Not all credit cards are created equal. The best card for you depends on your financial situation. Your spending habits, debt balances, and credit score are all important factors to compare against the tools and benefits any individual card offers.
As a starting point, we’ve outlined a few of our favorite credit cards on the market across different categories and for a broad range of credit users, whether you’re looking for cash back savings on your regular purchases, a balance transfer tool to pay down debt, or travel benefits for your next vacation. These are the cards we believe can best help you maximize your dollars and add value back into your wallet.
Before You Start
Credit cards are helpful tools for saving money and building credit, but can also lead to costly debt and interest balances. Before opening a new credit card — especially a rewards card with a high APR and other fees — prepare to use it responsibly and review the basics on how they work. Pay down any existing high-interest debt and establish healthy credit habits like paying your balances in full and on time each month.
Our Picks for the Best Credit Cards
- Intro offer:Earn an Additional 1.5% Cash Back
- Annual fee:$0
- Regular APR:15.24% to 23.99% Variable
- Recommended credit score:670-850 (Good to Excellent)
Enjoy 5% cash back on travel purchased through Chase Ultimate Rewards®, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more;. 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service. 1.5% on all other purchases.
NextAdvisor’s Take
- Flexible, hybrid rewards structure made up of tiered categories and flat cash back
- No annual fee
- Valuable first-year bonus
- Competitive intro APR period can be useful for paying off large purchases over time
- Not a great choice for international travelers — you’ll incur a 3% foreign transaction fee
- Travel bonus rewards only apply to travel booked through Chase
Additional Card Details
- 0% introductory interest offer on purchases and balance transfers for the first 15 months after account opening, variable 15.24% – 23.99% interest thereafter; intro balance transfer fee of $5 or 3% of the amount of each transfer, whichever is greater in the first 60 days
- 5% cash back on Lyft rides through March 2025
- Complimentary 3-month subscription to Doordash’s DashPass, followed by 50% off DashPass for 9 months (activate by 12/31/24)
- Travel protections
- Purchase protections
- Intro offer:$300
- Annual fee:$0 introductory annual fee for the first year, then $95.
- Regular APR:14.74% – 24.74% Variable
- Recommended credit score:670-850 (Good to Excellent)
6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%). 6% Cash Back on select U.S. streaming subscriptions. 3% Cash Back on transit including taxis/rideshare, parking, tolls, trains, buses and more. 3% Cash Back at U.S. gas stations. 1% Cash Back on other purchases.
NextAdvisor’s Take
- Great rewards in everyday spending categories
- 0% introductory interest offer for new purchases
- Competitive welcome bonus
- $0 introductory annual fee for one year, then $95
- No intro offer for balance transfers
- U.S. supermarket 6% rewards capped after $6,000 annual spend
Additional Card Details
- 0% introductory APR on purchases for the first 12 months, then 14.74% – 24.74% variable APR
- Early event ticket access and seating through American Express Experiences
- Eligible for Amex Pay It, Plan It
- Travel protections
- Purchase protections
- Minimum $25 rewards redemption
- Intro offer:75,000 miles
- Annual fee:$95
- Regular APR:16.24% – 24.24% (Variable)
- Recommended credit score:670-850 (Good to Excellent)
Earn 5X miles on hotels and rental cars booked through Capital One Travel, where you’ll get Capital One’s best prices on thousands of trip options. Earn unlimited 2X miles on every purchase, every day.
NextAdvisor’s Take
- Flat 2x miles on every purchase
- Generous sign-up bonus
- Flexible rewards redemptions
- No foreign transaction fees
- High variable APR
- $95 annual fee
- Travel transfer partners options and value aren’t as good as some other programs
Additional Card Details
- Flexible redemption options to use rewards toward future travel
- No foreign transaction fees
- Up to $100 credit toward Global Entry or TSA PreCheck® membership every four years
- Two complimentary visits to Capital One Lounge locations each year
- Intro offer:50,000 points
- Annual fee:$550
- Regular APR:17.24% – 24.24% Variable
- Recommended credit score:740-850 (Excellent)
Earn 10x total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards®. Earn 5x total points on air travel through Chase Ultimate Rewards®. Earn 3x points on other travel and dining. Earn 1 point per $1 spent on all other purchases.
