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A Guide to Finding the Best Credit Card Offer for You
The credit cards in your wallet are some of the most important financial tools in your life. You might be on the hunt for the perfect balance transfer offer to help you pay off your holiday shopping. Or you could have your eye out for the right cash back credit card offer in preparation for spring renovations.
What is the best credit card in January 2021?
January brings a fair number of bills due, and relief would be much welcome for many of us. Whether it was spending on outdoor decorations (which we were all apt to do in 2020, since we were 数字货币交易软件_数字货币手机app下载homebound) or on gifts for the family (and ourselves), there’s a decent chance you have a fair amount of card debt to get through.
That’s why we’re naming the Citi® Double Cash Card the best credit card for January 2021. With the Double Cash, you can transfer a balance (or two), then pay 0% intro APR for 18 months (then it’s 13.99%-23.99% variable after that). And when you are done paying off the debt, you have a rewards card with longevity – earn 1% cash back when you make a purchase and earn another 1% cash when you pay for the purchase.
Of course, just because we love the Double Cash, that doesn’t mean it’s the best card for you. Simply put, the best credit cards are the products that best suit your needs. Below we talk about other great cards that could work for you.
Best Credit Cards
Blue Cash Preferred® Card from American Express: Best for rewards
Cardholders earn 6% cash back at U.S. supermarkets (on up to $6,000 in purchases per year, then 1%) and 3% back at U.S. gas stations and on transit. For those who aren’t sure whether they spend enough on groceries to justify this card’s $95 annual fee, the Blue Cash Preferred has a little sister, the Blue Cash Everyday. Ideal for: the frugal parent.
Blue Cash Everyday® Card from American Express: Best for no annual fee
While there are plenty of no annual fee cards on the market, this one also offers high rewards rates on everyday purchases. You’ll earn 3% cash back at U.S. supermarkets (on up to $6,000 in purchases each year, then 1%) and 2% cash back at U.S. gas stations and select U.S. department stores. However, its ongoing rewards don’t match that of the Blue Cash Preferred. Ideal for: occasional shoppers.
Capital One Quicksilver Cash Rewards Credit Card: Best for starter credit card
If you’re new to the world of credit, you’ll probably want a card that’s both lucrative and easy to manage. The Capital One Quicksilver Cash Rewards Credit Card fits that bill, and it offers a nice bonus for new cardmembers. However, if you’re looking for a flat-rate cash back card, you can find rates higher than 1.5%. Ideal for: the new cardholder.
Citi® Double Cash Card: Best for flat-rate cash back
This card possesses one of the best flat-rate cash back offers. Earn 1% back when you purchase, then earn another 1% back when you pay for the item. That’s a better rate than many other cash back cards with no annual fee. The Citi Double Cash offers a generous 0% intro APR on balance transfers for 18 months (then it’s 13.99%-23.99% variable). There’s no 0% intro APR on purchases, however. Ideal for: the shopper who wants options.
Citi® Diamond Preferred® Card: Best for balance transfers
Get 0% intro APR for 18 months on balance transfers completed within the first 4 months, which is one of the longest offers in the industry (it’s 14.74%-24.74% variable after that). In addition, get 0% intro APR on new purchases for 18 months (it’s 14.74%-24.74% variable after that). Sadly, the Citi Diamond Preferred doesn’t offer cash back, points or miles, including no sign-up bonus. That limits your options once the 0% intro APR offers end. Ideal for: the consumer paying down debt.
Discover it® Cash Back: Best for rotating category cash back
The flagship of the Discover cards, the Discover it Cash Back rewards you with 5% cash back on rotating categories such as restaurants and gas stations up to $1,500 a quarter (quarterly sign-up required; 1% after maximum spend). That’s $75 earned a quarter, or $300 for the year. With this no annual fee card, Discover will match your cash back at the end of your first year, making that $300 into $600 back for the first year. Also, get 0% intro APR on purchases and balance transfers for 14 months. Then it’s 11.99%-22.99% variable, which is a super low starting rate. Ideal for: the shopping optimizer.
