How to find the best credit card for you in 2019
Credit cards, when used responsibly, can help you reach your financial goals, but choosing the right credit card can be overwhelming. There are hundreds of options — each with their own advantages and disadvantages, and credit card issuers are constantly updating their products. It can be hard to stay up to date on the best offers.
Whether you’re looking to upgrade your travel experiences, save on everyday purchases, consolidate debt or manage your business expenses, there is a credit card out there for you. That’s why our Bankrate team has compiled hours of research to help you navigate through the credit card selection process.
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Bankrate’s review criteria for the best credit cards of 2019
Bankrate’s team of credit card experts compared 3,476 credit cards and 600 banks in the process of reviewing each credit card on our list of best credit cards of 2019. The most important factors in determining the score for our top picks were rewards, cash back rates, introductory 0% interest offer term lengths, balance transfer options, the opportunity to build credit, interest rates and ownership fees.
Every card that we offer has been rated on a five-star scale. You can find more information about each card by clicking on the card names to read our in-depth reviews.
What are credit cards, and how do they work?
Put simply, credit cards act as a revolving line of credit that allows consumers to make purchases now and pay them off later. Each month, you have the opportunity to pay a minimum payment, your full balance, or an amount in between. While most cards don’t require you to pay off your balance in full each month, that is the only way to avoid paying interest fees on your purchase.
With over 450 million credit cards currently in circulation, it’s clearly a favorite payment method among both consumer and business owners. However, according to Experian’s survey, 42% of consumers listed the number one benefit to owning credit cards as “having a cushion for emergency expenses,” which means many cardholders might be missing out on rewards and perks that playing the credit card game can get them.
When credit cards are used to their full potential, they can help you pay off large purchases over time, earn rewards that can be redeemed for cash back or travel, build up or repair your credit score and so much more.
Features to look for when comparing credit cards
Here are the features you should look at to determine which cards will offer you the best overall value.
- APR (annual percentage rate): APR represents the interest that a credit card issuer charges you if you carry a balance. Typically, issuers have a variable APR range (17.99% – 25.24% with the Capital One® Venture Rewards Credit Card, for example), and where each cardholder falls in that range will depend on your creditworthiness.
- Annual fee: Some credit cards require cardholders to pay an annual fee as the cost for holding the card. Typically, the higher the annual fee, the more value the card offers in regards to rewards, bonuses, perks and other benefits.
- Sign-up bonus: One incentive issuers often use to get you to apply for a credit card is offering a sign-up bonus. After spending a certain amount within a set period of time (typically within the first 3 months after you open an account), cardholders receive a one-time bonus in the form of points, miles, statement credit or cash bonus.
- Rewards structure: Easily one of the most important card features we look at is how cardholders can earn rewards. Different rewards structures cater to different spending habits and lifestyles, and how the card’s rewards system is set up is a large factor in determining which card is right for you.
- Perks and benefits: Each credit card on the market offers a set of perks for cardholders. A top-tier travel card might offer benefits such as lounge access, trip insurance, travel credits, TSA PreCheck or Global Entry application fee credits and more. On the other hand, cash back credit cards might be more likely to offer access to presale tickets, online shopping portal discounts and more.
- Balance transfer terms: If you’re looking to consolidate debt, a balance transfer offer on a credit card can help you save hundreds or even thousands of dollars on interest payments.
- Customer experience: Each credit card issuer is different, from their mobile apps to their customer service options. Keep that in mind when considering which card should be added to your wallet.
Choosing the best credit card
There is no such thing as a one-size-fits-all credit card. The good news is that there is an abundance of cards to choose from, whether you’re looking to boost your credit score, earn cash back rewards or save up points and miles to fund your next vacation.
Rewards continues to be the top credit card feature that consumers look at when choosing a credit card, according to TSYS research.
Rewards as top credit card feature:
TSYS 2017 Consumer Payment Study
With so many different credit card rewards options, it can be hard to know exactly what type of credit card is right for you. Here are a few questions to ask yourself as you’re comparing top offers.
Why are you looking for a credit card?
Are you looking to earn cash back rewards on everyday purchases? Are you a frequent traveler who wants to use rewards to fund your next vacation? Are you searching for a way to earn rewards on expenses for your small business? Do you need to build up your credit profile, plan for a large upcoming purchase or consolidate debt?
The best credit card for you will greatly depend on your answer to these questions. If you know you rarely travel, then top travel cards such as the Capital One Venture or Chase Sapphire Preferred won’t be a good fit for your needs. If one of your 2019 goals is to use points and miles to fund your trip to Europe, on the other hand, then a cash back card probably won’t give you as much value as top-tier travel cards.
As of 2017, cash back reigned king as the most preferred credit card rewards type — most likely due to the flexibility of cash back. Credit card issuers are beginning to take notice as well, offering more attractive cash back offers.
Preferred types of rewards:
- Cash back
- Gift card
TSYS 2017 Consumer Payment Study
What are your monthly spending habits?