NextAdvisor’s Take
- Valuable welcome bonus
- $300 travel credit and other added benefits
- 50% points value boost when redeemed for travel booked through Chase Ultimate Rewards
- No foreign transaction fee
- Metal card
- $550 annual fee
- High APR
- Not a great choice if you travel infrequently
Additional Card Details
- 50% redemption boost on points redeemed for travel through Chase Ultimate Rewards or eligible statement credits via Pay Yourself Back
- $300 annual travel credit
- Up to $100 credit every four years toward Global Entry or TSA PreCheck fee
- Complimentary airport lounge access through Priority Pass Select membership
- 10x points on Lyft rides through March 2025
- Complimentary DashPass from DoorDash subscription through 12/31/24
- Travel protections
- Purchase protections
- Intro APR:0% intro APR for up to 21 months from account opening
- Annual fee:$0
- Regular APR:13.74% – 25.74% Variable APR
- Recommended credit score:670-850 (Good to Excellent)
NextAdvisor’s Take
- Long intro APR
- No annual fee
- Cell phone protection
- No rewards
- High APR after the introductory offer ends
- Must meet requirements to get full 21 months of 0% intro APR
Additional Card Details
- Get a 0% introductory APR for up to 21 months from account opening on purchases and qualifying balance transfers — start with a 0% intro APR for 18 months from account opening on purchases and qualifying balance transfers, then unlock up to three additional months with on-time minimum payments during the 18-month offer and the extension period, then a 13.74% to 25.74% variable APR thereafter
- Cell phone protection worth up to $600 when you pay your bill with your eligible Wells Fargo card (subject to a $25 deductible)
- Get access to My Wells Fargo Deals: earn cash back in the form of a statement credit when you use your eligible Wells Fargo card with select retailers
- Roadside dispatch
- Intro offer:N/A
- Annual fee:$0
- Regular APR:14.74% – 24.74% (Variable)
- Recommended credit score:670-850 (Good to Excellent)
Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
NextAdvisor’s Take
- Flat cash back on every purchase
- 18-month 0% intro APR for balance transfers
- No annual fee
- No welcome bonus
- 3% balance transfer fee ($5 minimum) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5)
- Delayed cash back rewards if you carry a balance
Additional Card Details
- Extra incentive to pay down your balance in full: You’ll earn only 1% cash back when you make a purchase, and the other 1% when you pay it off
- 18-month 0% intro period on balance transfers, 14.74% to 24.74% variable APR thereafter
- Redeem cash back for statement credits, direct deposit, check, or convert cash back value to Citi ThankYou points
- $25 minimum cash back redemption
- Balance transfers must be completed within 4 months of account opening and a 3% ($5 minimum) fee applies, After that, your fee will be 5% of each transfer (minimum $5)
- Intro offer:N/A
- Annual fee:$39
- Regular APR:26.99% (Variable)
- Recommended credit score:580-740 (Fair to Good)
Earn unlimited 5% cash back on hotels and rental cars booked through Capital One Travel, where you’ll get Capital One’s best prices on thousands of trip options. Terms apply. Earn unlimited 1.5% cash back on every purchase, every day.
NextAdvisor’s Take
- Earn flat-rate rewards without having to worry about bonus categories
- Available to consumers with fair credit or better
- Flexible rewards redemptions
- No foreign transaction fees
- High variable APR
- $39 annual fee
- Few meaningful cardholder benefits
Additional Card Details
- $39 annual fee
- No foreign transaction fees
- Automatic account review for a higher line of credit in as little as six months
- Access to CreditWise program, to track and monitor credit
- Intro offer:Up to $1,000 cash bonus
- Annual fee:$150
- Regular APR:N/A
- Recommended credit score:670-850 (Good to Excellent)
Earn unlimited 5% cash back on hotels and rental cars booked through Capital One Travel. Earn unlimited 2% cash back on every purchase, everywhere—with no limits or category restrictions.
