In the News Today: Credit card debt is down 17% – let’s keep the habit going
With credit debt falling during the coronavirus pandemic, there are some questions about how to maintain it. Read to find out our take on how to stay out of debt in the full article by industry analyst, Ted Rossman.
A complete guide to choosing and using credit cards
The right credit card can play an important role in helping you achieve your financial goals responsibly. But how do you choose among the hundreds of credit card offers available on today’s market? Bankrate is here to help.
Do you want to earn cash back on everyday purchases? Upgrade your travel experience? Manage different kinds of consumer debt? Build or repair your credit? Whatever your objective might be, our expert analysis of leading offers from our credit card partners can guide you in the right direction.
We evaluate top contenders for today’s best credit cards in all the major categories and narrow down the list to a select few. We also offer expert advice on how to best utilize a credit card as part of your overall personal financial profile.
The more you know...
Credit card issuers have tweaked existing rewards programs within the last year to boost rewards for essentials like groceries, takeout and gas. However, according to a
recent Bankrate study, 31% of cardholders didn’t redeem any rewards in 2020.
In this guide:
Compare the best credit cards of 2021
A closer look at Bankrate’s best credit cards
Citi Custom Cash℠ Card
Best for automatic bonus category
- This card is best for: Those who want the high rewards rate of a bonus cash back card without having to activate or choose categories in advance.
- This card is not a great choice for: Strategic shoppers who prefer plotting out their cash back strategy each quarter before they start spending.
- What makes this card unique? The cash back program adjusts to your spending habits in the top eligible category each billing cycle so that you’ll earn the highest rate where you’ve spent the most.
- Is the Citi Custom Cash Card worth it? The automatic bonus category might be an unfamiliar feature in the cash back landscape, but there’s still potential to earn big returns.
Read our full Citi Custom Cash℠ Card review.
Citi® Double Cash Card
Best for up to 2% cash back
- This card is best for: Anyone who likes the idea of turning good credit habits into additional cash back (1 percent when you make eligible purchases, another 1 percent when you pay your credit card bill).
- This card is not a great choice for: People who spend large amounts in special areas (gas, groceries, superstores, etc.) and might get higher returns with a rotating category card.
- What makes this card unique? The two-part cash back system provides extra incentive to make timely payments — not just for the sake of your credit score but also to earn the additional 1 percent.
- Is the Citi® Double Cash Card worth it? It might not be the flashiest cash back card, but it offers a practical and potentially lucrative way to earn as you go.
Read our full Citi® Double Cash Card review.
Capital One Quicksilver Cash Rewards Credit Card
Best for flat-rate cash back
- This card is best for: People who prefer their cash back rewards simple: no special categories or earning limits, just 1.5 percent cash back on every eligible purchase.
- This card is not a great choice for: Big spenders in certain purchase categories (groceries, gas, online shopping and so on) who could earn more with a card that has tiered or rotating bonus categories.
- What makes this card unique? Unlike some rewards programs, Capital One provides full value when you redeem cash rewards through Amazon Shop with Points ($1 in cash rewards is worth $1 in redemption value).
- Is the Capital One Quicksilver Cash Rewards Credit Card worth it? Earning flat-rate cash back might not be rocket science, but the Quicksilver is one of the most valuable “fire it and forget it” choices you’ll find.
Read our full Capital One Quicksilver Cash Rewards Credit Card review.
Blue Cash Preferred® Card from American Express
Best for everyday family purchases
- This card is best for: Modern, on-the-go families who spend a lot on groceries, gas, transit and streaming subscriptions.
- This card is not a great choice for: People who prefer the simplicity of a flat-rate card that doesn’t involve doing the mental mathematics of calculating rewards rates for special purchase categories.
- What makes this card unique? You’ll have a hard time finding a card with high-value rewards categories as family-focused as this one’s. The categories don’t rotate, so you won’t have to change your spending habits according to the calendar.
- Is the Blue Cash Preferred® Card from American Express worth it? The $95 annual fee is one of the few potential turn-offs, but Amex offers a $0 intro annual fee your first year. Even when the annual fee does take effect, the rewards earnings and benefits are likely to counteract the cost.
Read our full Blue Cash Preferred® Card from American Express review.
Wells Fargo Platinum card
Best balance transfer card for good credit
- This card is best for: Anyone with good credit looking for one of the longer introductory balance transfer offers available (18 months from account opening 0% intro APR, 16.49% – 24.49% variable APR after).
