The 10 Best Credit Cards for October 2019
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When it comes to recommending the best rewards cards available, merely publishing a list is not indicative of our Upgraded Points style. We know that the more information you have, the easier it can be make an educated decision on the best possible rewards cards for your own situation.
We’re ready to provide all that fundamental card information of course, but we’d also like to step it up a notch and provide a broader view of our featured cards.
That’s why our collection of recommended rewards cards has all have the essential information on earning rewards, redeeming those rewards, and benefits that come with each card, but we’ve added more.
We’ll tell you why we like the card, describe the attributes of a typical cardholder, and then throw in a good value redemption example that might expand your travel imagination as to what is possible.
Table of contents
- Best Rewards Cards for Beginners
- Best Premium Rewards Cards
- Best Rewards Card for Everyday Spending
- Best Business Credit Cards for Travelers
- Best Small Business Rewards Credit Cards
- Deciding Which Card Is Best
- Full List of Recommended Credit Cards
- The Basics of Credit Cards
- Applying for a Card
- Using Your Card
- Paying and Monitoring Your Bill
- Earning Credit Card Rewards (and Using Them)
- Final Thoughts
Table of Contents
- Best Rewards Cards for Beginners
- Best Premium Rewards Cards
- Best Rewards Card for Everyday Spending
- Best Business Credit Cards for Travelers
- Best Small Business Rewards Credit Cards
- Deciding Which Card Is Best
- Full List of Recommended Credit Cards
- The Basics of Credit Cards
- Applying for a Card
- Using Your Card
- Paying and Monitoring Your Bill
- Earning Credit Card Rewards (and Using Them)
- Final Thoughts
Best Rewards Cards for Beginners
Chase Sapphire Preferred® Card
We frequently recommend the Sapphire Preferred as a first choice for a rewards card when you’re just starting out.
You’ll find accelerated earnings on travel and dining, flexible redemption options for maximizing the rewards you earn, and a suite of travel benefits you’d normally find on high-annual-fee premium cards.
| Credit Card | Benefits & Info |
|---|---|
Chase Sapphire Preferred® Card How We Get $1k+ Value From Just 60k Pts > |
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Must-Reads:
- Is the Chase Sapphire Preferred Really Worth It?
- Most Valuable Benefits of the Sapphire Preferred
- Chase Sapphire Preferred Review
Top Reasons to Get the Sapphire Preferred:
- A welcome bonus worth hundreds of dollars when redeemed for travel
- 2x earnings on travel and dining
- Travel and shopping protections you can use immediately
Why We Recommend the Card for Beginners
Developing a financial relationship with a leading financial institution such as Chase early on will reap benefits in the long run.
The ease of earning Chase Ultimate Rewards and their flexible redemption options make Chase Ultimate Rewards one of the most valuable rewards currencies available.
The card provides a foundation of travel/shopping protections and benefits you won’t find on many cards. You’ll receive complimentary primary car rental insurance, trip cancellation and trip interruption coverage, baggage insurance, trip delay coverage, extended warranty, purchase protection, and much more.
The Perfect Cardholder
The frequent traveler who wants a rewards card with elevated earnings on travel and dining and travel protections they can use might find the Chase Sapphire Preferred a good match.
The perfect cardholder may also prefer a card that comes with a lower annual fee than premium rewards cards. Lounge access and luxury travel benefits are not important to the ideal cardholder but being able to redeem points for travel and receive good value is one of their priorities.
Good Value Redemption Option
Fly from the U.S. to Africa round trip in business class for just 50,000 miles on South African Airways. Transfer Ultimate Rewards points to Virgin Atlantic (1:1 ratio) and redeem Flying Club miles for your flight from Washington D.C. to Senegal.
This is just one of the many ways you can redeem your Ultimate Rewards for great value.
Capital One® Venture® Rewards Credit Card
The simplicity of its earning structure and the ease of redeeming rewards makes the Venture Card a worthy choice for the beginner seeking a solid rewards earning card.
| Credit Card | Benefits & Info |
|---|---|
Capital One® Venture® Rewards Credit Card |
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Must-Reads:
- Venture Rewards Card Review
- 18 FAQ’s About the Venture Card
- Most Valuable Benefits of the Venture Card
Top Reasons to Get the Venture Card:
- The $95 annual fee is waived the first year
- Purchases at Hotels.com/venture currently earn 10x miles per dollar spent (set to expire January, 2020)
- You can earn free nights on Hotels.com
- Every purchase earns double miles
Why We Like the Card for Beginners
We like that the annual fee is waived the first year, giving you an opportunity to try the card on for size and see if it’s a fit. There are also no complicated earning structures with the Capital One Venture Card — you’ll simply receive unlimited 2x earnings on every purchase you make.
In addition, hotel nights booked on Hotels.com/venture earn 10x Capital One miles and count towards Hotels.com rewards. Book and stay 10 nights and receive a free night certificate, with no limit on free nights earned.
When it comes time to redeem your miles for travel, your options are many. Transfer your miles to airline partners, redeem for travel, or use your miles to erase previous travel purchases with Capital One Purchase Eraser.
The Perfect Cardholder
The traveler who spends a lot on Hotels.com or anyone wanting simple elevated earnings on every purchase, could find the card a fit.
Capital One miles are also easy to redeem or to transfer to other Capital One accounts, making it a good card for families and friends to combine miles.
Good Value Redemption Option
Normally Capital One miles are worth 1 cent each when redeemed for travel on the Capital One Rewards Center. However, you can receive greater value by transferring your Capital One miles to airline partners.
