get approved for.
You might not be able to get a premium credit card without a strong credit profile, but by getting other cards and using them responsibly, you can build up your credit score over time and improve the likelihood that you’ll eventually be eligible for the very top cards.
The biggest advantage of most credit cards is how much you earn in rewards based on your spending. This means it’s important to pay attention to each card’s bonus categories, which are the types of purchases that earn extra value. Some of the most popular bonus earning categories include travel and dining purchases, but there are many other earning categories, from groceries to entertainment to streaming services to even fitness club memberships.
When choosing a credit card, you’ll want to match the card that best matches your personal spending patterns so you can maximize how many bonus categories you earn on a regular basis.
Credit cards are notorious for having high interest rates, so it’s vital that you either avoid paying any interest at all by paying your bill in full each and every month or choose a card with a low interest rate. However, when it comes to fees, the calculation is a bit different, as it can sometimes make sense to pay an annual fee — even a substantial one — if the benefits you get from the card are worth the cost.
When choosing the right card for you, you’ll want to calculate how much value you think you’ll get from the card and then compare that amount to the card’s annual fee. If you’re getting more in value than it’s costing you, then the card may be a good choice for you. You’ll also want to consider other fees that might apply to using the card, such as whether it charges foreign transaction fees when you use it on international purchases.
If you are someone who is particularly loyal to a hotel brand or airline, the best credit card for you might be one that comes with great travel perks like elite status, lounge access, room upgrades and complimentary breakfasts, among other things when you book with this card. Premium travel credit cards usually offer these fantastic benefits as well as travel insurance and payment protection. But if you don’t travel often or don’t have a preference on what hotel or airline you use, the sometimes hefty annual fee will not be worth it.
Ideally, you will pay off your balance in full each month to avoid paying interest. However, we realize, especially for big one-off purchases, this isn’t always possible. If you think that this might be the case, always lean towards a credit card with a low APR to avoid costly charges each month.
The idea behind credit cards is simple — you’re borrowing money that you pay back later. If you take a while to pay it back, rather than pay it in full when your credit card statement comes, you’ll be charged interest. The amount is carried over to the next month and you pay interest on the whole balance (unless you’re on a special 0% deal). The entire credit cards industry exists on this basic premise.
Why not just borrow cash from a bank then? One of the biggest perks of using a credit card is the potential rewards you can earn from this type of payment for something – and that’s where TPG comes in, helping find the best credit card and reward program that’s right for you. These come in three main forms – cash back, points and miles and bonus earnings.
Credit card companies offer different kinds of cards to meet different consumer needs. Some people put a lot of money on their cards every month and then pay them off immediately — those people benefit from a card that returns a portion of their spending in the form of rewards. Others tend to carry a balance from month to month — they’re better served with a card that offers a low ongoing interest rate. Still others are working to improve their credit — issuers have cards designed for those people, too.
If you’re interested in frequent flyer miles, hotel points or a retailer’s rebate program, a rewards credit card could be right for you. Rewards credit cards offer proprietary points or miles that can be accumulated and redeemed for free goods, services or travel. In some cases, the rewards earned from certain credit cards can be transferred to a variety of other programs — these are known as flexible rewards.
The upside of rewards credit cards is that in some cases, you can leverage the points or miles to get more value from them than you would from cash. The downside is you must redeem the rewards within the issuer’s loyalty system.
There’s nothing more powerful than cold hard cash. If you’re just looking for money in your pocket, you’ll likely want a cash-back credit card. With a cash-back card, you’ll earn a percentage rebate on every purchase (i.e.: 1%, 2%, 2.5%) that adds up to cash in your account. Most cash-back cards provide the ability to redeem your earned cash back as either a statement credit against other charges on your card, as a check or direct deposit into your bank account, or in some cases for gift cards or at retail partners when making purchases.
Even though you can often get enough value from a credit card to offset the annual fee it charges, some people never want to pay an annual fee for a card. For those folks, there are plenty of no-annual-fee credit card choices on the market today. While you won’t find the top-end benefits, perks and earning rates of cards with annual fees on a free credit card, there are definitely worthwhile options that can earn you plenty of points or cash back.
There are also specific types of credit cards for businesses, for people looking to carry a balance at a low interest rate, for those loyal to a specific airline, hotel or retail brand and many other categories of cards.
To make sure you’re maximizing what a credit card can do for you, you should take time every 12 months to analyze your overall financial picture and determine if each of your current credit cards is serving your needs. If you aren’t racking up bonus earnings in the categories you spend in most often, or if you don’t have the travel benefits you need, or if you’re paying a high annual fee but aren’t taking advantage of a card’s features, it may be time to get a new credit card that better fits your requirements.