NextAdvisor’s Take
- No preset spending limit
- Great flat-rate rewards on spending
- Generous bonus offer
- Potential for annual cash back bonus
- No option to carry a balance
- High annual fee for a cash back card
- Minimal cardholder benefits
- High spending required to maximize rewards
Additional Card Details
- Score an annual cash bonus of $200 when you spend $200,000 or more on your card in a year
- Pay-in-full card with no preset spending limit (2.99% fee on any balances not paid in full each month)
- Download spending reports to Quicken®, QuickBooks®, and Excel®
- Free employee cards
- No foreign transaction fees on purchases made abroad
- Roadside assistance
- Extended warranty protection for extra year of coverage on purchases that come with a manufacturer’s warranty
- Intro offer:70,000 points
- Annual fee:$295
- Regular APR:14.99% – 22.99% Variable
- Recommended credit score:670-850 (Good to Excellent)
Get 4X Membership Rewards® points on the 2 select categories where your business spent the most each month. 1X is earned for other purchases. **
NextAdvisor’s Take
- High rewards rate in your biggest spending categories
- Valuable welcome bonus
- No foreign transaction fees (See Rates & Fees)
- 25% airline bonus for eligible redemptions through Amex Travel (up to 250,000 points back per calendar year)
- 4x points rewards only apply to $150,000 in combined spending in bonus categories each year
- High APR if you carry a balance using Pay Over Time
- $295 annual fee
Additional Card Details
- 25% airline bonus on flights booked with points through AmexTravel.com, which applies to any flight on your selected qualifying airline. You can earn up to 250,000 points back per calendar year
- No preset spending limit, but you can use Pay Over Time to carry a balance with 14.99% – 22.99% variable APR
- Year-end summaries for business expense management
- Extended warranty and purchase protection
- Trip delay and baggage insurance
- Global Assist Hotline
- Up to $100 hotel credit when you book a stay with The Hotel Collection of at least two consecutive nights
- No foreign transaction fees
Best Credit Cards of January 2022 Summary
| Card Name | What It’s Good For | Intro Bonus | Rewards | Annual Fee | Credit Requirement |
|---|---|---|---|---|---|
| Chase Freedom Unlimited | Cash Back Value for No Annual Fee | • Earn an extra 1.5% cash back on everything you buy (on up to $20,000 spent in the first year) | • 5% cash back on travel through Chase Ultimate Rewards • 3% cash back on dining and at drugstores • at least 1.5% cash back on other purchases | $0 | 670 – 850 (good to excellent) |
| Blue Cash Preferred from American Express | Maximum Cash Back on Everyday Spending | • $300 statement credit after you spend $3,000 in purchases within the first 6 months of card membership. | • 6% cash back at U.S. supermarkets (up to $6,000 spending per year, then 1%) and on select U.S. streaming subscriptions • 3% cash back at U.S. gas stations and on transit • 1% cash back on other purchases | $0 introductory annual fee for the first year, then $95 after that | 670 – 850 (good to excellent) |
| Capital One Venture Rewards Credit Card | Travel for Rewards Beginners | • 75,000 miles if you spend $4,000 on purchases in the first three months from account opening. | • 2x miles on every purchase | $95 | 670 – 850 (good to excellent) |
| Chase Sapphire Reserve | Travel for Premium Rewards | • 50,000 Ultimate Rewards points after spending $4,000 within first 3 months | • 3x points on dining and travel purchases • 1x points on all other purchases | $550 | 740 – 850 (excellent) |
| Wells Fargo Reflect Card | 0% Interest for Long Intro Offer | N/A | N/A | $0 | 670 – 850 (good to excellent) |
| Citi Double Cash Card | 0% Interest and Value After Intro Period | N/A | • 2% cash back on all purchases, 1% as you buy, 1% as you pay them off | $0 | 670 – 850 (good to excellent) |
| Capital One QuicksilverOne Cash Rewards Card | Building Credit Starter Credit Card | N/A | • 1.5% cash back on every purchase | $39 | 580 – 740 (fair to good) |
| Capital One Spark Cash Plus | Business Everyday Spending | • Up to $1,000: $500 after spending $5,000 within first 3 months and $500 after spending $50,000 within the first 6 months | • 2% cash back on all purchases | $150 | 670 – 850 (good to excellent) |
| American Express Business Gold Card | Business Travel | • Earn 70,000 Membership Rewards® points after you spend $10,000 on eligible purchases within the first 3 months of Card Membership. Terms Apply. | • 4x Membership Rewards points on 2 eligible categories in which your business spends most each month (on up to $150,000 in combined purchases each calendar year, then 1x) • 1x points on other purchases | $295 | 670 – 850 (good to excellent) |
A Beginner’s Guide to Credit Cards
How Credit Cards Work
Credit cards are financial tools used to make purchases and build credit. You can use a credit card to buy something and pay it off at the end of your billing cycle (typically month-to-month) or over time. If you pay your balance over time, you’ll accrue interest at the rate of your assigned variable APR.