For example, you can fly From Tokyo to Hong Kong in business class on ANA by transferring 30,000 Capital One miles to ANA LifeMiles. This is just one of the many ways you can get maximum value for your Capital One miles.
Best Premium Rewards Cards
The Platinum Card® from American Express
Proclaimed as one of the best rewards cards in the marketplace, the Platinum Card hits a home run with its luxury travel perks, multiple times earning on airfare and hotels, airline statement credits, and its flexible redemption options.
| Credit Card | Benefits & Info |
|---|---|
The Platinum Card® from American Express |
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Must-Reads:
- Is The Amex Platinum Really Worth $550 Per Year?
- 14 Things to Do When You Get The Amex Platinum
- Most Valuable of Benefits & Perks of The Amex Platinum
Top Reasons to Get the Amex Platinum:
- You might be eligible for a 100,000 welcome bonus with the Platinum Card.
- The card has a long list of luxury travel benefits such as worldwide lounge access and hotel/car rental elite status
- Earn 5x Membership Rewards points on flights and prepaid hotels booked on Amex Travel
- $200 airline fee and $200 Uber statement credits
Why We Like the Card
We like the luxury travel perks that come with the card such as the ability to hang out at prestigious Centurion lounges, bring guests, and access nearly 1,200 additional worldwide airport lounge properties.
Having complimentary hotel elite status, earning rebates on premium ticket purchases, and receiving statement credits for Uber, Saks Fifth Avenue, and Global Entry all add value to having the card.
The Perfect Cardholder
The frequent business traveler who spends a lot on airfare, values premium travel benefits such as lounge access, hotel elite status, and travel statement credits will benefit most from having the card.
Anyone currently paying for an annual airport lounge membership will also find the card an excellent value proposition.
Good Value Redemption Option
You can book an enjoyable business class experience for less than 30,000 Membership Rewards points when you transfer points to Etihad Guest Miles and book a business class flight from Prague to Seoul, South Korea on Czech Airlines. That’s over 10 hours in business class for just 30,000 points!
To learn more about how to redeem Membership Rewards for maximum value, you’ll want to reference our in-depth guide.
Chase Sapphire Reserve®
Chase’s premium travel rewards card offers a nice collection of travel benefits, bonus level earnings on the purchases that travelers make most, and redemption options that deliver exceptional value when using your rewards for travel.
| Credit Card | Benefits & Info |
|---|---|
Chase Sapphire Reserve® |
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Must-Reads:
- Which Airports Can I Access With the Sapphire Reserve?
- Chase Sapphire Reserve vs The Amex Platinum
- Most Valuable Benefits of The Sapphire Reserve
Top Reasons to Get the Sapphire Reserve:
- A welcome bonus worth at least hundreds of dollars in travel
- 3x earnings on travel and dining helps points add up quickly
- Complimentary Priority Pass Select membership with worldwide lounge access
- $300 in travel statement credits each card anniversary year
- A premium package of travel insurance protections and benefits
Why We Like the Card
We like that the card has unlimited complimentary access for the cardholder plus 2 guests to over 1,200 Priority Pass lounges worldwide. Authorized users also have full Priority Pass Select membership benefits.
Additionally, the $300 travel statement credit that comes with the card can be used for any travel purchase not just airline incidental fees like other travel rewards cards.
We also appreciate the added value you receive when redeeming Ultimate Rewards for travel. Points redeemed via the Ultimate Rewards travel portal are worth 50% more plus there’s the additional option of transferring points to airline and hotel partners.
The package of travel protections and benefits offered with the Sapphire Reserve are genuinely impressive. Having primary car rental insurance, trip cancellation, interruption, and delay coverage, lost/delayed baggage insurance, and emergency evacuation coverage are just some of the useful travel benefits you’ll find complimentary on the card.
The Perfect Cardholder
The frequent traveler who is currently paying for annual lounge membership or wants to add airport lounge access to their travels will realize significant savings by having the card. Annual lounge membership for a family can cost $1,000 or more.
Those who spend a lot on travel and dining will also find value with the card due to bonus category earnings for those purchases.
Good Value Redemption Option
Flying in Avianca Veula’s business class to South America from the U.S. is a great use of Chase Ultimate Rewards. Transfer points to United Airlines at a ratio of 1:1 and book your flights on Avianca using just 70,000 MileagePlus miles for a round-trip journey.
For more ideas on the best use of your Ultimate Rewards points, we’ve put together a great list of options in one comprehensive article.
Best Rewards Card for Everyday Spending
American Express® Gold Card
Perhaps your spending habits are more of the everyday variety. If so, you’ll find the Amex Gold Card with its bonus-level earnings on U.S. supermarkets and world-wide restaurant purchases an expeditious way to earn lots of rewards.
You’ll still earn big on travel purchases and when it comes redemption time, there are plenty of options to pay for your trip with rewards points.
| AMEX CARD | BENEFITS & INFO |
|---|---|
American Express® Gold Card |
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Must-Reads:
- Is the Amex Gold Card Really Worth It?
- How to Find the 50,000 Welcome Offer for the Amex Gold
- The Amex Gold vs the Chase Sapphire Preferred
- Most Valuable Benefits of the Amex Gold Card
Top Reasons to Get the Amex Gold:
- A welcome bonus worth hundreds of dollars in travel
- Earning 4x Membership Rewards points on dining and supermarket purchases
- Earning 3x on flights purchased directly from the airline and select travel purchases through Amex Travel
- Redeem rewards through Amex Travel or receive even greater value when transferring to airline partners
Why We Like the Card
The Amex Gold Card strikes a balance between functioning as a travel rewards card and earning as an everyday spending card. You’re earning elevated rewards on restaurants worldwide, at U.S. supermarkets (up to $25,000 in purchases each anniversary year), plus flights with the airlines and select Amex Travel purchases. When it comes time to redeem your rewards you have several flexible options including transferring your points to travel partners.
