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Best Credit Cards Of 2022: Reviews, Rewards & Offers
Forbes Advisor. Commissions do not affect our editors’ opinions or
evaluations.
No single credit card is the best option for every family,
every purchase or every budget. For this reason, Forbes Advisor has
chosen the best credit cards in a way designed to be the most helpful to
the widest variety of readers. Rather than selecting the “best credit
card” and ranking the next nine options, we highlighted the best cards
for a variety of situations. The star ratings highlighted below
show the card’s rating for its specific category. The global star rating
can be found on the card review.
This list contains only personal credit cards. If you’re looking for a credit card for your business, consider our list of the best business credit cards.
Methodology
In order to determine the best credit cards for each
category, we considered the costs and benefits of each credit card.
Costs of each credit card include: the annual fee, foreign transaction
fee and the required spending to qualify for the welcome offer. Benefits
include the welcome offer, cash rewards or other rewards, bonus
category offers, balance transfer offers, status benefits and other
perks.
In addition, each category of credit card has its own criteria. For
travel rewards cards we also considered how much value you can expect to
get out of your points and miles when you redeem them.
For cards meant for those who are trying to build credit or improve
their credit score, we focused on credit card offers that offer the most
opportunities to improve your credit for the lowest net cost.
For balance transfer cards we looked at the length of 0% APR and the variable APR after the bonus period ended.
The Best Credit Cards of 2022
How Does a Credit Card Work?
A credit card can be used to make a purchase of goods or
services in-person or online. When you apply for and are approved for a
credit card, you’re given a line of credit based on your credit score
and other factors like your income.
A potential advantage to using a credit card over paying cash or a
debit card is that a credit card can function like a short-term loan. By
using a credit card, you’ll have until the end of the credit card
billing period to pay back from your bank account what you charged to
the card. You can also earn rewards like cash back or travel rewards
with some types of cards, along with extras like purchase and travel
protections. The downside is that if you don’t pay the entire amount
that you charged to your card, you’ll accrue interest on your purchases
which can be expensive over time.
How Do Credit Card Rewards Work?
When you make a purchase on a rewards credit card, you’ll earn a
percentage back on your spending as either cash back, points or miles
depending on the type of card and what type of rewards it’s offering.
Airline credit cards, for example, will typically earn miles, cash back
cards will earn you cash back and general purpose rewards cards may earn
points that can be used for things like a statement credit or to redeem
for travel, merchandise or other options.
Some rewards credit cards will earn the same flat rate back on all
spending, like a card that earns 2% back on every purchase. Others will
have tiered rewards where a certain type of purchase, like gas or
groceries, may earn at a higher reward rate than other types of
purchases. Before choosing a rewards card it’s important to consider
your spending habits and the type of rewards you think you’ll get the
most benefit from and then compare that to the various options available
to you.
How Does Credit Card Interest Work?
Most credit cards calculate interest
using the average daily balance method, which means your interest is
compounded and accumulates every day, based on your daily rate of
interest. In other words, every day your finance charges are based on
the balance from the day before.
The daily rate of interest is determined by dividing your card’s APR
by 365 to find the daily rate of interest and then multiplying that
number by your balance. For example, to determine the average daily
balance on a card with a $10,000 balance on the first day of the billing
cycle and an APR of 17%, you’d divide 17 by 365, which equals a daily
rate of 0.0466%. This means the next day, your card would have a balance
of $10,004.66, which is what you get when you multiply the balance of
$10,000 by 0.000466.
Since the average daily balance is compounded, every day the calculation is based on the day before.
APR vs. APY vs. Interest
APR is a card’s annual percentage rate over the course of a year. A
balance of $10,000 with an APR of 17% would accumulate $1,700 in
interest. But since most credit cards use an average daily balance
method to calculate interest, it can be an incomplete view to look at a
card’s APR and try to estimate how much you’d pay in interest.
APY is not a term typically applied to credit cards as it refers to
the amount of interest you’d earn over the course of a year on things
like deposit accounts such as savings accounts and certificates of
deposit (CDs).
In other words, APR refers to the amount of interest you’d pay on a
credit card balance or other line of credit and APY refers to the amount
of interest you can earn on a deposit account.