People make purchases using credit cards for a number of reasons, including rewards and other benefits, security protections, and payment flexibility. Credit cards are also a great tool for building credit. A great credit score can help you qualify for other cards and loans over time at competitive rates. But accumulating debt with a credit card can have a negative effect on your credit. Failure to pay your amount due, late payments, and overspending on your credit card can cause damage to your credit score that can take years to reverse.
How Credit Card Rewards Work
Credit card rewards can help you earn cash back, points, or miles on the purchases you make everyday — like groceries and dining out — or on big purchases you make only occasionally — like an international vacation. Matching your spending habits with a great rewards card can help you save hundreds of dollars each year on the purchases you already make.
But there is a catch to those great savings. If you carry a balance on your card, accruing interest over time, the interest you pay will far exceed any rewards value a credit card can offer. If you’re looking to maximize your spending with rewards, paying your credit card balances in full and on time each month is essential.
Types of rewards
- Cash Back Rewards: Cash back credit cards earn a percentage back on select purchases, which you can redeem for cash or statement credits toward other purchases. There are three main types of cash back rewards: a flat cash back percentage on every purchase, tiered cash back rewards on specific categories (like 3% on dining, groceries or gas or 2% on travel), and rotating rewards categories that change quarterly (typically a 5% bonus rate).
- Miles and Points Rewards: Like cash back rewards, points and miles are earned as a portion of your purchases made in specific categories. You might earn 3 points per dollar spent on travel, for example, or 4x miles per dollar spent with streaming service providers. Options for redeeming points vary based on your issuer’s rewards program, and may include redemptions with specific retailers, travel or points transfers to partners, statement credits or cash back, and gift cards. Travel is often the most valuable of these redemption options, and co-branded rewards cards may only earn points or miles toward a specific loyalty program, like Delta SkyMiles or Marriott Bonvoy.
Tracking Your Rewards
If you have a single rewards card, you can keep track of your rewards balance through your online or mobile app account. You can also find a rewards summary on your credit card statement each month.
It can take a bit more time and effort to track rewards on multiple credit cards, especially if those cards are issued by different credit card companies. If you have multiple cards from the same issuer, you can often view them within the same account login; rewards may even pool together under a single account automatically. For cards across multiple issuers, regularly stay on top of the rewards you’re earning and your redemption options for each, so you can maximize all your cash back, points, and miles earned when it’s time to cash in.
The Rewards Process
- Earn Rewards: Use your rewards credit card to make purchases in eligible bonus categories, accumulating rewards points, miles, or cash back over time.
- Evaluate Redemption Options: Log into your card account to view the redemption options your card issuer offers. If you value simplicity, straightforward statement credits might be your preferred choice, or maybe you want to transfer to your preferred airline loyalty program instead. Keep an eye on your inbox for limited time redemption offers from your issuer, and make sure you know when or if your points expire.
- Redeem Rewards: When you’re ready to redeem, log into your online account and choose your preferred method. You may redeem at regular intervals or save your points, miles, or cash back for a bigger return less frequently, like the next time you want to book a trip.
How Credit Card Interest Works
Credit cards can earn valuable savings on your spending, as long as you’re careful not to take on long-lasting, high-interest debt.
Credit cards carry extraordinarily high variable APRs (annual percentage rate, or your interest rate in yearly terms). Even in today’s low rate environment, average credit card APRs remain over 15%, with some reaching 24% and even beyond. Any balance remaining on your card after your monthly payment is due will accrue interest daily until the balance is paid.
Generally, the better your credit score, the lower your assigned variable APR. But you can avoid paying interest altogether — and forgo the risk of high-interest debt — by using your credit card like a debit card. Never charge more to your credit card than you can afford to pay off at the end of — or throughout —the month, and pay your balances in full (not just the minimum amount due) by the due date. This will help you avoid interest and, over time, build a strong credit score.
Different Types of Credit Cards
Credit cards are generally used in the same way no matter which one you choose, but picking the right type of credit card for you can help ensure your chances of approval and gain the maximum value from your card over time.
Cash Back
Cash back credit cards are rewards credit cards that offer a percentage back on eligible purchases. They may offer a flat cash back percentage on every purchase, a tiered rewards structure with bonus cash back on certain categories, revolving rewards that change quarterly, or some combination of these. Cash back credit cards typically have no annual fee and require good to excellent credit.