The card also earns its keep with travel statement credits for airline incidentals, Global Entry/TSA PreCheck, and monthly dining credits.
The Perfect Cardholder
Anyone who spends a lot at supermarkets, dining out, and on travel, could find the Amex Gold Card a potential fit. Everyday expenses will be earning rewards that can easily be redeemed for that annual vacation or a special getaway weekend.
Good Value Redemption Option
You can book United Polaris transcontinental business class for just 25,000 Avianca LifeMiles after transferring your Membership Rewards points. Plan a special weekend getaway for two and spend just 100,000 miles total for round-trip tickets from Newark (EWR) to San Francisco (SFO) or Los Angeles (LAX).
Best Business Credit Cards for Travelers
Chase Ink Business Preferred℠ Credit Card
Just like the personal version of the card, the Ink Business Preferred card offers tremendous value. It’s an earning powerhouse for business purchases and it delivers elevated value when it’s time to redeem your rewards.
The card is also packed with shopping protections to cover qualifying business purchases and travel protections along with other benefits that most businesses involving travel can use.
| CHASE CARD | BENEFITS & INFO |
|---|---|
Ink Business Preferred℠ Credit Card |
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Must-Reads:
- Is the Ink Business Preferred Really Worth It?
- Ink Business Preferred review
- Chase Ink Business Credit Cards – Bonus Categories, Features & Fees
Top Reasons to Get the Ink Business Preferred:
- A current welcome bonus worth $1,000 towards travel
- 3x earnings on common business purchases and travel ($150,000 combined limit per anniversary year)
- A premium package of travel protections and benefits
- 25% more value when redeeming rewards for travel
- Shopping protections and cell phone coverage
Why We Like the Card
We like that this card functions as a powerful business credit card without the high annual fee. The earning categories alone recognize the most common purchases businesses make allowing rewards to add up quickly.
Businesses that have high travel expenses will appreciate the 25% additional value when redeeming Ultimate Rewards points for travel.
We also like the package of travel and shopping protections that comes with the card, especially primary car rental insurance, trip cancellation/interruption coverage, and $600 in cell phone protection.
The Perfect Cardholder
The business owner who is spending $150,000 combined on travel, advertising, shipping, internet, cable, and phone services will maximize the earnings on the card.
Businesses who have high travel expenses will also benefit from having the card as rewards could be redeemed to offset business travel expenses (or used for personal travel).
The ideal cardholder may also find value with additional reward redemption flexibility offering choices such as cash-back, gift cards, and using rewards for Apple purchases.
Good Value Redemption Option
Non-stop first class flights on ANA can be booked for as little as 110,000 Flying Club miles round-trip from major U.S. hubs to Tokyo, Japan. Transfer Ultimate Rewards points to Virgin Atlantic and use Flying Club miles to book with ANA.
The Business Platinum® Card from American Express
With a reputation of being one of the best business rewards card available, the Amex Business Platinum card stands out as a card delivering tremendous value for the business traveler.
| Credit Card | Card Overview |
|---|---|
The Business Platinum Card® from American Express |
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Must-Reads:
- The Amex Business Platinum vs The Amex Platinum Card
- Most Valuable Benefits of the Business Platinum
- The Business Platinum Review
Top Reasons to Get the Business Platinum:
- Welcome bonus worth at least hundreds of dollars in travel
- Worldwide airport lounge access to over 1,200 properties including the prestigious Centurion Lounges
- 5x earnings on flights and pre-paid hotels via Amex Travel
- $200 airline fee credit
- Hotel and car rental program elite status
- 35% rebate on flights purchased from your pre-selected airline or premium cabin airfare booked through American Express Travel
Why We Like the Card
While welcome bonuses fluctuate, this card has been known to offer bonuses that exceed $1,000 in value. Watch for those offers! This card also comes with fantastic benefits.
The excellent 5x earnings on flights and prepaid hotels via Amex Travel plus a 35% rebate on premium cabin airfare or your pre-selected airline, make the card a fine choice for the business with high airfare expenses.
This card comes with better earnings for large purchases of $5,000 or more. Instead of the common 1x earnings offered on most travel rewards cards for non-bonus spending, the Amex Business Platinum card earns 1.5% for these larger transactions.
The lounge access benefit of the Amex Business Platinum card is best in class for a travel rewards card, allowing access for the cardholder and 2 guests to over 1,200 lounges worldwide. In addition, authorized users receive the same cardholder plus 2 guests access.
The Perfect Cardholder
The ideal business cardholder is making large purchases, spending a lot on airline and hotel expenses, and values the benefits of luxury travel perks.
Your business might also be spending money currently on annual lounge memberships for key employees. There may be immediate savings realized by utilizing the complimentary lounge access.
Good Value Redemption Option
Why fly economy or business class when you can fly round-trip in first class for just 80,000 miles? Transfer Membership Rewards points to Cathay Pacific and use Asia Miles to book a New York to Vancouver first class experience.
Best Small Business Rewards Credit Cards
American Express Business Gold® Card
The Amex Business Gold card doesn’t come with a long list of luxury benefits such as lounge access, hotel elite status, or rebates on high-end retail purchases.