Capital One Venture Rewards Credit Card: Best for traveler
Receive up to $100 credit on Global Entry or TSA PreCheck, and earn 60,000 bonus miles after a $3,000 spend in the first 3 months, which is worth $600 in travel. The annual fee of $95 is not waived the first year. Ideal for: the traveler looking for options.
Discover it® Student Cash Back: Best for students
In addition to unusually strong rewards, the Discover it Student Cash Back offers a $20 statement credit for up to the next 5 years when you get at least a 3.0 GPA. This card is also light on fees, including no annual fee. Like the Discover it® Cash Back, this card gives you 5% cash back on rotating categories for up to $1,500 spend each quarter (quarterly sign-up required; 1% after maximum spend). In addition, Discover will match your cash back at the end of your first year. Ideal for: the consumer looking for college-related perks.
American Express Cash Magnet® Card: Best for low interest
With good credit, you may qualify for the low end of the Cash Magnet’s variable APR range (13.99%-23.99%), which is quite low. You’ll pay no annual fee while earning unlimited 1.5% cash back on every purchase. While this isn’t the highest rate on the market, you won’t have to keep track of spending caps or bonus categories. Ideal for: the simplicity seeker.
Secured Mastercard® from Capital One: Best for no credit history
The problem with many starter credit cards is a combination of high fees and low credit limits. That’s why the Secured Mastercard from Capital One is a great choice – there’s no annual fee and the credit limit will be anywhere between $200 and $1,000, depending on how much you provide as a security deposit. Ideal for: the credit builder.
Credit One Bank® Visa® for Rebuilding Credit: Best for bad credit
The process of rebuilding credit can be daunting. However, this card’s features like the ability to choose your own payment date and set custom credit limit alerts make it a bit easier to stick to your goals. You’ll also have free online access to your Experian credit score, making it easier to track your progress. Eligible essentials like gas, groceries, and phone and cable bills earn 1% cash back. Ideal for: the consumer looking to rebuild credit.
Costco Anywhere Visa® Card by Citi: Best for gas
Cardholders earn 4% cash back on eligible gas purchases (on the first $7,000 in purchases annually, 1% thereafter). It’s hard to find a better gas offer on the market. You do need to pay for the annual Costco membership ($60) to use this card, but this is a great way to get even more value out of your membership. Ideal for: the Costco shopper.
American Express Blue Business Cash™ Card: Best for business
Earn 2% cash back on all eligible purchases up to $50,000 each calendar year, then it’s 1% cash back. The cash back you earn is automatically credited to your statement. You also have the opportunity to spend beyond your credit limit with Expanded Buying Power. The American Express Blue Business Cash Card offers 0% intro APR for 12 months on purchases, then it’s 13.24%-19.24% variable, which is quite low for a regular APR rate. Also, this card has no annual fee. Like most other business credit cards, this card doesn’t have a 0% intro APR offer on balance transfers. Ideal for: the solopreneur.
Delta Skymiles® Gold American Express Card: Best for airline miles
Cardholders earn 2x miles on Delta purchases, but you don’t have to be a frequent traveler to rack up airline miles. Plus, Delta Skymiles are more valuable than the average airline mile – we estimate Delta Skymiles are worth 1.61 cents per mile. Complementing the far-reaching rewards structure is a long list of perks and benefits including priority boarding, purchase protection and free checked bags on Delta flights. The introductory bonus is strong for the required spend – 35,000 miles after spending $1,000 in the first 3 months. There’s a $99 annual fee, although it’s waived the first year. Ideal for: the globe-trotter.
Chase Sapphire Reserve® Card: Best for sign-up bonus
Earn 50,000 bonus points after spending $4,000 on purchases within the first 3 months of opening an account. The plethora of perks, credits and rewards that come with the Chase Sapphire Reserve are sure to please the luxury traveler. A $300 annual travel credit, access to 1,000+ airport lounges worldwide after enrollment in Priority Pass™ Select and up to a $100 Global Entry or TSA PreCheck® credit are just a few of the added perks cardholders can enjoy. The $550 annual fee is steep, although those who often travel and like to do so in style will get that value and more. Ideal for: the big spender – and rewards seeker.