Rewards and Travel
Rewards and travel credit cards can offer some of the best savings, but they often come for a price. Cash back cards are rewards cards, as well as cards that earn points or miles on eligible purchases (often travel-related), which you can redeem for a number of options depending on the issuer, including travel booking, gift cards, statement credits, or online purchases. Some rewards and travel cards offer no annual fee, while more premium cards may charge $95, $250, or even $550 annually. These cards generally require excellent credit for approval.
Balance Transfer
Balance transfer credit cards can be a useful tool for debt payoff. These cards offer a reduced interest rate (generally 0%) over an introductory period (usually 12-18 months), during which you can transfer and pay down debt from other credit cards or loans. Some balance transfer cards also function as cash back or rewards cards after the intro period ends, while others are designed to be used solely as debt payoff tools. These cards generally require good to excellent credit for approval.
0% and Low Interest
0% interest credit cards, like balance transfer cards, offer a reduced interest rate over an introductory period. But instead of transferring old debt, this reduced interest applies to new purchases you make with the card. This can be useful if you have a large purchase coming up and would like the flexibility to pay it off interest-free over time rather than upfront. 0% interest cards generally require good to excellent credit.
Student Credit Cards
Student credit cards are designed to help students with little or no credit history build a credit score and establish healthy credit habits. These cards work in the same way as regular credit cards and may offer rewards or cash back in everyday categories, but are marketed specifically to students. Student cards may have lower interest rates and credit limits and often carry no annual fee.
Credit Cards for Building Credit
Like student credit cards, credit cards for building credit can be used to establish credit and begin practicing healthy credit habits. These cards are for people with poor credit, so you can still get approved even without a good credit score, but they usually offer bare-bones benefits and no rewards. Many credit-building cards are secured credit cards, which require a security deposit upon approval. This deposit may act as your credit line, which is returned when you upgrade to a standard credit card or close your account in good standing.
Small Business Credit Cards
Business credit cards work the same as personal cards, but with rewards and benefits tailored to small business owners, freelancers, or other businesses. Not everyone can qualify for a business credit card — you must have some sort of business or sole proprietorship for approval. These can be helpful tools for separating your business expenses from personal spending, and saving on frequent purchases like travel, office supplies, internet services, and more.
How to Pick the Best Credit Card for You
Before applying, take time to prepare your credit and information you’ll need to get a credit card.
How to Get a Credit Card
- Check your credit. Evaluate your credit score and the information on your credit report to see where you stand and what types of cards you may be eligible for.
- Choose the right credit card. The card you apply for should align with your goals (earn rewards, build credit, etc.) and your creditworthiness, based on your credit score.
- See if you prequalify. Check prequalification offers for the card you’re interested in. This allows you to see whether you’re eligible for a card offer without undergoing a hard credit check.
- Submit your application. You’ll need to provide personal information including your full name, address, and income, plus agree to a credit check when you apply.
As you narrow down your options to the specific card you want to apply for, there are a few more factors to consider, ranging from short-term benefits to ongoing costs. Here are a few to keep in mind:
Annual Fee
The annual cost of card ownership. Many cards carry no annual fee, while premium rewards cards can charge more than $500 each year.
Other Fees
Foreign transaction fees, balance transfer fees, late payment fees, cash advance fees and more all vary by card and can increase the cost of your card if incurred.
Interest Rate
Your card’s interest rate (expressed in yearly terms as APR) determines how much you’ll pay when you carry a balance month-to-month. There are two different APRs to know:
- Introductory: Some cards offer an introductory APR on new purchases or balance transfers (or both) for a limited time. This is often a 0% APR offer and often lasts several months after account opening.
- Ongoing: Your ongoing APR will likely be a variable interest rate based on the prime rate and determined by your credit score. Because it’s variable, it can change over time.
Rewards
Rewards, whether cash back, points, or miles, are often a primary determining factor for prospective cardholders. Use your previous spending habits and preferred redemption methods to determine what rewards structures may best serve you.
Welcome Bonus
A great welcome bonus can be a major perk of a new credit card, and boost your initial earnings by hundreds of dollars. But while it’s a good sign-up perk, a high-value welcome bonus offers no long-term value.