The card does focus on what matters most to your small business. And while the card isn’t perfect for every business, those businesses that can use its featured benefits and have expenses that align with the card’s bonus earning categories will find value by having the card.
| CREDIT CARD | BENEFITS |
|---|---|
American Express® Business Gold Card |
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Must-Reads:
Top Reasons to Get the Amex Business Gold:
- 4x earnings automatically on 2 highest qualifying spending categories each statement period (up to $150,000 in purchases per year)
- 2x earnings on qualifying travel purchased through Amex Travel
Why We Like the Card
The card may be a perfect fit for the small business due to its 4x earnings on common business purchases. The option to pay your statement balance over time could also be useful for small businesses just starting out.
The card offers 4x earnings on the 2 highest expenses your business makes in qualifying categories each statement period. Categories include:
- Airfare purchased from airlines directly
- Online, TV, and radio advertising purchased from U.S. media
- Select U.S. technology purchases of computer hardware, software, and cloud solutions
- Purchases at U.S. gas stations, U.S. restaurants, or U.S. shipping
Receiving 25% rebates on airfare and having the flexibility to transfer points to airline partners, means you have the option to offset those business travel expenses or easily fund a family vacation.
The Perfect Cardholder
The perfect cardholder may also be a small business owner who has little time to worry about complicated earning structures. Your highest qualifying expenses each statement period will automatically receive elevated 4x bonus earnings. There’s no need to pre-select bonus categories.
Good Value Redemption Option
Ever wanted to venture off to Hawaii but thought it was way too expensive? Transferring your Membership Rewards points to Air France’s Flying Blue program will allow you to book a round-trip economy ticket from the U.S. to Hawaii for just 30,000 Flying Blue miles.
Chase Ink Business Cash℠ Credit Card
The Ink Business Cash card supports your small business operation by concentrating on the cost savings of no annual fee and 0% APR option. Additionally, it earns rewards in the form of valuable Ultimate Rewards points that can be redeemed for cash-back and invested back into your business.
And while cost savings are prevalent with the card, it has good earning potential, plenty of redemption choices, and even travel benefits.
| CREDIT CARD | BENEFITS & INFO |
|---|---|
Ink Business Cash℠ Credit Card |
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Must-Reads:
- Most Valuable Benefits of the Ink Cash
- A Review of the Ink Cash Credit Card
- The Ink Cash vs the Ink Business Preferred
Top Reasons to Get the Ink Cash:
- A welcome bonus worth hundreds of dollars
- $0 annual fee
- 0% APR on purchases for 12 months; after that 15.24% – 21.24% variable
- 5% and 2% bonus earning categories for business purchases
- Travel and purchase protections and benefits
Why We Like the Card
We like the bonus earning levels of 5% cash-back on common small business expenses and 2% cash back on travel and dining. For businesses starting out, having a card with no annual fee is a positive as well as the potential cost savings of utilizing the 12 month 0% APR period for large purchases.
We also like that the card earns Ultimate Rewards points that can be redeemed for cash-back but can also be transferred to premium Chase cards and redeemed for greater value (up to 50% more) on travel or transferred to travel partners.
The card also comes with travel and shopping protections such as primary car rental insurance, travel emergency assistance services, roadside dispatch, purchase protection, and extended warranty.
The Perfect Cardholder
The perfect cardholder is a small business owner who will maximize the 5% cash-back earning categories by spending $25,000 per year on a combination of office supplies, internet/cable/phone services. Since gas station and dining purchases earn 2% cash-back, the business that spends $25,000 in these categories will also maximize earnings with the card.
Business owners who have a large purchase they want to repay over time without incurring interest charges can save plenty by having the card and using the 0% APR offer. The introductory 0% APR period on purchases is good for 12 months once you’re approved for the card.
Good Value Redemption Option
Planning time away as a small business owner can be challenging and expensive but you don’t have to break the bank when you’re using Ultimate Rewards points to book your travel.
You’ll need a premium Chase card such as the Chase Sapphire Preferred or Chase Sapphire Reserve to transfer your points from your Ink Business Cash card. Then you can transfer your points to airline partners to book award tickets.
Transferring Ultimate Rewards points to United Airlines allows you to book round-trip economy saver level tickets to Alaska for just 35,000 miles or flights within the lower 48 states for just 25,000 miles.
Deciding Which Card Is Best
While we’re not able to give you all the details pertaining to each recommended rewards card here, we hope our summaries have helped you understand the cards’ key attributes and spark your interest to learn more.
You’ll want to check out our in-depth reviews for cards in which you’re interested, read the associated pricing disclosures, and understand any card issuer requirements. For Chase cards, for example, you’ll want to reference the Chase 5/24 rule before applying. If you’re applying for a business card, you can learn more about the business card application process.
Also check out our recommendations for the best business credit cards and the best credit cards for travelers.
Full List of Recommended Credit Cards
The Basics of Credit Cards
From picking a card, to paying for your items, to earning valuable rewards, let’s get back to basics and talk you through just how credit cards work step by step.
At a high level, each time you use your credit card, you are borrowing money from your card issuer to pay for something. Your transactions are added together and at the end of each month, you must repay what you borrowed. If you take extra time to pay it back, you’ll be charged interest.
While all credit cards work generally the same way, there are also other features that are unique to each card. We’re going to break down all of the things you should look for when choosing your next card.
Picking a Card
There are a lot of choices to make when it comes to credit cards. It’s important to know what all of the features of a card are in order to choose a card that is best for you and your spending habits.