- This card is not a great choice for: Anyone who wants a balance transfer card that they can transition to an everyday rewards card once the transfer is paid off (no rewards program).
- What makes this card unique? The My Money Map spending and budgeting tools are designed to help you better manage your personal finances — a plus for credit-conscious consumers.
- Is the Wells Fargo Platinum card worth it? The intro offers on balance transfers and purchases compare well with similar cards, but the regular APR and the fee for late or returned payments (up to $40 each) could make mismanaging your balance quite costly.
Read our full Wells Fargo Platinum card review.
Chase Freedom Unlimited®
Best for sign-up bonus
- This card is best for: Those who want a cash back card with multiple categories and a sign-up bonus that you can easily earn without overspending ($200 Bonus after spending $500 on purchases in your first 3 months from account opening).
- This card is not a great choice for: Infrequent travelers. Travel purchased through Chase is the highest-earning category at 5 percent per $1 spent, so people who don’t take many vacations or business trips won’t get the full benefit.
- What makes this card unique? Both the Chase Freedom Unlimited and Chase Freedom Flex℠ are part of the Pay Yourself Back program. Through 12/31/21, you can use Pay Yourself Back with these cards to redeem donations made to eligible charities for a 25 percent boost in your points value.
- Is the Chase Freedom Unlimited worth it? Travelers and shoppers who maximize the eligible purchase categories can earn considerable cash back rewards. The sign-up bonus offers solid value in relation to the low spending requirement.
Read our full Chase Freedom Unlimited® review.
Discover it® Cash Back
Best for maximizing rotating categories
- This card is best for: People who are willing to put in the work. When the categories rotate, remember to activate — and then direct your spending toward the bonus categories to earn the 5 percent rate on up to $1,500 each quarter, followed by 1 percent.
- This card is not a great choice for: People who want to earn cash back but prefer a low-maintenance way to do it. If that sounds like you, consider a flat-rate card that earns on all eligible purchases.
- What makes this card unique? One of Discover’s trademark features is the first-year cash back match. Discover will automatically match all the cash back you’ve earned at the end of your first year.
- Is the Discover it® Cash Back worth it? Considering the earning potential and the lack of an annual fee, it can be a considerably valuable card. Activating the categories and adjusting your spending does require some effort on your part, though.
Read our full Discover it® Cash Back review.
Chase Sapphire Preferred® Card
Best for your first travel card
- This card is best for: Anyone who wants to explore the ins and outs of travel credit cards, with rewards and benefits that also make it a practical experience.
- This card is not a great choice for: Those who want premium travel perks such as airport lounge access or free checked bags.
- What makes this card unique? You have the option of redeeming your points for statement credits against existing purchases in select, rotating categories without losing value. In fact, you could get 25 percent more during the current offer.
- Is the Chase Sapphire Preferred® Card worth it? The rewards program makes it fairly easy to get your money’s worth with this card (plus 25 percent points value when you redeem for travel through the Chase Ultimate Rewards online portal).
Read our full Chase Sapphire Preferred® Card review.
Capital One Venture Rewards Credit Card
Best for flexible redemption options
- This card is best for: Frequent travelers who want an easy way to earn rewards and multiple options for how they can use them.
- This card is not a great choice for: Brand loyalists. A co-branded card could have higher rewards rates and offer perks unique to a particular airline or hotel chain.
- What makes this card unique? You get a lot of flexibility when it comes to redeeming your Miles. Options that bring the highest value are booking travel through Capital One, redeeming Miles as statement credits for past travel expenses and transferring Miles to any of 15+ travel loyalty programs.
- Is the Capital One Venture Rewards Credit Card worth it? The $95 annual fee is comparable to similar cards. If you put a premium on flexibility, the array of options for redeeming miles should have a value all its own.
Read our full Capital One Venture Rewards Credit Card review.
Petal® 2 “Cash Back, No Fees” Visa® Credit Card
Credit-building with cash back
- This card is best for: People with no credit history, particularly students, who want to build their credit profile responsibly while also earning cash back rewards.
- This card is not a great choice for: Experienced credit users. If your credit history is already solid, finding a card that offers higher cash back rates and better perks shouldn’t be difficult.
- What makes this card unique? It has an incentive-driven rewards program that rewards responsible credit habits. Make 12 on-time monthly payments and you could see your cash back rate increase from 1 percent to 1.5 percent.
