How to Find the Best Credit Card for You – NerdWallet

It ‘s a question we hear all the time from NerdWallet readers, vitamin a good as from syndicate and friends. And we normally respond with a non-answer answer : “ It depends. ” That ‘s because the best citation card for you does indeed depend on many factors, including your goals, habits, life style and credit history. The best wag for you may not be the best card for person else. Plus, your needs can evolve over time. What works for you now may not suit you late on. You may evening decide you need more than fair one card. still, the best credit cards all tend to have a few things in park. here ‘s how to get a sense of what might be the best credit circuit board for you at the moment.

Types of credit cards

There are several major credit circuit board issuers and literally thousands of cards, but most meet into the following categories :

CREDIT CARD TYPE HOW IT WORKS
Cash back Get a certain percentage back on the money you spend. redemption options can include a statement credit, check or direct down payment. Best for : Anyone seeking the chasteness and tractability of cash back, specially if you do n’t travel frequently .
travel Earn points or miles with each buy. Redeem for airfare, hotel stays and other travel expenses. Best for : Those who travel much, specially internationally .
balance transfer Transfer debt from another credit card and pay it down interest-free for a limited period of time. Best for : Consumers with excellent credit who plan to pay down the balance before the 0 % interest period ends .
low interest Minimize the sum of matter to you ’ ll pay on balances you carry from calendar month to calendar month. Best for : Consumers who qualify for the lowest concern rate a card offers and who plan to carry a balance .
Secured Designed for consumers with badly credit rating or no credit history. They require an upfront situate, which is typically equal to your credit restrict. Best for : Those who are looking to build their credit. many cards require not just a deposition, but besides a bank history to fund that deposition ( though there are exceptions ) .
student Designed for college students looking to build their credit history, although income and historic period requirements still apply. Best for : Students under senesce 21 with autonomous income, or students age 21 and up who rely on their own earnings, or those of a spouse or collaborator .
minor clientele Tailored toward entrepreneurs who need to charge large expenses and provide cards to employees. Best for : business owners, including sole proprietors, freelancers and side hustlers .

What type of credit card matches your needs?

here are some questions to ask yourself :

Do you plan to carry a balance?

look for a 0 % or low-interest credit card. Rewards cards tend to have higher APRs, and when you carry a balance wheel, the interest you ‘ll pay on it will probable offset any rewards you earn. So a rewards circuit board wouldn ’ thymine be the best option.

Do you have existing credit card debt you want to pay down?

Consider a balance transfer credit poster with a 0 % presentation APR period. When you check out offers, ask these questions :

  • How long does the 0 % period final, and is it adequate clock to pay off your debt ?
  • Does the 0 % use merely to transferred balances or besides to fresh purchases ? ideally, it would apply to both .
  • How much is the balance transfer fee ? typical fees range from 3 % to 5 % of the transmit balance, but some cards charge no counterweight transfer fee.

Would you like cash back on your purchases?

Cash back is the most elastic type of credit tease honor. But you ’ ll need to decide what type of cash-back credit card works best for you :

  • A menu that pays you a two-dimensional rate on all spending. Aim for at least 1.5 % rear, although you can find cards that earn 2 % back .
  • A card that pays higher rates in specific categories, such as accelerator or groceries, and a lower rate on everything else .
  • A batting order with bonus categories that change throughout the year .

How much do you travel?

With travel credit cards, you earn points or miles that you can use to book locomotion or redeem for credit rating against travel expenses on your argument. This is great if you travel frequently. But if you do n’t travel much, or at all, your rewards will fair pile up unused ; in that case, a cash-back card is better.

Do you mind paying an annual fee?

many rewards credit cards can give you more than adequate back in rewards to make up for the annual fee. hush, if you ‘re antipathetic to fees in general, there are full citation cards with no annual fee.

What credit card rewards are right for you?

Cash-back rewards

Cash-back cards earn a share second of every dollar you spend. typically, you can redeem for a statement recognition or actual cash back. There are three kinds of cash-back cards :

  • Flat-rate cards : These cards earn the same rewards rate, no matter where you use your menu. For exercise, the Citi® Double Cash Card – 18 month BT offer earns 2 % cash back — 1 % when you make a buy, and 1 % when you pay your bill. Because your rewards rate is the lapp everywhere, these are the lowest-effort cash-back cards .
  • Tiered bonus cards : These cards earn a higher cash-back rate in certain outgo categories, and 1 % back everywhere else. If you tend to spend the most in these areas, these cards can supersize your earning power. The Capital One Savor Cash Rewards Credit Card earns 4 % cash back on dining, entertainment and eligible streaming services ; 2 % at grocery stores and 1 % everywhere else. Plus, earn 8 % cash back on tickets at Vivid Seats. Prefer a night in after your long change ? The Blue Cash Preferred® Card from American Express earns 6 % cash back at U.S. supermarkets ( on up to $ 6,000 in spend per year, then 1 % ), 6 % on blue-ribbon U.S. streaming services, 3 % on eligible transit and at U.S. gasoline stations, and 1 % everywhere else. Terms apply ( see rates and fees ) .
  • Rotating bonus cards : These cards cycle through different bonus categories on a monthly or quarterly footing, often offering a high rate of 5 % back in these areas. however, it takes more attempt to remember which card to use when ( particularly since you may have to activate the new bonus categories whenever they switch ). The Chase Freedom Flex℠ and Discover it® Cash Back both earn 5 % cash back on up to $ 1,500 per quarter in outgo in bonus categories that you activate, and 1 % cash back on other outgo. Bonus categories have historically included things like accelerator stations, restaurants and grocery store stores .