Considering a debit card as well? Check out some of the pros and cons of debit vs. credit cards.
1. Check Your Credit
The first step to getting a credit card is knowing what cards you are eligible for. This requires knowing your credit score, a 3-digit number lenders use to help them decide how likely it is they’ll be repaid on time. Learn more about credit scores and why they are important!
Everyone is entitled to 1 free credit report every year from each of the 3 big credit bureaus: Equifax, Experian, and TransUnion. You can get this report by going to annualcreditreport.com. Many banks also offer free credit monitoring as well.
If you have a high credit score, congrats! You will likely be approved for any card you could want — think low-interest rates, cash-back or rewards points, travel insurance, or reimbursement for TSA PreCheck or Global Entry!
Bottom Line: At a basic level, the higher your credit score, the more likely you are to qualify for the cards with the best benefits.
If you’re still building (or rebuilding) your credit, you’ll want to look for a card that is specifically meant for this. These cards may require a deposit (known as secured cards) or come with high fees, low credit limits, or high-interest rates to offset a lender’s risk.
Here are the credit score ranges to determine exactly what your score means:
2. Decide on Card Type
The next important step is to decide on the type of card you want.
Credit card companies offer different kinds of cards to meet their consumers’ needs. For example, some people choose to put all of their monthly expenses on their card and pay it off in full each month. Those people benefit from a card that returns a portion of their spending in the form of cash-back or travel rewards.
Others tend to make minimum payments and carry a balance from month to month. These people benefit from a card that offers a low ongoing interest rate. Still, others are working to build their credit, and cards with lower credit limits are designed for those people.
For this reason, there are a few key decisions to make, so we’re going to give you all of the information so you can decide which is best for you.
Issuer
Like we discussed above, each time you make a purchase on your credit card, you’re borrowing money from a company, and when you make a payment on your balance, you’re paying them back. This company is known as the issuer.
The issuer is the lender that maintains your account from start to finish. You may know the big names like Chase, Capital One, or Wells Fargo, but credit cards are issued by smaller local banks or credit unions as well.
First, the company reviews your credit card application and decides whether you qualify for the card. Next, it will set your interest rate and account fees. At the end of each billing cycle, it will send your statement. You make payments for your purchases directly to the issuer.
Bottom Line: There isn’t 1 issuer that is “better” than others. Most credit card issuers rank high in terms of customer satisfaction, so the best one is the one that offers you the card that works best for you.
Many of the rewards benefits come directly from the issuer. Things like cash-back, rewards per-dollar-spent, and statement credits are typically given by the card issuer.
Network
The payment network is responsible for processing the credit card transactions. Visa, Mastercard, American Express, and Discover are some of these payment networks. The network will report each transaction to the issuer so that the issuer can both pay the merchant and add the transaction to your outstanding balance.
Hot Tip: American Express and Discover are slightly different because they are both the issuer and the network, so they will approve the transactions themselves. This is why they charge higher fees!
The network determines where you can use your card. You’ll often see signs at retailers noting which cards are accepted and this refers to the network. Most retailers accept Visa and Mastercard, with only a couple of exceptions (such as Costco), while many choose to not accept Discover or American Express.
Network-provided benefits tend to be protections and perks, like travel insurance and rental car coverage. It’s important to note that just because a network has perks on some cards, it’s not guaranteed. It is up to the issuer to decide which benefits each card will have.
Co-Brand Partner
Unlike the issuer and network, not all credit cards have co-brand partners. The partner is an airline, hotel, or store whose name appears on the card.
The co-brand partner is responsible for managing the loyalty programs and associated rewards earned on the card. The partner also provides additional perks to cardholders, such as free checked bags for an airline card, automatic room upgrades for a hotel card, or extra discounts for a store card.
This is not the same as transfer partners. For example, Chase Ultimate Rewards transfer to a variety of hotel and airline partners, but these partners are not directly listed on the card and aren’t considered co-brand partners.
Categories of Credit Cards
Every credit card delivers value through its own unique combination of features. Unfortunately, you’re unlikely to find a single card that offers a high rewards rate, a long 0% APR period, a low ongoing interest rate, generous perks, and no annual fee.
You will have to decide which offers the most value for you, so here are the major categories of credit cards and some of the benefits they provide.
Rewards Credit Cards
These cards return a portion of your spending in the form of cash-back, points, or miles. Due to the nature of the card, many of these are co-branded cards.
General travel credit cards (like Chase Ultimate Rewards or Citi ThankYou Points) give you points that you can use to book travel. These cards offer tons of flexibility because they are not tied to specific airline or hotel loyalty programs. Depending on the card, it may also offer Priority Pass access, reimbursement for Global Entry, and other travel perks.
Airline credit cards carry the name of a specific airline. Spending on these cards will earn miles that you can redeem for free flights or upgrades on that airline. If you typically fly with 1 airline, this would be a good option as the card usually offers things like free checked bags, priority boarding, airport lounge access, and more.
Hotel credit cards carry the name of a specific hotel group. Spending on these cards will earn points that you can redeem for hotel stays. If you are loyal to a certain hotel chain, this would be a good option as it offers things like a free night’s stay every year, automatic upgrades, elite status, and more.
Cash-back credit cards give you a percentage cash-back on your spending. This can be used to reduce your balance or even be deposited directly into your bank account.
Bottom Line: There are a lot of options when it comes to rewards credit cards. Be sure to look at all of the fees and perks to make sure you’re picking the card that will the best work for you.