Other Benefits
Many rewards cards (especially those with higher costs or that require excellent credit) offer ongoing benefits beyond rewards, such as annual credits toward certain purchases and merchants; access to events, lounges, and experiences; and additional savings on your spending. If they fit with spending you would have made anyway, these added benefits can help offset an annual fee on a new rewards card.
Credit Card Issuers, Networks, and Co-Brands
Every credit card is issued by a financial institution (such as Capital One or Bank of America) and runs on a specific card network (like Visa or Mastercard). And in the case of Discover and American Express, the issuer and network may be the same company, but they serve very different functions. There are even more parties involved for co-branded credit cards, which require a partnership between the issuer and another company, like an airline or retail brand.
Credit Card Issuer
Your credit card issuer (or credit card company) is the bank or financial institution that issues the card and provides financial backing. These may be large national banks like Chase or smaller community banks and credit unions. Issuers determine a card’s rewards, benefits, rates, and fees, all of which will vary depending on the specific bank and card.
Your credit card issuer is the bank which approves your card application, sets your credit limit and interest rate, and settles any fraud or payment issues you may have. Each month, you’ll also pay your credit card bill to the issuer.
Credit Card Network
Credit card networks process your card transactions and facilitate payment between credit card issuers and merchants. Credit card networks also determine interchange fees, which merchants pay each time a customer makes a purchase using a credit card.
There are four major credit card networks in the United States: Visa, Mastercard, American Express, and Discover. Cards on Visa or Mastercard’s network are issued by other banks (such as Citi or Chase), while American Express and Discover act as both card networks and credit card issuers.
Co-Branded Credit Cards
Credit card issuers often partner with travel and retail brands to issue co-branded cards geared toward frequent customers. You’ll typically find co-branded options for airlines (like Citi’s AAdvantage MileUp Card) or hotel chains (like the Hilton Honors American Express Card) among an issuer’s card portfolio. These cards are issued by a credit card company and backed by a card network, so you can use them anywhere, but may be most valuable for purchases you make with the partner brand.
Retail credit cards are a form of co-branded cards as well. Some, like the Amazon Prime Rewards Visa Signature or Target REDCard work like general rewards credit cards. You can use these cards anywhere, but you’ll receive special discounts and rewards with the co-branded retail partner. These differ from more restrictive closed-loop store cards, which may only be used with the partner retailer.
Should I Get a Credit Card?
A credit card is a great financial tool for building credit and saving money, but opening a new credit card is also a big responsibility. Whether you’re deciding on a credit card for the first time, or adding a new card to your rotation, it’s good to make sure the time is right. Here are a few questions that can help you decide whether you should get a credit card:
- Do you have bad credit? Bad credit isn’t necessarily a reason not to get a credit card. But if your credit is poor because of past mistakes or negative payments, make sure you’ve addressed those concerns before opening a new line of credit. When you are ready to begin rebuilding your credit, or build credit for the first time, a credit card for people with bad credit or no credit history can be a great help.
- Do you have good credit? Alternatively, if you’ve taken time to build your credit score and you’re ready to upgrade to a high-value rewards credit card (or add another card to your wallet), choose a card that aligns with your spending to help you save money on everyday purchases and more.
- Do you have any high-interest debts? If you have high-interest debt balances, it’s not a good idea to take on another credit card you’ll use to increase your debt. But a balance transfer credit card with a 0% introductory interest rate could help you eliminate your debt without accruing more interest.
- Have you applied for a new credit card recently? Too many inquiries on your credit report within a short time period (whether you’re approved or not) can not only have a negative impact on your credit score, but also make you appear more risky to potential lenders.
- Do you plan to apply for a mortgage or loan in the near future? Similarly, you should wait to get a new credit card if you’re planning to apply for a mortgage or other long-term loan anytime soon. Hard inquiries only have a small effect on your credit, but you’ll want to apply with the highest credit score you can to secure the best possible terms on long-term loans. Even tenths of difference in a mortgage interest rate can have a big effect on how much you pay over a 15- or 30-year term.
Are you financially secure? Perhaps the most important thing to consider before opening a credit card is your ability to pay your balance in full and on time each month. If you’re facing income loss or financial hardship, using a credit card to make purchases you can’t afford should be a last resort. Revolving a credit card balance with an interest rate of 15%, 20%, or higher can quickly lead to long-term, lasting debt.