If you spend a fortune at a specific memory, it may be worth getting that retailer ‘s co-branded recognition tease for the rewards. For example, the Costco Anywhere Visa® Card by Citi gives you 4 % cash back on gas ( up to $ 7,000 a year in spend ), 3 % back on restaurants and travel, 2 % on all purchases at Costco and Costco.com, and 1 % on everything else. The Amazon Prime Rewards Visa Signature Card, meanwhile, earns 5 % back on Amazon.com and at Whole Foods, along with 2 % back at restaurants, boast stations and drugstores, and 1 % on all other purchases.

Travel rewards

The more much you travel, the more value you stand to get out of a travel rewards credit rating card. In fact, a NerdWallet study found that domestic travelers who spent more than $ 8,600 per year on travel, or anyone who took at least one international trip per year, can benefit the most from locomotion cards. Travel cards fall into two basic camps :

  • General travel cards : If you ’ ll fly any airline or stay in any hotel so long as the price is right, a general travel rewards card will give you the most tractability when it comes to earning and redeeming points. Flat-rate travel cards like the Capital One Venture Rewards Credit Card earn the same number of points or miles for every purchase ( in that card ’ south casing, you ’ ll earn 2 miles per $ 1 spent for most purchases ). Tiered locomotion cards earn more for particular purchases, like the Chase Sapphire Preferred® Card, which offers 5 points per $ 1 spent on all travel purchased through Chase Ultimate Rewards® ; 3 points per $ 1 spent on dine ( including eligible pitch services and takeout ), select streaming services, and on on-line grocery store purchases ( not including Target, Walmart and wholesale clubs ) ; a well as 2 points per $ 1 spent on travel not purchased through Chase Ultimate Rewards® ; and 1 point per $ 1 spent on other purchases .
  • Co-branded change of location cards : If you frequently fly a specific airline, consider airline credit cards, which give you perks like free check bags, priority board and extra frequent aviator miles. If you often koran with specific hotel chains, you may want to look at hotel credit cards, which allow you to earn free nights and upgrades .

How much effort are you willing to put in?

Your ideal credit card, or combination of cards, besides comes down to how a lot energy you care to expend on managing the contents of your wallet. You can keep things simple with one rewards batting order you use for everything, or pair multiple cards to maximize your earning potential. The “ Chase Trifecta, ” for example, is popular with travel card fans. Setting a strategy for redeeming rewards is authoritative, besides. Cash-back cards make it easier, requiring you to simply request a statement credit. Some change of location cards operate similarly, allowing you to get a statement credit to cover past travel expenses, while with other cards, you cash in points to pay for travel booked through the card ’ s web site. thus when it comes to “ the best accredit circuit board, ” you can see why we say that it depends. When you ’ ra shopping for your own best tease, make surely you know what you can qualify for, american samoa well as what type will best lawsuit your goals or spending habits.

What credit card are you likely to qualify for?

Know your credit score

citation cards may require applicants to have attained fair, good or even excellent citation to qualify. That means that the best credit rating card for you needs to match where you are nowadays in terms of your credit scores. ( Your scores are just the begin, though ; income and other factors are considered when you apply. ) Find out your recognition grudge for spare on the NerdWallet app. Cards listed on NerdWallet have a “ commend accredit seduce, ” to give you a sense of whether you could qualify. Our credit card comparison tool allows you to filter cards according to credit seduce.

If necessary, work to rebuild your credit

In general, the better your score, the better the cards you ‘ll qualify for. good to excellent credit ( typically FICO scores of at least 690 ) can qualify you for higher rewards, lower interest rates and more perks. sol if your credit score international relations and security network ’ deoxythymidine monophosphate quite where you would want it to be, what can you do ?

  • begin by checking your credit report, because errors and long-forgotten debts can have negative effects. You can get one spare report per year from each of the three major credit chest of drawers — Equifax, Experian and TransUnion — at AnnualCreditReport.com. Dispute any errors with the credit chest of drawers .
  • From there, adopt credit-building habits. A secure credit calling card can help you establish your credit history, but be certain to pay your credit card bill on time ( and ideally in full ) each calendar month. Pay early bills on time, excessively, like your electricity or gas bills. Limit your credit card spend to no more than 30 % of your full credit terminus ad quem each charge bicycle. If you have a low recognition limit, that may mean you should use your circuit board for a few expenses, and pay with cash or a debit card for the rest. Be patient through this process — it can take time before your new habits result in an increase for your credit scores.

To view rates and fees of the Blue Cash Preferred® Card from American Express, see this page. information related to the Amazon Prime Rewards Visa Signature Card and the Capital One Savor Cash Rewards Credit Card has been collected by NerdWallet and has not been reviewed or provided by the issuer of this menu .

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