0% or Low-Interest Credit Cards
Cards offering 0% APR to new cardholders for a year or more of 0% interest on purchases, making them suitable for a big expense (like furniture or appliances). If you don’t make your monthly minimum payment by the due date on your statement each month, it’s possible to lose the introductory purchase APR.
Low-interest cards have a low ongoing rate that makes them a good long-term option. Both of these cards are good for spenders who typically carry debt from month to month.
Different from the 0% interest cards above, these balance transfer cards allow you to move debt from a high-interest card onto a new card and then give you a year or more at 0% interest to pay that debt off.
You’ll often pay a 3-5% fee for the transfer, but depending on the balance, the interest savings can still be worth it.
These cards are designed for small-business owners. Their rewards and perks are tailored toward businesses, and they offer extra rewards that businesses typically pay for like internet, office supplies, advertising or shipping purchases.
Since you would be the one making the payments, the issuer looks at your personal credit history when deciding if you qualify.
Credit Cards for Building Credit
Banks have designed cards specifically for people working to improve their credit. Getting one of these cards and using it responsibly can go a long way toward your goals.
The best credit cards for bad credit are secured cards, which require you to put down a cash deposit (which is refunded to you if you upgrade or close the card in good standing). There are “unsecured” cards for bad credit that don’t require a deposit, but they tend to charge high fees.
If you’re building credit, you can also be added as an “authorized user” on someone else’s card. This basically means that someone else is vouching for you (like co-signing on a loan), and it can be a great way to rebuild credit.
Hot Tip: The Capital One® Platinum MasterCard is an excellent option for those that want to build their credit, and also comes with a number of benefits which is a real bonus for a card that has no annual fee.
Store Credit Cards
Synchrony and Comenity are typically the banks behind retail stores. These cards may offer discounts at the retailer when you use the card. These are typically the easiest cards to qualify for but come with high-interest rates and low credit limits. They may also come with discounts when you spend with the retailer.
3. Look at Fees and Other Benefits
Now that you’ve selected the general category of card that works best for you, it’s important to look at the fees and other benefits associated with potential cards. Each card will come with its own set of fees and benefits, so be sure to read the fine print.
First up, let’s look at some of the common fees that you might pay with your credit card.
Annual Fee
This is a fee you pay annually for the privilege of carrying a credit card. Annual fees are common on travel reward credit cards, which tend to offer higher signup bonuses and bigger rewards than other credit cards.
To decide whether a card is a good investment, you’ll have to do the math. Based on your spending, would you earn enough in rewards each year for the fee to make sense? In addition, do those other perks like travel credits and lounge access add enough value to you to outweigh the annual fee?
Finance Charge
A finance charge is just the interest that accrues on the balance you carry on your credit card. If you pay your balance in full each month, you’ll never pay a penny in interest.
There are a few ways that interest fees can be charged, but the daily average balance is the primary one. Credit card companies will average your balance for every day of the month, then multiply that by the daily rate and the number of days in the billing cycle to determine your interest owed.
Please refer to our complete guide on credit card interest for an in-depth look at this.
Balance Transfer Fee
A balance transfer fee is charged when you move debt from 1 credit card to another. After that, the typical fee is 3% to 5% of the amount transferred. Depending on the circumstances, some cards don’t charge a fee for balance transfers.
Many cards offer an introductory rate of 0% interest on balance transfers for a year or more, but you have to decide whether the interest savings will make up for the transfer fee.
Cash Advance Fee
When you use your credit card to take out cash (at an ATM or bank), you will be charged a cash advance fee of 2-5% of the amount borrowed. In addition, you’ll usually start accruing interest on this cash advance (and at a higher rate than your normal interest rate).
Bottom Line: Avoid taking out cash with your credit card if possible otherwise you’ll be charged a cash advance fee.
Foreign Transaction Fee
This fee is a charge of 1-3% added onto purchases made outside the U.S. While many cards charge this fee, most travel credit cards don’t have foreign transaction fees.
Fees can be tacked on each time you swipe, so if you travel internationally, this is an important item to look into.
Over-Limit Fee
You can’t overdraft a credit card unless you’ve specifically opted in to over-the-limit coverage with your card issuer. Paying for this fee may help you avoid the embarrassment of transactions being rejected at the register. If you don’t opt-in for this fee, your purchase would simply be declined.
The first time you go over your limit, you will usually be charged a fee of up to $25. After that, the fee can go up to $35 if you go over your limit a second time within 6 months.
Late and Returned Payment Fee
A late payment fee is charged when you don’t make at least the minimum payment by the due date. The exact amount varies by card.
A returned payment fee is charged when an automatic payment out of your bank account or a check you’ve made out is blocked for insufficient funds. This fee will vary by card, but around $35 is common.
Hot Tip: Be sure to also check out our definitive guide to credit card fees and how to avoid them.
Interest Rates
All credit cards charge interest if you carry a balance — that’s just the way they work! The interest that is charged will vary wildly according to the specific card you have qualified for and how long the card has been open.
Introductory Interest Rate
Credit card companies offer people with good credit a low introductory interest rate. Many cards offer 0% on purchases and balance transfers for a year or more. Some cards don’t go as low as 0% but still offer a lower introductory rate.
Ongoing Interest Rate
After the introductory rate expires, you will pay the ongoing interest rate. The rate will vary by card and individual, but in general, the better your credit, the lower your rate. For super-low ongoing rates, your best bet is a credit union.
If you have a card that has a variable interest rate, your rate may change multiple times a year depending on the Federal Reserve. Credit card issuers aren’t required to notify you when your variable rate is going to change, but some do so voluntarily.