How to Improve Your Credit Score
There are several steps you can take to try to improve your credit score.
First, check your credit report to make sure there aren’t any errors
that could be having an adverse effect. Paying your bills on time, every
time will have the single biggest impact on your score. After payment
history, the next biggest factor in your credit score is the amount of
debt you have. Since credit reporting agencies don’t have your income
information, they use something called “credit utilization” instead of a
debt-to-income ratio.
Credit utilization is the amount of debt you owe relative to the
amount of credit you have. So if you have a balance of $3,000 on a card
with a $10,000 limit, you’re using 30% of your credit. Total credit
utilization is based on the aggregate amount across all your lines of
credit, both what you owe and how much you have available. It’s
typically suggested that utilization of 30% or below should be the goal.
Credit Cards for Good Credit
What is considered a good credit score
can vary among lenders, and you typically aren’t told what a particular
lender’s exact cutoff point is between a good credit score and a bad
one. However FICO, the most widely known credit scoring model, shares
some helpful information you can use as a guide. The most common FICO
scores feature a scale of 300 to 850. On that scale, a credit score
between 670 and 739 is generally considered “good.”
You can check out Forbes Advisor’s list of best cards for good credit to see what might work for your particular circumstances.
Credit Cards for Fair Credit
The definition of a fair credit score varies among lenders, and you
typically aren’t told what a particular lender’s exact cutoff point is
between a good credit score and a fair one. However FICO, the most
widely known credit scoring model, shares some helpful information you
can use as a guide. The most common FICO scores feature a scale of 300
to 850. On that scale, a credit score between 580 and 669 is generally
considered fair.
You can check out Forbes Advisor’s list of best cards for fair credit to see what might be a fit for your particular circumstances.
Credit Cards for Bad Credit
While there’s no exact number that counts as the threshold between
“bad” and “good” credit, generally a FICO score below 580 is considered
very poor and between 580 and 669 is generally considered fair.
The lower your credit score, the more limited your options when it
comes to credit cards. Someone with bad credit will typically only be
able to get approved for a secured card or a card with
higher-than-average interest rates and other additional fees. See Forbes
Advisor’s list of best credit cards for bad credit to see what some of the options are if your credit isn’t stellar.
What Are the Three Credit Bureaus?
There are three credit reporting agencies in the U.S.:
- Experian
- Equifax
- TransUnion
Each of these agencies may use a slightly different method of
reporting your credit behavior so it’s not uncommon to have a slightly
different credit score with each agency. All three companies serve the
same function: to analyze your credit behavior to generate a three-digit
credit score used to determine your creditworthiness and in turn, the
rates you’ll be offered on loans like a credit card or a mortgage.
Types of Credit Cards
Although all credit cards can be used to make purchases, there
are several different types of credit cards, each designed for a
different goal.
Rewards Credit Cards
A rewards credit card
is one that earns a percentage back on your spending, in the form of
cash back, points or miles. The exact amount you’ll earn back can vary
greatly by card with some earning the same flat rate back on all of your
spending and others offering tiered rewards with certain purchase
categories earning elevated rates over other categories.
Balance Transfer Credit Cards
A balance transfer card
is one that offers a low or 0% APR for transfers made to the card for
an introductory period of time. After that introductory period, the
card’s standard variable APR will typically apply. There may be a
balance transfer fee to shift debt to a balance transfer card, usually
3% to 5% of the amount being transferred.
Low Interest Credit Cards
A low interest credit card is one that has a low ongoing interest
rate, typically far lower than the industry average APR on other cards.
For those who typically carry a balance on their cards, this may be a
more beneficial option since over time, the interest charges will be
less than on a card with a higher interest rate.
This is different from a card with a 0% APR in that a low interest
card’s rate is ongoing and doesn’t expire after a promotional period.
0% APR Credit Cards
A 0% APR credit card
is one that offers an introductory 0% interest period on either
purchases, balance transfers or both. Think of a 0% APR offer like an
interest-free loan with an expiration date. If used responsibly, it can
give you a cushion of time to pay off what you owe, without accumulating
additional finance charges. But also be aware that the zero-interest
period of time doesn’t last forever and when it expires your balance
will accrue interest at the card’s standard variable rate.