- Is the Petal 2 “Cash Back, No Fees” Visa Credit Card card worth it? New credit users are sure to appreciate the lack of an annual fee, part of the card’s “no-fees-whatsoever” appeal. If you’re just starting this part of your financial journey, the Petal 2 could serve as a useful teaching tool.
Read our full Petal® 2 “Cash Back, No Fees” Visa® Credit Card review.
Discover it® Student Cash Back
Best for earning cash back with no credit history
- This card is best for: College students interested in the chance to build a credit history and earn as they learn about rotating bonus categories.
- This card is not a great choice for: Anyone who feels like their schedule is already full of reminders and boxes to check. You have to enroll in the bonus categories every quarter to earn 5 percent (on up to $1,500 in combined purchases, then 1 percent).
- What makes this card unique? Most cash back cards, much less cards with this kind of earning potential, require not just a credit history but a good or excellent credit score.
- Is the Discover it® Student Cash Back worth it? If you put in the effort to enroll in the bonus categories and target your spending — responsibly, of course — your cash back earnings could really make the grade.
Read our full Discover it® Student Cash Back review.
Capital One SavorOne Cash Rewards Credit Card
Best for dining and entertainment
- This card is best for: People who want to turn their appreciation for food and fun into plus-rate cash rewards (unlimited 3% cash back on dining, entertainment, popular streaming services and at grocery stores (excluding superstores like Walmart® and Target®), plus 1% on all other purchases).
- This card is not a great choice for: Grocery shoppers who are exclusive to superstores and wholesale clubs. The complexities of merchant category codes mean that grocery purchases at establishments like Target or Sam’s Club aren’t likely to qualify for the SavorOne’s 3 percent rate.
- What makes this card unique? Capital One provides access to presale tickets, discounts and more with dining, entertainment and sports experiences.
- Is the Capital One SavorOne Cash Rewards Credit Card worth it? Pair the dining and entertainment rewards with the lack of an annual fee and the SavorOne provides a lot of bang for the buck.
Read our full Capital One SavorOne Cash Rewards Credit Card review.
Blue Cash Everyday® Card from American Express
Best for gas and groceries with no annual fee
- This card is best for: Families with lots of places to go and meals to prepare. The rewards rates on purchases at U.S. supermarkets, U.S. gas stations and select U.S. department stores are exceptional.
- This card is not a great choice for: Those who do their grocery shopping at superstores and wholesale clubs. Purchases that don’t fit the American Express definition of U.S. supermarkets earn just 1 percent.
- What makes this card unique? Complimentary ShopRunner membership offers free two-day shipping and free returns at more than 100 online stores (enrollment required).
- Is the Blue Cash Everyday® Card from American Express worth it? The card’s high-rate categories match up well in areas where busy families are likely to make a lot of purchases, and you won’t have to pay an annual fee.
Read our full Blue Cash Everyday® Card from American Express review.
Jasper Cash Back Mastercard®
Best for cash back referral bonus
- This card is best for: People whose network of friends is more extensive than their credit history. For a limited time only, you can increase your cash back rate from 1 percent to 3 percent for a full year by successfully referring two friends.
- This card is not a great choice for: Experienced credit users, who can afford to be more selective. A good or better credit score should open the door to cash back cards that offer higher rates for less effort.
- What makes this card unique? Credit card referral bonuses are nothing new, but the Jasper Mastercard offers higher cash back rates instead of the usual statement credits or points.
- Is the Jasper Cash Back Mastercard® worth it? Even without the novelty of the referral program, the Jasper’s features and relaxed approach to fees (no annual fee or foreign transaction fees) help make it an interesting option for people with fair credit.
Read our full Jasper Cash Back Mastercard® review.
Credit One Bank® Visa® for Rebuilding Credit
Best unsecured credit card with rewards
- This card is best for: People with bad credit scores (300 to 670 FICO) who want a chance to right the ship while earning modest cash back on eligible purchases.
- This card is not a great choice for: Anyone with a credit score deep in the bad range (below 500). Your creditworthiness determines your annual fee, so a very poor credit score could make the cost of owning the card higher than the cash back returns.
- What makes this card unique? Not many unsecured cards for bad credit offer cash back programs, making this one a rare exception.
- Is the Credit One Bank® Visa® for Rebuilding Credit worth it? If your credit score is a lot closer to 670 than 300, you could qualify for an annual fee that makes the card worthwhile. You’ll still need to focus on responsible habits (like paying your bill on time and not carrying a balance) and look at earning cash back as a benefit, not a goal.