Many cards offer bonus categories to help cardholders maximize earnings on certain kinds of expenses. These differ from card to card within each category. For example, the Chase Sapphire Preferred Card offers 2x points on travel and dining purchases while the Citi Rewards+ Card offers 2x points at gas stations and supermarkets. Knowing your spending habits can help you determine which card you can get the most value out of using.
If the majority of your budget is spent on dining and entertainment, the Capital One Savor should be at the top of your list. However, if you don’t have a particular spending category that monopolizes your budget, a flat-rate cash back card like the Capital One Quicksilver might be more up your alley.
Are you willing to pay an annual fee?
Many of the top-tier rewards cards charge annual fees. While the perks typically outweigh the cost, those who don’t have the budget bandwidth to take on premium annual fees should consider no-fee options.
If the card charges a $95 annual fee, you’ll need to spend an average of $400 each month (earning 2x points or 2% cash back on average) to offset the cost of the annual fee. If you don’t plan on using your card that often each month, you’ll be better off with a card boasting no annual fee. Some of Bankrate’s favorite cards offer innovative rewards structures and an array of perks without charging a hefty fee, including the Citi Rewards+ Card and the Bank of America Cash Rewards Credit Card.
How to qualify for the best credit cards
Issuers determine which credit cards you qualify for based on your creditworthiness — primarily your credit score. While there are 3 major credit bureaus, most issuers use your FICO score. (FICO bases your score on the data sent to the credit bureaus.)
Top-tier cards generally require good-to-excellent credit for approval. Your credit score will also play a role in how much interest you pay when you carry a balance on your card. The higher your credit score, the better cards you’ll have at your disposal and the less interest you’ll have to pay.
Now more than ever, it is important for you to have a high credit score to be approved for the best credit card. As credit card issuers continue to improve their products and offer better rewards rates and beneficial perks, they are becoming more selective in whom they approve.
Rejection rates over the past 3 years have been climbing, especially for those with credit scores below 680, The Federal Reserve of New York reported in October 2018.
Your credit score breakdown
FICO credit score is a number between 300 and 850, determined by five primary factors:
- Payment history. The most important factor of FICO’s scoring model is your payment history. Lenders want to know that they can trust you to make on-time payments each month.
- Credit utilization ratio. This is the second largest factor that goes into your FICO score, and it’s calculated by looking at how much you owe to all of your lenders compared to your available credit.
- Length of credit history. The longer you’ve been building credit, the more trustworthy you’ll be considered by lenders. This factor makes up 15% of your FICO score.
- New credit. Make sure you’re only opening new lines of credit when necessary — applying for multiple credit card accounts in a short period of time can deduct from your score.
- Types of credit. Lenders, issuers included, like to see a healthy mix of credit types. This factor only makes up 10% of your FICO score, but it’s important to try to have a balance of revolving (credit cards) and installment (mortgages or loans) credit types.
Improving your credit score
Building a high credit score takes time and consistent healthy habits. The most important things to remember are to pay your bills on time and try to keep your credit utilization ratio as low as possible. The rest of it is mainly just building up a strong payment history, healthy credit mix and long length of credit over time.
There is no shortcut to having a great credit score, but using your credit card responsibly can go a long way in helping you improve a less-than-stellar score.
Making the most out of your credit card
When used to your advantage, credit cards can help you reach your financial goals. Whether you want to pay off debt, save up rewards to pay for a big ticket item or use everyday expenses to help fund your travels, credit cards can be used as a tool to get you there.
Keeping a balance vs. paying off your card in full
Whenever possible, pay off your bill in full each month. That’s the best way to avoid having to pay interest rates on your purchases, and it keeps your credit utilization low.
However, there are times when holding a balance is unavoidable. If you know that you will have to carry a balance, it’s worth looking at cards offering a 0% introductory APR. These cards allow you to pay off purchases over time without paying interest. Just make sure that you’ll pay off the full balance by the end of the 0% APR period.
If you have a personal American Express credit card, you also have access to their Plan It(SM) feature, which allows you to choose a monthly payment plan for larger purchases. You’ll pay a fixed monthly fee rather than paying interest. While 0% APR cards offer a way to avoid interest and fees altogether, they only allow you to forgo interest payments for a certain amount of time. Plan It(SM) gives you a way to cut down on interest charges on large purchases made throughout the lifetime of your account.
Utilizing perks and benefits
If you’re paying an annual fee for a card, that cost takes into account perks and benefits offered by the credit card — and if you’re paying for them, you should use them. Typically, if you take full advantage of your card’s benefits, the card’s worth far outweighs any fees. For example, the Chase Sapphire Reserve’s $300 annual travel credit, Global Entry or TSA PreCheck application fee credit and array of travel insurance coverages are worth far more than the $450 annual fee.
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* See the online application for details about terms and conditions for these offers. Every reasonable effort has been made to maintain accurate information. However all credit card information is presented without warranty. After you click on the offer you desire you will be directed to the credit card issuer's web site where you can review the terms and conditions for your selected offer.