Hot Tip: Remember that if you pay your balance in full every month, your interest rate doesn’t actually matter because you’re never charged interest.
Rewards Earned
Lastly, if you’ve decided to look at a card that offers rewards, there are a few more things to consider. Your answer to these questions will be subjective and really depend on how you typically spend money.
- What do you get for every dollar spent (and where do you earn extra)?
- How much do you get for your rewards when it comes time to use them?
- How much flexibility do you have in using your rewards?
While specific rewards vary greatly depending on your card, you should look to see if some of these items are included with your card.
- A sign-up bonus can be cash, points, or miles that you can earn by spending a certain amount of money in your first few months with a card. The bonuses on many travel cards are often big enough to justify the card’s annual fee.
- Cash-back refunds a certain percentage of the purchase price. This might be a variable or flat rate depending on your card.
- Points earn a multiplier of points based on the category of the spend.
- Insurance can include car rental coverage, purchase protection, extended warranties, and cell phone insurance.
- Statement credits are money back for qualified travel expenses, purchases from selected merchants, or the application fee for Global Entry or TSA PreCheck.
- Perks may include extras like lounge access, free checked bags, free upgrades, elite status, or late checkout.
Applying for a Card
By now, you should have decided what card is best for you, so it’s time to apply!
In order to apply for a credit card, you’ll need to fill out a credit card application through a bank, credit union, or another card issuer. You will provide information like basic information like:
- Your name
- Address
- Phone number
- Employment status
- Birthdate
- Social security number
- Annual income
- Other assets
- Rent or mortgage payments
- Other debt payments
The company will review the application and check your credit score to determine eligibility. You may be approved right away, or it may take the credit card issuer a few days to notify you of your approval.
If your application was rejected, be sure to check out our article on credit reconsideration and what to do next. You will typically receive a written explanation for denial within a few weeks.
If you’re approved for a credit card, you’ll sign an agreement that obligates you to pay back any money that you borrow. In addition, the agreement will list important information like annual interest rate, credit limit, balance transfer interest rate, and all other fees associated with the card.
A credit limit is the maximum amount you can borrow at any time. For secured cards, the credit limit is usually the amount of your security deposit. On an unsecured card, the issuer will base your credit line on your income, credit scores, and other factors.
Your interest rate is the price you pay for borrowing money, usually noted as an annual percentage rate (APR). If you don’t repay the loan in full each month, you’ll have to start paying interest at this rate on all of the money you carry on your account from month to month.
Bottom Line: You could have a great credit score but still be rejected if you’ve opened too many cards recently or if your debt or recurring payments (like your rent or mortgage) are determined to be too big in relation to your income.
How Many Credit Cards Should You Have?
There’s technically no limit to how many credit cards you can have, but individual lenders can decide how many they would like to issue you at one time.
Here are some advantages to carrying more than 1 card:
- Maximizing Rewards — One card may pay you a higher rewards rate on groceries. Another may reward you more points at restaurants or for spending on travel. Having multiple cards allows you to plan your spending to get the most out of your rewards.
- Flexibility— Some cards are more widely accepted than others. It’s good to have a backup for cards like American Express or Discover.
- More Available Credit — Ideally, you’ll want to keep utilization below 30% and having more cards can help you with this since each card you have will increase your overall credit limit.
On the negative side, having more cards can make it harder to keep track of your spending and payment due dates. This can lead to an increased risk of interest and other fees and a snowballing of outstanding debt.
Bottom Line: You don’t need to have multiple cards to maintain a good credit score. While credit utilization is important, 1 credit card that is responsibly-managed is enough to build a solid credit history.
Using Your Card
Once you are approved for a card, it might take a week or so to receive the card. Once you receive it, use the information on the card to call the number or go online to activate your card. After this, you’re ready to start using your card!
At a basic level, each transaction will involve the following steps:
- You swipe/insert/tap your card. While the specific technology may vary, you can use your card at the cash register by swiping, tapping, or inserting the card into a card reader. Generally, you must sign on to approve these purchases, although exceptions may be at the gas pump or for other small purchases. If you’re online shopping, you enter all of your card information and submit it electronically.
- The purchase is approved. This machine electronically contacts your credit card company to make sure the card is valid and that the purchase is within your credit limit.
- The merchant gets paid. The merchant requests the money from the bank. The credit card issuer sends money for your purchase to the merchant. This is typically done daily through batch processing.
- You pay back your issuer. On your statement date, all the transactions you made throughout the month will be totaled together. On the due date, you must repay the bank (in part or in full) for the purchase until it is repaid.
- You can continue to use your card until the card’s expiration date. This doesn’t mean that your account closes on that date, but rather that the issuer will send you a new card in the mail (usually with updated technology like an EMV chip).
Hot Tip: Your card’s credit limit determines how high your current balance can be at any given time, so you’ll want to pay attention to how much you’re charging to your card throughout the month to avoid maxing out your card.
Paying and Monitoring Your Bill
At the end of each billing cycle, your card issuer will send you a statement that lists your credit card account balance, statement balance, the individual transactions you made that month, the minimum payment due, any fees incurred, and the due date.
Most credit cards give you an interest-free grace period on purchases. The grace period is the time between the end of your billing cycle and your bill’s due date.
Here’s an example of exactly how that works. Let’s say you make a $100 purchase with your card on January 1, the billing cycle closes on January 24, and your payment due date is February 21. The time between the end of the billing cycle (January 24) and the due date (February 21) would be your grace period. During this time, you won’t accrue any interest if this purchase is paid off in full by the due date.