Student Credit Cards
College student credit cards aren’t actually different from other
credit cards, they’re just marketed towards college students or others
with thin credit files who may otherwise have a challenging time being
approved for a credit card.
A student credit card,
which is a first credit card for many, will typically have more
forgiving underwriting standards than a card designed for those with
good credit. This means you’re likely to qualify with a lower credit
score than the standard version of the card would require. Some college
credit cards even offer some perks like rewards and cash bonuses for
good grades.
Credit Cards to Build Credit
When you’re just starting out with credit or you’re seeking to move
past credit missteps, there are credit cards aimed at helping you prove
responsible payment behavior, and in turn boost your credit profile. The
best starter credit card
for you will provide a balance between benefits, such as reporting to
the credit bureaus and helping to raise your credit score, and costs to
carry, including annual fees or any other maintenance costs.
Business Credit Cards
A business credit card
can be a great way to separate your personal expenses from your work
ones, even if it’s just a part-time gig. When you apply for a business
credit card, your approval will be based on your personal credit score.
It also means you’ll be personally liable for any debts accrued on the
card even if they’re from your business and that business fails. The
issuer will also take other factors into consideration when reviewing
your application, including your business income and credit history.
How to Choose a Credit Card
Choosing the right credit card for your particular circumstances
should be based on a combination of factors including your credit
score, your tolerance for annual fees, what perks you might be seeking
and how any rewards fit with your spending habits.
Annual Fee
Not all credit cards charge an annual fee but many of those that do will offer rich rewards and other perks in return.
Other Fees
Depending on your goals in acquiring a new credit card, be aware of
any other fees associated with owning a particular card. For example, if
you’re looking for a card to shift a balance to, be sure to factor in
any balance transfer fees. Those with not-so-great credit may find that
some options available to them charge account opening fees or credit
limit request fees in addition to any annual fees. Steer clear of those,
if possible.
Interest Rates
For those who think they might carry a balance, even if it’s just
occasionally, be aware of the APR on any card you’re considering.
Carrying a balance for any length of time on a credit card is expensive
and you don’t want to be socked with a ballooning balance over time.
Rewards
If a card offers rewards on your spending, make sure that the areas
where it offers the best rewards are a match for your spending habits.
Someone without a car is unlikely to benefit from high rewards on gas,
for example.
While those who rarely dine out or get take-out will likely fare
better with a card that offers elevated rewards on groceries rather than
dining.
Perks
Many credit cards offer perks and benefits beyond the ability to earn
rewards. Premium travel cards may offer exclusive airport lounge
access, free checked baggage and airline incidental credits. Many cards
on the market offer other perks like extended warranty protections and
other travel protections and insurances. Even cards without an annual
fee may offer several money-saving benefits.
Credit-Building Help
Cards aimed at helping you shore up your credit profile, like secured
cards, work by reporting your on-time payment behavior to the credit
bureaus so that over time, your score can improve with a record of
positive payment history. There are many cards on the market aimed at
those seeking to boost their profile. The best ones charge little to no
annual fee and don’t carry account opening or other unnecessary fees.
There are some unsecured cards available too, although these tend to be
unavailable to those with a recent bankruptcy.
What Credit Card Should I Get?
Different types of credit card users will benefit most from different
types of credit cards. Here are some tips to help you decide what’s
best for you.
Value Shoppers
Value Shoppers will likely benefit most from cash back cards that
provide rewards on everyday purchases. These cardholders will want to
minimize annual fees and aren’t concerned about travel rewards or high
end perks. Check out the best cards for shopping and best cards for
groceries to learn more.
Travelers
The best credit card for travelers will vary based on the kind of
traveler you are. If you like to play license plate ABC, check out our
best cards for road trips. If you prefer your travels at 35,000 feet,
check out the best airline credit cards.
Credit Builders
When you’re just starting out it can feel like a Catch-22. You need
good credit to get a credit card, but you need a credit card to build
good credit. Fortunately there are some cards out there that are good
for both those starting out and those needing to get back on track. Check our best first credit cards and best cards for rebuilding credit lists to learn more.
Students
College students have a plethora of credit card options because the
banks understand the value of a lifetime customer. Many of these cards
act as little siblings to their rewards card brothers, giving students a
chance to earn rewards without needing as much of a credit history.