Read our full Credit One Bank® Visa® for Rebuilding Credit review.
Deserve® EDU Mastercard for Students
Best for students with no credit history
- This card is best for: Students who might have trouble getting approved for a credit card because they don’t have a credit history. In particular, international students don’t need a Social Security Number to apply.
- This card is not a great choice for: People who have enough of a credit history (such as paying off a car loan or maintaining a utility account) that they don’t need the relaxed application requirements.
- What makes this card unique? Unlike many cards for people with no credit history, the Deserve EDU Mastercard earns cash back (1 percent per $1 spent on eligible purchases.
- Is the Deserve® EDU Mastercard for Students worth it? The cash back program and benefits like the Amazon Student Prime membership reimbursement after spending $500 in the first three months of card membership (lifetime value worth $59) add to the card’s value. However, the main attraction is how the application process removes some of the barriers that might be standing between you and your first credit card.
Read our full Deserve® EDU Mastercard for Students review.
How do credit cards work?
A credit card is a payment method that serves as a line of credit and lets you make purchases now while paying for them later. Unlike cash, you don’t pay upfront. Unlike checks or debit cards, you don’t pay with money that you’ve already deposited into an account. Credit cards are typically issued by banks and other financial services companies.
Paying by credit card
Physically, credit cards are flat, thin pieces of plastic or sometimes metal that can be scanned by electronic readers. You can also use them for no-contact digital transactions through online portals or by linking them to a smartphone or other mobile device.
Credit limits
When you’re approved for a credit card, you get a credit limit that determines the maximum dollar amount you can borrow on your card. As you make purchases, your available credit decreases. When you pay your bill, your available credit increases. For example, if you spent $500 on your credit card with a $2,000 limit, your available credit would become $1,500. Then, when you pay off that $500, your available credit would return to $2,000.
Paying your credit card balance
With a credit card, you have the option to carry a balance from month to month. You can make a partial or minimum payment rather than paying your balance in full. The downside is that you could face interest charges determined by your credit card’s APR, or annual percentage rate, if your balance remains unpaid past the grace period. It’s best to pay your balance on time and in full whenever possible.
Bankrate Insights
Paying your bills on time,
including your credit card bill, is one of the best things you can do for your credit. Payment history accounts for 35 percent of your credit score.
Is now a good time to get a credit card?
Economic uncertainty related to the COVID-19 pandemic caused some significant developments in credit cards last year. Many issuers even began offering assistance programs that included payment relief and deferred interest charges.
Given the economic volatility of the past year, you have good reason to wonder if now is a good time to get a credit card. Although credit card predictions for 2021 paint a somewhat optimistic picture, here are three things to keep in mind:
Your credit score
As many credit card issuers tightened their approval standards in 2020, the quality of credit scores took on added importance. If you have a FICO Score below 670, you might have trouble qualifying for some credit cards. Work on improving your credit score before opening any new credit accounts.
Your debt situation
Federal statistics show that credit card balances went down by a combined $49 billion nationwide in the first quarter of 2021. However, balances on mortgages, auto loans and student loans all increased. If you’re dealing with a lot of high-interest debt, on a credit card or any other type of credit account, do as much as you can to pay it down.
Finding a card that matches your spending habits
A number of credit card issuers have updated their rewards programs with more opportunities to earn cash back, miles or points on everyday purchases such as gas and groceries. These changes potentially increase the value you could get out of a card even if your current lifestyle is more smart-shopping homebody than big-spending world traveler.
The matter of whether now is a good time to get a credit card ultimately comes down to your personal financial situation and the choice of cards available to you. Before you start shopping for a new card, take the time to evaluate your credit score and current debt. If your finances are in good shape, then you can try to find a card that matches up with your spending habits and goals.
Should I get a credit card?
If you’re wondering whether you should get a credit card, the answer depends on your financial goals and your financial situation.
Do you want to earn rewards that will help you maximize the value of your spending? Do you need to build up your credit profile or manage debt with a balance transfer? And if you have clear goals in mind for your credit card, do you practice the kind of financial habits that make you a responsible user of credit?