Keep in mind that circumstances change over time, and a credit card that was previously right for you may no longer be a good fit. With so many options on the market, there’s no reason to have the wrong credit card in your purse or wallet.
Before you sit down and fill out a credit card application, make sure you know your personal credit score (remember to check your score with all three major credit bureaus), as well as what features you want most in a credit card and the best options on the market with those features. It’s also important to know the application restrictions and rules for the specific financial institution that issues the card you want. You don’t want to waste time and a hard credit inquiry on a card you won’t be able to get.
There is no right or wrong answer. It all depends on your spending habits and financial goals. Some TPG staffers have upwards of 19 credit cards, while others (like myself) only hold five or six. A goal for many pros is to never earn just 1% on any given purchase. Generally, this means having cards that earn bonus rewards in the categories you spend the most in each month and at least once card that earns a decent rewards rate on non-bonus spending. Additionally, many keep cards for the perks they offer.
If a slim wallet of two or three cards helps you hit your goals, then that’s the number of cards you should have. If a wallet filled with 20 or more helps you maximize spending and travel plans, then that’s valid, too. It’s all about your specific needs, wants, and spending habits.
APR stands for annual percentage rate and is basically a percentage that helps you understand the cost of borrowing. In a nutshell, it’s the interest rate plus the additional charges of holding a balance on your credit card and as a rule of thumb the lower the APR the less interest you’ll pay over time.
Before you apply for a credit card, all lenders have to tell you the APR and it can help you make sure you’re getting the best deal if you are someone who typically holds a balance on a credit card.
APR can be a good way to compare different credit cards but it’s worth noting that what you actually pay in interest depends on how and when you pay off your debt.
Generally, APR rates on credit cards range from 15% to 25%. The higher your credit score, typically the lower the percentage. A good credit score makes it a lot easier to get a favourable APR, so improving your credit score is a good first step toward a better APR.
It’s worth noting that these rates are usually based on rates for making new purchases (e.g. buying something online or instore). Rates for other transactions, such as cash withdrawals or balance transfers, may be different.
What APR your credit card has affects how much you pay so it’s worth doing your research – some offer 0% APR for a promotional period on new purchases or balance transfers, but always check the terms and conditions carefully to make sure you’re aware of exactly what you’ll be paying.
Credit card terminology can be confusing for beginners. What’s the difference between an issuer, a card’s network and a cobranded company?
The issuing bank is the institution that provides the financial backing for a credit card. It will be the one that typically determines (and pays for) credit card rewards and benefits. Examples include Chase and Capital One. Payment networks, on the other hand, are the companies that process the transactions between a merchant and an issuer, such as Mastercard or Visa.
Some issuers also do their own payment processing, such as American Express or Discover. Cobranded credit cards pair a credit card issuer with a company to provide unique brand-specific earnings for a cardholder. As an example, let’s take the Hilton Honors American Express Surpass® Card. American Express is both the issuer and the payment network, while Hilton is the cobranded company.
There are dozens of financial institutions that issue credit cards, from international banks to local credit unions. If you prefer individual attention and a one-on-one relationship with your issuer, you might want to look for a neighborhood bank that can offer you that level of attention.
As you search for the best credit card for your needs, it’s best to familiarize yourself with the different types of companies in the industry. Simply put, every credit card has an issuer and a network but many of also have co-brand partners which can open up another level of perks.
Remember, the largest issuers tend to be able to offer the most generous perks thanks to being able to leverage their size. So, if your focus is on the best earning rates and benefits, you might prefer to apply with the largest issuers with the most robust credit card portfolios. These issuers include Chase, American Express, Citi, Capital One, Barclays, Bank of America and Wells Fargo.
The issuer is the bank that maintains your credit card account and is most likely to be a major bank like Chase, Capital One or Wells Fargo or it perhaps your local bank or credit union. The issuer sends your statement every month and collects your payments.
The network acts as a “go-between” for all your credit card transactions. For instance, Visa, Mastercard, American Express and Discover are payment networks and they also determine where you can use your card. It’s worth noting too that American Express and Discover are special in that they are both issuers and networks.
The card partner is a store, airline, hotel or another brand whose name appears on the card and whose loyalty rewards program is tied to it. For instance, if you have an American Airlines credit card, you earn miles with your purchases. American operates the frequent-flyer program where you would use those miles. A branded card will also often offer other perks such as room upgrades for a hotel card or discounts for a store card.
For rates and fees of the Amex Platinum card, click here.
For rates and fees of the Amex Gold card, click here.
For rates and fees of the Blue Cash Preferred, click here.
For rates and fees of the Blue Cash Everyday, click here.
For rates and fees of the Hilton Honors Business Card, click here.
For rates and fees of the Amex Business Platinum card, click here.
For rates and fees of the Amex Business Gold, click here.
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Editorial Note: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.