Check out these best credit cards for students.
Business Owners
Whether it’s a roadside stand or a shop on Etsy, small businesses
have unique credit needs. Business credit cards offer benefits tailored
to commerce and offer a way to keep personal and business expenses
separate. If you are just starting out, one of our best cards for new
businesses may do the trick. If you operate an established business,
even if it’s a side hustle, check out our best business credit cards
list to learn about your options.
Brand Loyalists
If you only stay at Hyatt or only shop at Pottery Barn, it may make
sense for you to pick up a co-branded credit card for that store,
airline or hotel chain. By doing so you’ll earn points and perks within
their ecosystem, which you can then use to further your love of the
brand.
Credit Card Application
In general, there are several steps to applying for a credit card:
First, check your credit score through a credit card issuer or by
ordering it from one of the three main credit agencies. Once you know
where you stand with your credit score, decide which type of card will
be the best for you based on what you’re planning to use it for. Credit
cards typically fall into one of three categories: rewards, low APR or
credit-building.
Next, check to see if you’re pre-qualified. Many issuers, including
American Express, Bank of America, Capital One, Chase, Citibank, Deserve
and Discover will let you check to see if you’re pre-qualified for any
of their cards. Keep in mind that pre-qualification doesn’t ensure
approval.
Choosing the right card may be difficult, but applying for the card
you’ve chosen is easy. Most cards can be applied for online, although
you can go to the issuing bank and apply in person or call them on the
phone. If you’re approved, the next step is to make sure you understand
the card’s terms and conditions, listed in the fine print of the
cardmember agreement.
How Many Credit Cards Should I Have?
There’s no one right number of credit cards to have. That’s
because everyone’s financial profile and goals are unique to their
particular circumstances. Having multiple credit cards can either be a
boon or a bust depending on how you acquire and use the cards.
Advantages to Having Multiple Credit Cards
Having more than one or two credit cards can be a good fit for most
people as a credit card allows you to establish credit history. A good
credit history over time will save you money as it can help you qualify
for lower rates on other types of loans, like mortgages, auto loans or
student loans. Since many rewards cards offer tiered rewards in
different areas of spending, for someone with a careful strategy of pairing rewards cards, it can be more beneficial than just one card.
Disadvantages to Having Multiple Credit Cards
Too many credit cards can entice you to overspend and take on more
debt than you can handle. And if you’re considering adding more credit
cards to your portfolio, keep in mind that every time you apply for a
credit card, the issuer will run a credit check to determine whether or
not to approve you. This can ding your score.
And, some issuers will turn you down if you apply for too many cards in too short a period of time.
But for someone who can pay their bills in full and on time, and doesn’t
mind the effort of juggling multiple cards, owning several cards can be
part of a plan that works for them.
Credit Card Companies
Credit Card Issuer
A credit card issuer is the bank that issues, or approves you for,
the card you’re applying for. Some credit cards have the issuing bank as
part of their name, like Chase or Citibank. Others work behind the
scenes as the issuing bank for credit cards that may not be part of a
traditional financial institution, like Chime or Upgrade.
Credit Card Networks
Card networks process the payments between the buyer and the
merchant. There are four major credit card networks: Mastercard, Visa,
American Express and Discover. American Express and Discover are unique
in that they are also card issuing companies in addition to owning a
card network.
Co-branded Credit Cards
A credit card that’s co-branded is one that’s issued in partnership
with a certain retailer or service provider. Popular brands like
JetBlue, Hyatt and Disney have all partnered with credit card companies
to offer cards that earn rewards in their loyalty programs and offer
brand specific perks. Typically a co-branded credit card will offer
rewards and or other perks within the brand.
Visa vs. Mastercard
Both Visa and Mastercard are payment processing networks and it
shouldn’t matter to you as a consumer which one your card is on when it
comes to making a payment. But both cards offer perks and benefits
specific to their brand and type of card within the brand. For example, a
traditional Visa or Visa Platinum card may offer roadside dispatch
services and lost card replacement assistance. A Visa Signature card may
offer these benefits plus travel insurances and protections. Each
individual Visa card will come with different benefits based on the type of Visa and the perks selected by the issuing bank to include.