When credit cards are used responsibly and to their full potential, they can provide convenience and value that you don’t get with other payment methods, in ways that include:
- Chip readers, online payment portals and digital wallets that make transactions easier and virtually instantaneous
- Rewards programs that earn cash back, travel miles and multi-purpose rewards
- Security features that reduce your vulnerability to fraudulent charges
- Tools designed to help you build or repair your credit and manage your budget
To reap these benefits, you’ll first need to choose the right card and then use it the right way — staying within your credit limit and making full payments on time each month.
What’s the best credit card for you?
There’s no such thing as a one-size-fits-all credit card, and the sheer number of options can make it difficult to choose a credit card that’s best for your unique situation. Fortunately, you can cut through the clutter by using one of two methods:
- Choosing a credit card by category
- Choosing the best credit card offer
The category method is well-suited for people who have a certain goal in mind: earning cash back, collecting points or miles to reduce the cost of travel and so on. Choosing by best offer usually involves taking your search one step further, whether it’s a sign-up bonus or an introductory zero-interest offer that provides a specific incentive for new cardholders.
Choosing a credit card by category
If you’re choosing a card according to category, you’re probably interested in a card with a rewards program that matches your spending habits. Today’s credit cards cover a lot of territory for different types of consumers, including:
The budget-minded shopper
You can earn cash back on everyday purchases, and more, with a cash back credit card. While some cards earn a fixed percentage on every eligible purchase, others offer tiered categories with higher rates tailored to specialty areas such as:
Seasonal shoppers whose spending habits change with the calendar might benefit from a rotating category card. This type of card earns bonus cash back rates on certain types of purchases at three-month intervals throughout the year.
The frequent traveler
If you want to earn miles and points to help offset the cost of travel, a travel rewards card should probably be at the top of your list.
Travel credit cards feature perks and benefits specifically designed to make the journey easier and more affordable, including:
- Access to private airport lounges
- Free hotel stays
- TSA PreCheck or Global Entry application fee credits
- Trip cancellation insurance
Many travel cards earn rewards on airfare, hotels and other expenses, no matter how you fly or where you stay. However, your options also include co-branded cards geared toward travelers loyal to particular airlines or hotel chains.
Bankrate Insights
If you’re worried about getting full value out of your travel credit card these days, many credit card issuers have
updated their rewards programs in response to travel restrictions and lifestyle changes. Also, some travel credit cards have adjusted their redemption policies to provide more value when you redeem rewards for non-travel purchases.
The small business owner
Business credit cards can benefit people who own or operate small businesses in a number of ways.
With a cash back card for business, you can earn a flat percentage on general purchases or a higher rate on specialty categories such as office supplies. A business travel card that earns miles or points can help you reduce your costs for airfare, hotel stays and transit.
Like travel cards, many business rewards cards also offer specialized features and benefits such as:
- Higher credit limits than consumer cards
- Tools to help you manage expenses
- Free additional cards for employees
The debt manager
Two types of credit card features specifically address debt and interest: balance transfers and introductory zero-interest offers on purchases.
You can use a balance transfer credit card to move debt from an existing credit account to the new card and, ideally, pay off the transferred debt at a lower interest rate. The best credit cards for balance transfers offer an introductory period of 0% APR that lets you temporarily avoid paying any interest.
Cards with zero-interest offers on purchases also provide a temporary window of 0% APR, making them useful for large purchases that would be difficult to pay off in a single billing cycle. Once the intro period ends, however, the APR will change to the card’s regular variable range.
Another possible option is a low-interest credit card that has a regular APR range a few points below average.
The credit-builder
Used responsibly, the right cards can help you establish a credit history and improve your credit score — all while providing a convenient and secure method of payment for all kinds of expenses. Many issuers offer credit cards for people who have less than perfect credit scores or no credit history at all. Categories for credit-builders include:
You’ll find some overlap between the no-credit-history category and the student category, since many students lack a true credit history before getting their first card. A number of student cards don’t require a credit history or a good credit score to apply.
The categories of bad credit and secured cards also overlap to an extent. A secured card requires an upfront deposit, which will then serve as your credit limit. Deposits are refundable over time as long as you’ve established a good record of on-time payments. By providing the deposit, a consumer with bad credit is essentially putting up collateral so that the issuer faces less risk in issuing the secured card.
The student
A young adult can get a head-start on life’s financial journey with a student credit card. The best credit cards for students have features tailored to this specific type of consumer, including:
- Relaxed credit requirements. You might not need a good or excellent credit score (or even a credit history at all) to qualify.