Credit Cards 101: How do they work?
We talked earlier about what credit cards are; next on the checklist is how do they work, why you can trust them and which card issuers are consumers’ favorites.
Here’s how credit cards work: You present your card or account number to a merchant when you want to make a purchase, and if it’s a rewards card, the card issuer credits you with cash back, points or miles. You get a monthly bill, by email or online, with the purchase charges and any interest charges.
If you don’t carry a balance month to month, then you don’t pay interest. Carry a balance, and the interest starts accumulating. There are ways to mitigate those charges, which we’ll get into in a bit.
Which type of card is best for you?
There are a few core reasons why you may be looking for a new credit card. Take a look at our prompts, see what matches your needs and click on the card type that seems to best suit you.
|Card category||Does this sound like you?|
- Do you want to fund your next trip through rewards?
- Are you looking to maximize your earning potential?
- Do you want to earn rewards without thinking about which card to use?
|0% intro APR/balance transfer|
- Do you have a credit card balance and want to save on interest rates?
- Do you want to consolidate card balances?
- Do you have a large upcoming purchase?
- Do you often turn to a favorite airline or hotel brand for travel?
- Do you often shop with a single merchant, such as Amazon.com or Target?
- Have you never had a credit card before?
- Do you have a low credit score and want to build it?
- Do you want the convenience of a credit card?
- Do you have a small business or are you a sole proprietor and need access to capital?
- Do you want to provide employees cards?
- Do you want to separate your business and personal purchases?
- Do you need to build credit?
- Do you want to take advantage of student cards’ special features?
- Are you looking for shopping convenience?
- Do you want to learn how to use rewards?
Get rewarded with points, miles or cash back when you use these cards. Often, rewards cards fall in one of two buckets: cash back and travel, although there are others, as indicated here.
Types of cards
- Cash back
- Flat rate – This card often has no annual fee, but typically requires good or excellent credit. The regular percentage rate is often quite low. There is often a sign-up bonus. Suggested card: Citi® Double Cash Card
- Rotating category – While this card may not have a sign-up bonus, there may be a year-end reward. There’s usually no annual fee and the regular APR is usually low. Suggested card: Discover it® Cash Back
- Tiered – There can be an annual fee on this type of card, but the sign-up bonus is often quite generous. The regular interest rate varies. Suggested card: Capital One SavorOne Cash Rewards Credit Card
- Airline or hotel – The annual fee can get into the hundreds, and the regular interest rate is pretty high, but the sign-up bonus and ongoing rewards are among the best in the industry. Suggested card: Southwest Rapid Rewards® Plus Credit Card
- General purpose – General purpose travel cards are great for the traveler who craves flexibility. A few come with no annual fee, although the sign-up bonus on those can below. Benefits can include cancellation insurance and other features. Suggested card: Capital One Venture Rewards Credit Card
- Other types
- J.D. Power 2020 U.S. Credit Card Satisfaction Survey
What is the most surprising aspect of your credit card?
We checked in with experts about surprising aspects of cards. Here’s what they had to say:
Choose rewards wisely
“It’s really easy to get wowed by a reward card’s earning rate – our brains like to equate ‘bigger number’ with ‘more cash back’ or ‘better card.’ But in truth, you want to choose a rewards card that best aligns with where you spend most, not necessarily one with the highest earning rate. A card with a 5% earning rate on travel isn’t going to do much for you if you don’t travel very often! A card that offers 3% back on groceries, on the other hand, could end up creating much more value over your average year.”
Editor’s pick: Money Tamer
Editor’s pick: Experian, Equifax and TransUnion. They collect credit-related data from lenders, who send your payment habits to the credit bureaus. You can get your free credit reports once a year from AnnualCreditReport.com.
Credit scores:There are 2 primary scoring models – the primary one, FICO, and the newer one, Score ranges are 300-850, with the higher the number the better. You can get your FICO score from a number of sources, including for free from many credit card issuers and from FICO itself, which charges a fee.
When is the best time to apply for a credit card?
