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What’s the best credit card?

By Leslie McFadden ·
Wednesday, October 13, 2010
Posted: 4 pm ET

In conjunction with survey findings on the impact of the Credit CARD Act, Consumer Reports recently published a list of the best and worst credit cards in the current marketplace. For the best cards, the magazine named seven cash-back cards, two travel cards and three low-interest/fees cards, and called out two fee-laden cards as being some of the worst cards available.

Several major issuers made the best-of list, including cards from American Express, Capital One and Chase. You can see the results at ConsumerReports.Org.

I'm often asked for my recommendation on the best credit card. The boring truth is: It depends on the needs and habits of the consumer. Even Consumer Reports' rundown of the best and worst cards describes under each category the type of consumer that would find the type of card beneficial. There is no one-size-fits-all card for everyone.

Even with rewards or cash-back cards, the usefulness of the card may depend on your spending level. A card that offers a higher rate of return after you hit a spending threshold may not be the card for you if you use credit cards lightly. For instance, Blue Cash from American Express offers "up to 5 (percent) cash back at supermarkets, gas stations, and drugstores," but the fine print says the higher rebate doesn't kick in until you spend $6,501 on the card. You would have to spend more than $1,000 per month to reach that next tier within six months.

Other points to consider:

  • Your credit score. Do you have the credit necessary to qualify for the card?
  • Whether you will carry a balance after the promotional period. If you plan to revolve some debt, a low-interest credit card should be the target. If you never carry a balance, look for a credit card with a generous rewards program.
  • How you will use the card. For instance, if you want a card simply for emergencies, you should look for a card with a low APR and no annual fee. If you need to transfer a balance, consider the balance transfer fee and promotional terms.
  • Fees you're likely to pay. If you plan on traveling internationally, check the currency conversion fee. If you sometimes make payments over the phone, find out what the fee is to expedite a payment.

In other words, consider the features and fees of cards along with your actual or planned usage.

For help finding the right type of card, try our credit card finder. You can also sort our credit card offers by credit score, card type or issuer.

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