- Features designed for you. To cite just one example, how about an annual statement credit that rewards you for maintaining a high GPA?
- Less emphasis on annual fees. For someone who doesn’t yet have a career or annual income, a card that doesn’t charge an annual fee makes a lot of sense.
Choosing the best credit card offer
A credit card offer is an incentive to get a new card, or in some cases for current cardholders to stay loyal. Many credit card offers involve a sign-up bonus for new cardholders, sometimes called a welcome offer. The typical sign-up bonus is an offer of cash back, rewards points or travel miles that you earn by spending a certain amount of money within the specified timeframe after opening the account, usually 3 months. Other types of credit card offers include:
- Introductory 0% APR on purchases or balance transfers
- Earning a bonus rewards rate during your first year as a cardholder
- Discounts or statement credits on purchases from specific merchants
- A waiver of the card’s annual fee for the first year
Although sign-up bonuses are exclusive to new cardholders, credit card issuers sometimes add benefits that current cardholders are eligible for. Issuers occasionally make changes to their welcome offers and rewards programs, sometimes as part of seasonal updates and other times in response to market trends.
Sign-up bonuses and welcome offers
Here are some of the criteria you should use when considering credit card sign-up bonuses:
- Does the bonus match up well with your spending habits and your goal for getting the card in the first place? For example, choosing a card with a large travel miles bonus doesn’t make much sense unless you’re a frequent traveler or you have a specific plan to use the bonus for a long-anticipated trip.
- Do you really need a new card, considering the impact that the application will have on your credit score?
- Is the bonus proportional to the spending requirement? In other words, think about how much benefit the bonus offers relative to how much you’ll have to spend to earn it.
0% intro APR offers
When it comes to introductory interest rate offers, the first step in your selection process is focusing on the specific type of offer you’re interested in: one on new purchases or one on balance transfers. Then you can compare offers by:
- Length of introductory offer. The longer the introductory rate, the more time you have to temporarily avoid interest charges.
- Balance transfer fees, if applicable. Most credit cards charge a certain percentage of the amount being transferred, usually 3% to 5%. Although not necessarily a deal-breaker, a balance transfer fee is a cost you should take into account.
- Regular APR. The standard APR that takes effect once the intro offer expires is an important consideration. You might even think of it as extra incentive to pay off your purchases or balance transfer in a timely manner.
Bankrate Insights
Although sign-up bonuses can be lucrative,
signing up for multiple credit cards only to cancel after you’ve earned the bonus is problematic and should be avoided. Every hard pull from a credit card application temporarily lowers your credit score. Also, some credit card issuers have tightened up their rules on applications to discourage the practice.
CardSmart: What is a recommended credit score?
Credit cards available through Bankrate.com and other websites typically have a range of credit scores suggested by the card issuer. On Bankrate, a Recommended Credit Score appears with each card review and on the “best of” category pages.
Keep in mind that your credit score alone doesn’t determine whether you’ll qualify for a particular card. Your annual income, overall credit history and other factors also play a part. Although the recommended credit score can give you a better idea of your chances for qualifying, every situation (like every applicant) is unique.
If you see a card you’re interested in, make sure that your credit score falls within the range listed in the card’s recommended credit score before applying. While you can’t know your exact odds of being approved for any credit card, your chances are obviously higher with a higher credit score.
A majority of U.S. consumers have good credit scores, with the average FICO Score at 710 and the average VantageScore at 688.
| What are the credit score ranges? |
How many consumers are in them? |
| 300 – 579 – Poor |
16% |
| 580 – 669 – Fair |
17% |
| 670 – 799 – Good |
46% |
| 800 – 850 – Excellent |
21% |
Source: Experian
Taking time to check that your score matches the card’s recommended score will help ensure that you have an easier time finding the right card for you.
Learn more with Bankrate
How to apply for a credit card and get approved
Although online applications are increasingly common, you might find yourself replying to an offer you receive in the mail or in person at your bank. Whether you apply in person or online, you’ll need to remember a few tips for how to apply for a credit card.
Check your credit score
Before you start filling out applications, or even shopping around, you should find out your current credit score.
Knowing your credit score will give you a better idea of:
- Which cards you’re most likely to qualify for. On Bankrate.com, for example, each card offered by our partners has a Recommended Credit Score that you can use as a guideline.
- The APR you might be offered. The higher your credit score, the more likely you are to get a lower APR.