If you go strictly by the calendar, more people prefer to apply for new credit cards late in the year when holiday shopping gears up and juicy sign-up bonuses appear. Equifax data from 2008 to 2017 shows that credit card applications were 15% higher from October through December than January through March.
But what if your circumstances aren’t tied to the calendar and you have other reasons for getting a new card? Figuring out when to apply for a credit card depends on several factors, some that are within your control and others that are entirely external.
Here are some questions to consider:
What’s your current credit status?
Have you applied for any other lines of credit recently (mortgage, car loan, etc.) and do you expect to seek them out in the near future? Credit applications that trigger hard inquiries on your credit report will temporarily lower your credit score.
A credit card that offers pre-qualification without a hard inquiry can help you gauge your chances of approval, but the actual application would still affect your credit in the short term. The best time to apply for a credit card might be when you have no immediate plans for taking out other credit lines.
What kind of offers are available?
A generous sign-up bonus offering travel miles, loyalty points or cash back can provide a strong incentive to apply for a credit card. So can special promotions that become available as issuers respond to consumer preferences and economic trends.
Just make sure the card fits your spending habits and makes sense as a long-term financial commitment. A big sign-up bonus coupled with a big annual fee could mean diminishing returns over the long haul.
How to choose a credit card
You understand now how cards work and why they are important, but how do you choose one? When you’re trying to select a credit card, there are a number of moving parts, including rewards, fees, 0% intro APR offers, and of course, your credit score. Here, we jump into the factors to consider and types of cards that are the best for your goals.
Choose a card that accepts your credit score
Card issuers primarily look at your credit score and income to decide whether you should be granted the card you want, so this is your first stop. Typically, the higher the score, the better the benefits and rewards, although good credit will get you access to the bulk of cards. If you are new to cards or are trying to improve your credit, there are also cards for you.
Types of cards for credit building
- No credit – This is a good choice if you have no credit history. Some of these cards offer rewards, but watch out for fees and the regular APR can be high. Suggested card:Discover it® Secured
- Bad credit – You can find a card that accepts bad credit with no annual fee, but many of these cards have weird, little one-off fees that you need to watch out for. The regular APR will almost certainly be high, although some offer rewards. Suggested card:Indigo® Platinum Mastercard®
- Fair credit – If you are trying to improve your credit into the good or excellent category, a card that accepts fair or average credit is a good choice. There may be an annual fee, regular APR may be higher, and a 0% intro APR is unlikely. Suggested card:Credit One Bank® Platinum Rewards Visa
Bottom line: Pick a card that has a high likelihood of accepting your credit score. Your opportunity to get that amazing cash back card or airline card might need to come another day.
Are you looking for rewards?
Prime reasons for getting a credit card today are to earn rewards and benefits. Whether you are looking to travel in 2021 or you would like to earn some cash back for your spending, there are myriad types of cards to choose from. Benefits such as different kinds of insurance, travel credits and airport lounge access are also often available. There are also sign-up bonuses to consider, which can make your new card well worth it.
Types of cards for earning rewards
- Travel – General purpose travel cards are great for the traveler who craves flexibility. A few come with no annual fee, although the sign-up bonus on those can be lower. Benefits can include cancellation insurance and other features. Suggested card:Capital One Venture Rewards Credit Card
- Co-branded – Co-branded cards can include joint ventures between card issuers and airlines, hotel brands, stores and even Amazon.com. You often earn boosted rewards when you shop with the brand. Suggested card:United℠ Explorer Card
- Cash back – There is a broad range of cash back cards, including flat-rate cards, rotating category cards and tiered category cash back cards, each with their own advantages. For example, the consumer who wants to earn rewards without thinking about which card to use would enjoy a flat-rate card, while the cardholder who is looking to maximize rewards might consider a tiered or rotating category card. Suggested card:Capital One SavorOne Cash Rewards Credit Card
Bottom line: Do the math and make sure your choice of card will be used to its fullest potential. For example, if you aren’t loyal to a specific airline, why are you choosing an airline card?
Pay attention to fees and penalties
When choosing a credit card, be mindful of such charges as annual fees and foreign transaction fees. There can also be penalty APRs and late fees to worry about.