The same holds true for Mastercard: There are different types of Mastercards
with varying perks and benefits depending on the type of Mastercard.
The most notable feature some Mastercards offer that some Visas don’t is
cell phone coverage. You shouldn’t choose a card based on the issuing
network however. Instead think of any extras offered by the payment
networks as a bonus, with the focus on the main features of the card
itself.
To view rates and fees for Blue Cash Preferred® Card from American Express please visit this page.
To view rates and fees for The Platinum Card® from American Express please visit this page.
Frequently Asked Questions (FAQs)
How old do you have to be to get a credit card?
You have to be at least 18 years old to get a credit card in the
U.S. The law requires those who apply to have a source of income to
demonstrate that they can pay back any amount they might charge to a
card. But, sometimes those younger than that can be added as an
authorized user on a parent or trusted adult’s credit card. Some issuers
have a minimum age requirement to be an authorized user, others do not.
How to Cancel a Credit Card
To cancel a credit card, you can contact the issuer and ask them
to close the account. You’ll have to pay off any outstanding balance in
full before the account can be closed. Keep in mind that closing a
credit card can have an adverse impact on overall credit score. If
you’re thinking about closing a card that you’ve held for a long time,
your credit history makes up a portion of your score so closing it can
ding your credit.
You may want to consider asking the issuer if you can do a product change to a card without an annual fee or to one that’s a better fit for your spending patterns.
How to Pay Off Credit Card Debt
There are multiple ways to get a handle on your credit card debt.
The right one for you will depend on your budget and goals. The debt snowball and debt avalanche
methods are two commonly used ways to pay down debt. With the debt
snowball method you make the minimum payment on each card. Then you put
any additional money you have toward the card with the smallest balance.
Instead of looking at each card’s interest rate, you focus just on the
outstanding balance. The theory is that by focusing on the smallest
balance first, you’ll pay it off quickly.
The debt avalanche method the focus shifts from the smallest balance
to the highest interest rate. All extra funds above the minimum payment
go to the card with the highest interest rate. Once paid in full, money
is then directed to the card with the next highest interest rate.
Other options to help pay down credit card debt include shifting the
balance to a card with an introductory 0% APR balance transfer offer,
taking out a personal loan or in more challenging circumstances, asking
your issuer for help with a debt repayment plan.
How long does it take to get a credit card?
When you apply for a credit card online or in person, you’ll
typically find out within minutes if you’re approved. Some issuers will
provide you with an instant card number so you can begin to use your new account ASAP. But getting the physical card in the mail can take a few days.
What is APR on a credit card?
APR is a credit card’s annual percentage rate over the course of a
year. But since most credit cards use an average daily balance method
to calculate interest, it can be somewhat misleading to see your card’s
APR and figure out what you might owe easily. Most credit cards
calculate interest using the average daily balance method, which means
your interest is compounded and accumulates every day, based on your
daily rate of interest. In other words, every day your finance charges
are based on the balance from the day before.
How much of my credit card should I use?
The balance you carry on a credit card should be no more than 30
percent of your credit limit if you want to avoid a drop in your credit
score. The percent you carry of an open balance, called utilization,
gives your credit card company an easy way to track your credit
health. For instance, if you have a $10,000 credit limit, it’s a
good idea not to put more than a $3,000 monthly balance on the card. Of
course the best idea is to pay the card off every month to avoid
interest fees.
How do I increase my credit limit?
If you want a credit limit increase,
the easiest way to request it is to call the number on the back of your
credit card. As a general rule, banks want you to have the card
open for six months or more with a stable repayment record before they
consider a credit limit increase.
How do I get cash from a credit card?
Depending on the card you have, you can get a cash advance from either a bank branch or an ATM. Some balance transfer offers will also allow you to get cash deposited directly into your checking account.
How do I buy bitcoin with a Credit Card?
It is possible to buy bitcoin or other cryptocurrencies with some types of credit cards,
but the stipulations vary greatly depending on the card issuer and are
subject to change at any time. Even when you are allowed to buy crypto
on a credit card, it may not be a good idea because you might be charged
cash advance fees from your bank in addition to being charged a fee
from the crypto exchange. A better option might be a card that
offers rewards in cryptocurrency such as the Crypto.com Rewards Visa.
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