Paying Your Bill
You’ll need to pay at least part of the balance due, called the minimum payment, each billing cycle. You ideally strive to pay off the entire statement balance by the due date to avoid paying interest on your purchases.
Hot Tip: You can set up auto-pay directly from your checking account to ensure your payments are made timely. This will eliminate late payment fees and reduce the likelihood of accruing interest charges.
Many people choose to do this automatically on the due date so that they don’t have to worry about missing or being late for a payment. In addition, you can always choose to make additional payments throughout the month if you are close to maxing out your credit limit.
Interest Fees
If you only make the minimum payment, you’ll be charged interest on any remaining statement balance at the rate set when you were approved for the card. This can also be called “carrying a balance” on your card as you have a balance from 1 billing period to the next.
This is where many individuals can get into trouble. Those fees start adding up over time and can begin to snowball into a much larger problem. Be sure to read more about credit card interest and how it adds up.
Monitor for Fraudulent Charges
Each month when you receive your statement, you should also check to make sure that all charges on the account are yours.
If you find unauthorized charges on your credit card statement, you should take the following steps:
- Call Your Credit Card Company — As soon as you notice charges you don’t recognize, call your credit card company (or the issuer) using the number on the back of your card. They’ll likely but a stop on your current card, issue you a new card with a new card number, and investigate the charges immediately.
- Change Your Account Passwords — If it’s not clear how your information was obtained, make sure you change your password to your lender’s website just to be safe.
- Notify the Credit Bureaus — If you notice unauthorized charges on more than 1 card or account, be sure to contact the major credit bureaus (Equifax, Experian, and TransUnion) to alert them and request a credit freeze. This can help stop any more accounts being opened under your name.
- Contact the Federal Trade Commission (If Necessary) — If you have encountered fraud on more than 1 account, it could be considered identify theft. This should also be reported to the Federal Trade Commission. They can assist you in developing a plan to prevent further issues.
- Call the Police (If Necessary) — If you notice a pattern of credit card fraud, the police can use your records to open an investigation.
- Monitor Your Statements and Credit Reports — You should keep monitoring your credit card statements for a few months as fraudulent charges can appear for months after the initial occurrence. Your credit report can show if any new fraudulent accounts have been opened under your name.
- Monitor Your Rewards — While the Fair Credit Billing Act limits your liability for unauthorized charges on your credit card, these same protections may not cover credit card rewards points or miles.
- Check Your Online Shopping Sites — Most of us store credit card information with our favorite online shopping stores. It might be a good idea to remove this information or, at the minimum, change your passwords to these websites.
How Credit Card Fraud is Handled
One of the best benefits of using a credit card is the protections you receive in the case of unauthorized purchases. Many credit cards promise zero liability for all fraudulent transactions.
After you report an unauthorized purchase to your credit card issuer, the charge will be removed from your outstanding balance while it is investigated.
Bottom Line: The important thing is that you have lost no money when a fraudulent transaction occurs on your credit card. You won’t have to make a payment for this transaction, so it will never affect your bank account.
Earning Credit Card Rewards (and Using Them)
If you have a card that earns rewards or other benefits, it is important to know how they work to make sure that you’re maximizing the value you’re earning from the card.
Rewards
At a high-level, the rewards process works like this:
- You make a purchase with your credit card.
- The issuer calculates your rewards. If you earn bonus rewards based on the category of your spend, the issuer looks at the category code of the merchant where you made your purchase and then applies bonus rewards as necessary. Otherwise, you will earn rewards based on the flat rate.
- If your card comes with a sign-up bonus, these rewards will typically show up on the next statement you receive following the date when the requirements were met.
- The issuer credits your rewards to your account. This could take anywhere from a few days to a few weeks for the rewards to show up.
- You redeem rewards by logging into your card issuer’s account online.
- Cash-back redemptions are pretty straightforward, but typically require contacting the issuer and requesting a check, a direct deposit into a bank account, or a statement credit.
- Redeeming points or miles might involve booking travel through an online tool or transferring to a travel partner. Transfers could take a few weeks depending on the card/partner, so be sure to plan accordingly.
- You can also redeem points for things like gift cards, merchandise, or rental cars, but typically these offer the worst value and we don’t recommend doing this if possible.
Hot Tip: Cash-back redemptions are seen as non-taxable as opposed to interest earned at the bank which is taxed.
Statement Credits
Statement credits work a little differently. Basically, a credit is the opposite of a payment since you get money credited back to your account instead of borrowing it to pay for a purchase.
Some cards offer cash-back in the form of statement credits. These would be requested by you whenever you have earned enough points. Other cards offer statement credits for certain categories of spend. For example, it’s very common to see travel credit cards offer automatic credits for a Global Entry or TSA PreCheck application fee.
Other cards, like the Chase Sapphire Reserve® card or The Platinum Card® from American Express, offer statement credits for transactions that are categorized as travel. Each card categorizes these expenses differently, so it’s important to read the fine print to determine which purchases will receive credits.
In these cases, you simply make the relevant purchases with the credit card, and then the statement credit should appear on your account.
Statement credits or returns can result in having a negative balance on your card. This means you’ve paid more than you owed! In these instances, you can continue to spend like normal to offset this balance or even request a check from your issuer for the balance.
Bottom Line: While most of these credits are automatic, it is still up to you to make sure that they are being applied on your statement!
Final Thoughts
There are a lot of factors to consider when it comes to selecting the credit card that is right for you. It’s important to take the time to look into all of the details for each card before selecting — and we hope that this extensive guide will help you do just that!