You can check your credit score through any of the major credit bureaus, the Fair Isaac Corporation (FICO), or possibly through your bank.
Have your information ready
The obvious blanks you’ll need to fill include:
- Name
- Date of birth
- Address
- Social Security number
You should also be ready to provide additional information such as:
- Annual income
- Monthly rent or mortgage payments
- Current bank accounts
Look for personalized or pre-qualified offers
With a pre-qualified credit card offer, you can get an idea of your chances for approval without submitting an application that will trigger a hard credit inquiry.
This kind of offer has two benefits. One is the convenience of finding out how likely you are to be approved for the card, and the other is the lack of a hard credit check. Each hard credit check will temporarily knock your credit score down a few points. The pre-qualification process involves a soft credit check, so pre-qualified offers could help you avoid minor, short-term dings to your credit score as you shop for the right card.
One way to find and compare offers is by using tools like CardMatch™. The CardMatch feature is designed to show you personalized offers from our partners that match up with your credit profile. Based on your information, you may receive special offers and pre-qualified matches. Be aware that a pre-qualified match is still not a guarantee of approval.
How long does it take to get a credit card?
The time it takes to go from application to approval to delivery can vary greatly. The response time to your application will depend on several factors, including:
- With online applications, it could take as little as a few minutes or as long as several business days to find out (business days normally being Monday through Friday)
- If you apply by mail, the issuer’s mailed response could take a week or more
- The process will take longer if you incorrectly fill out your application form or the issuer needs more information
The worst-case scenario is 30 days. Federal regulations require that once your application is complete, the issuer has 30 days to notify you of approval or denial.
Is society cashing out? Plastic-digital shift surges in COVID era
Although the notion of a cashless society hasn’t yet become a reality, the coronavirus pandemic has further shown that “yet” is still the operative word.
Bankrate.com industry analyst Ted Rossman says that health concerns and lockdown conditions spurred by COVID-19 have accelerated the movement away from in-person cash transactions. Rossman notes that this trend existed pre-pandemic, so consumer demand remains the underlying factor.
“What’s really going to drive the movement away from cash is more consumer demand for — and access to — cards, bank accounts, financial apps and other digital alternatives,” he writes in his Bankrate column “Is COVID killing cash?”
While the pandemic didn’t ignite the fire, it certainly provided more oxygen for at least one type of non-cash transaction: contactless payments. Rossman cites data from credit card issuers and payment networks comparing the popularity of contactless credit cards before and after COVID-19 emerged on the global stage:
- Between March 2019 and July 2020, the use of contactless payments grew 150 percent in the United States (Visa)
- 58 percent of Americans who have used contactless payments are more likely to use them now than before COVID-19 (American Express)
- 79 percent of consumers worldwide are now using contactless cards, with cleanliness and safety being their main concerns (Mastercard)
All in all, Rossman expects that payments for purchases both small and large will continue trending away from in-person cash transactions.
“Going cashless isn’t about switching from dipping a card to tapping a phone,” he writes. “It’s taking a transaction that used to be made with cash and making it digital.”
How we choose Bankrate’s best credit cards
Bankrate currently has expert reviews for more than 200 credit cards, which are rated using a 5-star scoring system. The most important factors we use to determine which cards appear on this page include:
APR
Affordable interest rates are essential to great credit card offers. If you ever need to carry over part of your balance from one month to another, which we advise against if at all possible, a lower APR should reduce the amount of interest you’re charged.
Rewards programs
Top programs for earning cash back, points or miles offer generous rewards rates and flexible redemption options. Some reward programs also include discounts and online shopping portals.
Introductory 0% APR offers
A zero-percent APR offer — essentially a temporary reprieve from interest — could make it much less expensive to pay off a big purchase or a balance transfer. The best offers last anywhere from 12 months to 20 months before the regular APR applies.
Fees
A low cost of ownership is another key element of the best credit cards. The total burden of fees should be low. If a card does charge an annual fee, it should also offer rewards and benefits that can help offset that cost.
User-focused value
Auto-pay options, credit-building tools, fraud protection, insurance … these and other benefits help make a credit card useful, valuable and worth having.
Essential reading for credit card users
If you’re looking for more information on how credit cards can help you reach your financial goals, check out some of our top resource articles:
The information about the Centurion® Card from American Express and J.P. Morgan Reserve Credit Card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.
Have more questions for our credit cards editors? Feel free to send us an email, find us on Facebook, or Tweet us @Bankrate.