Cards without certain fees
- No annual fee – If you are an occasional card user or just don’t treasure the idea of paying a fee each year for the honor of holding the card, take a look at cards with no annual fee. Keep in mind that some annual fee cards waive the fee the first year. Suggested card:Blue Cash Everyday from American Express
- No foreign transaction fee – Increasingly, travel cards waive these fees, and Discover and Capital One have long offered all of their products without a foreign transaction fee. These cards are ideal for overseas travel and making purchases that run through a foreign bank. Suggested card:Capital One Quicksilver Cash Rewards Credit Card
- Other fees – Some cards offer no late fee the first time and no penalty APR, such as the Discover cards, so check the card’s Schumer Box for these goodies. Suggested card:Discover it® chrome
Bottom line: Not all fees should necessarily be avoided at all costs (and you probably can’t, anyway). For example, if you are willing to pay an annual fee, you may get better benefits and rewards and actually come out ahead financially. We compare annual and no annual fee cards below for you in our handy-dandy chart.
Do you have credit card debt?
Whether you have a large purchase coming up, a balance on an older card or you just have a habit of carrying your balance over to the next month, 0% intro APR cards and low interest products can be good options. The 0% intro APR cards typically offer that rate for 6 months to 18 months, while the low interest offers are usually ongoing.
0% intro APR and low interest cards
- Purchases – These are excellent cards for when you face a large, upcoming purchase and you want to avoid paying interest for a period of time. Suggested card:American Express Cash Magnet® Card
- Balance transfers – These are ideal when you have debt on older cards and you want to pay them down while not paying interest for a period of time. Suggested card:Citi® Diamond Preferred® Card
- Low interest – Low interest cards usually offer a range that is variable, but if you are a low risk, rock-bottom rates can be yours. For example, the Discover it cards’ rates are typically among the lowest of national brands. Suggested card:Discover it Cash Back
Bottom line: Most cards’ regular interest rates are variable, and even if the card’s rate starts on the low end, you may be granted a higher rate for a number of reasons, including if you show yourself to be a credit risk.
Are you in the market for a specialty card?
There are other types of cards to choose from, such as cards that offer special features for the college student and cards that offer rewards specific to the consumer in business.
Business and student cards
- Student cards – These often offer competitive rewards, although a sign-up bonus is rare. Annual fees are a rarity, but credit limits are typically low, depending on your income. Suggested card:Discover it® Student Cash Back
- Business credit cards – These aren’t just for the owner of a business – the solopreneur or gig worker can also benefit. These cards are good for sorting out your personal from your business expenses, and there’s a strong likelihood of rewards offered. Suggested card:American Express Blue Business Cash™ Card
Bottom line: Heads up that business cards aren’t required to offer the legal protections of consumer cards, and student cards are basically the same as their mainstream counterparts, but without the sign-up bonus or credit limit. That said, the features of a business card or student card may outweigh those considerations.
How many credit cards should you have?
While there’s no hard-and-fast rule as to how many credit cards you should have, it’s a good idea to hold onto at least two cards – each from a different card network and each offering a different type of rewards (cash back, travel rewards, etc.). This should make it easier to tailor your earnings to your spending patterns and enjoy greater variety and flexibility in how you redeem rewards. Having two cards with different networks also increases the likelihood that you will have a card that will be accepted by a merchant.
In some cases, you can also “stack” cards from a single issuer to get even more value out of your rewards. For example, you could pair the Chase Ink Business Unlimited Credit Card (which earns 1.5% cash back on every purchase) with a premium Chase card like the Chase Sapphire Preferred Card (which gets you 2 points per dollar on travel and restaurant purchases). This allows you to convert the cash back from your Ink Business Unlimited card to Ultimate Rewards points and enjoy a 25% boost in point value when you redeem them for travel through the Chase travel portal.
Of course, if you’re still new to credit cards, you should stick to just one or two until you get used to them. If tracking your spending from quarter to quarter or swapping out cards between the gas station and grocery store sounds like more of a headache than it’s worth, a card that offers travel rewards or cash back at a flat rate on every purchase may be a better fit.