What is a “preferred” credit card?

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Published on November 25, 2024 | 3 min read

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Key takeaways

Preferred credit cards are designed for individuals with good to excellent credit scores who want to enhance their credit card rewards.
These cards may have moderate annual fees, but the benefits and rewards can offset the cost.
Preferred credit cards are different from premium credit cards, which offer higher annual fees and elite benefits.
It’s important to compare all options and consider factors such as spending habits and credit score before applying for a preferred credit card.

If you’re wondering what a preferred credit card is, you’re not alone. Many credit card issuers offer cards with names that include the word “preferred” — for example, the Chase Sapphire Preferred® Card and the Citi® Diamond Preferred® Card* — without necessarily clarifying why cardholders should prefer those cards over other options.

So, what is a preferred card, and how do preferred cards compare to others? Let’s take a look at a few of the best-known cards to help you decide whether it’s worth it to add one to your wallet.

What does “preferred” credit card mean?

Generally speaking, preferred credit cards are designed for people who have built a good or excellent credit score and are ready to take their credit card rewards to the next level. While some preferred credit cards charge annual fees, they’re generally moderate, and savvy cardholders can easily earn enough rewards to offset the cost.

Is “preferred” just a marketing term?

Are preferred credit cards really better than competitors, or is “preferred” just a marketing term? In the end, “preferred” is a marketing term connected to cards that offer desirable perks and rewards a cut above average — but not at the level of a premium or elite card.

In other words, there’s no reason to choose a preferred credit card if you don’t actually prefer the card. If you’d be happier with a premium credit card, a no-annual-fee card, a credit-building card or another of today’s best credit cards, don’t let the word “preferred” prevent you from applying for the card you really want.

If you need help deciding which credit card is right for you, Bankrate’s CardMatch™ tool can help. Plus, you might even find yourself preapproved for your next credit card.

How is a preferred credit card different from a premium credit card?

While preferred credit cards and premium credit cards may sound similar, they are two very different products. Understanding the difference between preferred and premium credit cards can help you choose your next card wisely.

Premium credit cards are designed for people with excellent credit who are ready to pay high annual fees in exchange for elite benefits and perks. Many premium credit cards are also some of the top travel credit cards. In addition to the points and miles offered with every purchase, cardholders may receive complimentary airport lounge access, annual airline credits, travel protections and more.

The Chase Sapphire Preferred card, for example, charges a $95 annual fee. The Chase Sapphire Reserve®, one of the top premium travel cards on the market, charges a $550 annual fee — and offers a lot more in rewards, benefits and perks. Both cards have several unique perks, but if you find yourself choosing between them, be sure to consider your spending habits first and foremost. It all depends on what you’re hoping to get out of your travel credit card and how much you’re willing to pay.

Today’s best “preferred” credit cards

If you’re looking for a preferred credit card, we’ve got four top picks for you to consider. Whether you’re hoping for a travel credit card, a balance transfer credit card, an everyday spending credit card or a business credit card, you have options. Here’s how each of these stacks up to the competition.

Chase Sapphire Preferred® Card

The Chase Sapphire Preferred card is a good choice for people who want to test out travel rewards before committing to a premium travel card like the Chase Sapphire Reserve. With a $95 annual fee and numerous opportunities to earn Chase Ultimate Rewards, cardholders can get a lot of value out of the Chase Sapphire Preferred — as long as they’re prepared to use their Chase Sapphire card for a lot of purchases.

The Chase Sapphire Preferred card’s sign-up bonus, for example, rewards 60,000 points to cardholders who spend $4,000 in the first three months. This bonus is worth $750 when redeemed for travel through the Chase TravelSM portal, and it is considered one of the best sign-up bonuses in the industry. It also offers 5X points on travel-related purchases made through Chase Travel, plus excellent travel insurance.
If you want to start earning Ultimate Rewards but aren’t sure you can pay off the credit card balance required to earn that bonus, the Chase Freedom Unlimited® might be a better fit. It offers a similar rewards structure, and while the points won’t get you the 25 percent redemption boost of the Sapphire Preferred, there’s no annual fee.

Citi Diamond Preferred® Card

The Citi Diamond Preferred Card is one of the few preferred credit cards that does not charge an annual fee. It’s also one of the rare credit cards that does not offer any credit card rewards.

What do cardholders get when they apply for the Citi Diamond Preferred? The opportunity to take advantage of one of the longest 0 percent intro APR balance transfer offers on the market. Cardholders receive 21 months of zero percent intro APR on balance transfers, as long as those balances are transferred within the first four months of account opening (after that, the variable APR will be 17.49 percent to 28.24 percent, based on your creditworthiness). This top balance transfer credit card could be just what you need to pay off old debt while avoiding new interest charges.
If you’d rather trade a shortened 0 percent intro APR period for the opportunity to earn rewards on purchases, consider the Citi Double Cash® Card. You’ll only get 18 months of a 0 percent intro APR on balance transfers made within the first four months (after that, the variable APR will be 18.49 percent to 28.49 percent, based on your creditworthiness). But, you’ll have the opportunity to earn 2 percent cash back on new purchases (unlimited 1 percent cash back when you buy, plus an additional 1 percent as you pay for those purchases).

Blue Cash Preferred® Card from American Express

If your household spends a lot of money on groceries, the Blue Cash Preferred® Card from American Express could be your new favorite credit card. With 6 percent cash back on U.S. supermarket purchases (on up to $6,000 in purchases per year, then 1 percent), 6 percent back on select U.S. streaming subscriptions, 3 percent cash back on transit, 3 percent back on U.S. gas station purchases and 1 percent back on all other purchases, the Blue Cash Preferred is a good choice for nearly all of your everyday spending needs.
The Blue Cash Preferred Card comes with a $0 intro annual fee for the first year, then a $95 annual fee thereafter. If that’s a little too much for your budget, consider the Blue Cash Everyday® Card instead. This no-annual-fee card offers slightly fewer points on groceries and other everyday expenses but could be just what you need to save money and get dinner on the table.

Ink Business Preferred® Credit Card

Small-business owners can also take advantage of preferred credit cards. The Ink Business Preferred® Credit Card is designed for business owners who are ready to invest in growth. With a $95 annual fee — tax-deductible, naturally — and the opportunity to earn top-level Chase Ultimate Rewards on travel, shipping, internet, phone, cable and online advertising, there are a lot of reasons to use the Ink Business Preferred card for many of your small business purchases.
That said, some small-business owners may not be ready for the spending level required to get the most out of the Ink Business Preferred card. For example, the 90,000-point sign-up bonus requires cardholders to spend $8,000 on qualifying business purchases in the first three months. If you run a small business, you may be better off with the no-annual-fee Ink Business Cash® Credit Card instead.

The bottom line

Preferred credit cards may offer more benefits than other types of credit cards, but there’s no set formula behind that term. So, make sure to compare all of your options before applying for a preferred card. You may be better off with a good no-annual-fee card, for example, or you may want to build your credit score before you apply for a preferred card. You may also want to skip the preferred card and go straight to the premium credit card instead, paying a higher annual fee in exchange for some of the biggest rewards in the industry.

The information about the Citi® Diamond Preferred® Card has been collected independently by Bankrate. The card details have not been reviewed or approved by the issuer.