How the Application Process Works
- Check your credit report and credit score: Once you’ve determined the card you’d like to apply for, view your credit score to ensure you have solid chances of approval. Also check your credit report for any errors before applying; you can check your own report for free using AnnualCreditReport.com.
- Apply: You can complete your card application online. Make sure you have all the relevant information you may need, including your address, Social Security number, and current income.
- Review: If you’re approved, some issuers may allow you to begin using your new card online immediately, or wait until the card itself arrives by mail. If your application is rejected, consider the reasons for your denial. Have you applied for too many cards within a short time? Is your credit not quite where it should be for approval? Take time to build your credit score and practice paying your bills and other debts in full and on time before submitting a new application.
*All information about the Capital One Spark Cash Plus and U.S. Bank Visa Platinum Card has been collected independently by NextAdvisor and has not been reviewed by the issuer.
For rates and fees of the Blue Cash Preferred Card from American Express, click here.
For rates and fees of the American Express Business Gold Card, click here
Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by Amex Assurance Company.
Frequently Asked Questions
What is the easiest card to get approved for?
If you have little or no credit history, or a poor credit score, you may find the best chances of approval with a secured credit card. These cards require an upfront cash security deposit upon approval, which usually acts as your credit limit. While they typically offer few rewards and high fees, secured cards can be a useful tool for establishing credit.
How many credit cards should you have?
The number of credit cards you have will depend on your spending, preferred rewards, and your responsibility when it comes to using your cards. Over time, you may accumulate more than one credit card to use for different purposes, or you may rely on single card for the majority of your spending. If you are looking to take on multiple credit cards, make sure you can keep up with each card’s payments and don’t apply for more than one in a short time period, as it could have a negative (but temporary) impact on your credit score.
What’s the difference between Visa and Mastercard?
Visa and Mastercard are both credit card networks. They facilitate payments between merchants and the banks that issue credit cards. Visa and Mastercard credit cards are accepted by most merchants worldwide, and whether your card is one or the other won’t make much difference. Instead, look for your card’s issuing bank (such as Chase or Wells Fargo) for card details and fees that may affect your card use.
What is the best credit card company?
The best credit card company for you depends on what type of card you need and details like interest rate and fees that can impact your card usage. Discover tends to appeal to new credit users, for example, while American Express is popular among people who spend a lot of money on their cards. When choosing a new credit card, look into issuer-specific features like security measures, payment details, account access, and more before making your decision.
How do you qualify for a credit card?
Credit card issuers determine whether you qualify for a credit card based on your creditworthiness, or the details in your credit report and card application. Each credit card company is different, but you can increase your chances of qualifying by practicing good credit habits, building a positive payment history, and establishing an income you can include on your application.
Before applying, get a better sense of your qualification odds by comparing your credit score to the card’s recommended credit range and looking into prequalification offers.
How does credit card interest work?
When you’re approved for a card, your issuer will assign a variable annual percentage rate (APR). But interest compounds daily on any balances you carry on a credit card after the due date.
Consider a 16% variable APR on a $1,000 balance. The first day, you’ll accrue .044% in daily interest, increasing your balance to $1,000.44. The second day, daily interest compounds again, so your new total balance rises to $1,000.88, and so on. The speed with which interest compounds on credit cards is one of the reasons high-interest credit card debt can be dangerous.
You can avoid credit card interest altogether by charging only what you can afford, and paying your statement balances in full and on time every month.
Does applying for a credit card hurt your credit score?
When you apply for a credit card, your issuer conducts a hard credit check. This inquiry can cause your credit score to drop by a few points, but only temporarily. Once you’re approved, practicing good credit habits like timely payments and keeping a low credit utilization can help you make up that ground.
However, you shouldn’t apply for several new credit cards at once. And if your application is denied, avoid applying for another one too quickly. One new card application will have minimal negative impact on your score, but many hard credit inquiries can have a larger negative effect.
Methodology
To determine our best credit card picks, we evaluate credit cards within popular card categories. Our criteria includes details specific to each category (redemption value for travel cards, for example, or credit requirements for beginner credit cards) along with standard details across cards — rewards earned, welcome bonus, annual fee, introductory offer, interest rate, and more. Most importantly, each of the cards on our list delivers on its marketed purpose, whether that’s great travel rewards, business savings, or everyday value. We believe the cards on this list offer a mix of high rewards value, simplicity, and relevance for the broadest range of consumers.
