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Your Guide to Choosing the Best Credit Card

Your Guide to Choosing the Best Credit Card

*Editorial Note: This content is not provided or commissioned by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.

This article was last updated Sep 17, 2018, but some terms and conditions may have changed or are no longer available. For the most accurate and up to date information please consult the terms and conditions found on the issuer website.

If you’re having trouble finding the best credit card, you’re not alone. There are thousands of credit cards available, all providing various perks that suit consumers in different situations. Depending on your needs and wants, the best credit card for you may be a no annual fee card, secured card, travel card, cashback card or one of the numerous other types.

In this guide, we’ll discuss four steps you can take to help narrow down your search for the best credit card.

  1. Check your credit score
  2. Understand your needs: Ask important questions
  3. Evaluate the cost
  4. Compare credit cards

1. Check your credit score

Most credit cards require a certain level of credit for you to qualify for a card. The higher your credit score, the more cards you’ll qualify for and the better terms you’ll receive. Before applying for a credit card, you should check your credit score so that you know where you stand.

LendingTree, our parent company, offers access to your free credit score with My LendingTree. Besides viewing your score, you can discover factors that influence your score and actions you can take to improve your credit.

You should also review your credit report several times a year. AnnualCreditReport.com is the only authorized source for your credit report, and you can receive a free credit report from each of the major credit bureaus — Experian, Equifax and TransUnion — once every 12 months. We recommend requesting one report every four months.

2. Understand your needs: Ask important questions

To choose a credit card that will benefit you the most, you should ask important questions that can help you find the right card. Below, we list questions that you should ask during your credit card search, organized by what situation you’re in.

If you are a student, new to credit, or have limited, bad or fair credit

  • Can I build credit with this card? If you need a credit card for bad credit, or you need to improve your score, you should opt for a card that reports to the three major credit bureaus. This way, your credit activity will appear on your credit report. While credit cards from the major issuers all report to the bureaus, cards from smaller banks may not — or may only report to one.
  • Is there an annual fee? Many credit cards come with annual fees. A fee may be worth it if the benefits outweigh the cost. Before you settle on a card with an annual fee, make sure you’ll receive good value and you compare it to no-fee cards.

If you’re in debt or need of special financing

  • Is there an intro 0% APR period? If you plan on making several large purchases or completing a balance transfer, a card offering an intro 0% APR period is ideal. These cards can help you finance new purchases or provide you with the chance to get out of debt via an interest-free period.
  • What are the balance transfer fees? Most balance transfer cards charge you a balance transfer fee that’s typically 3% to 5% of the total amount you transfer. This fee is often outweighed by the amount you save from obtaining a lower rate. But you should make sure it’s worthwhile. We have a helpful balance transfer calculator that can tell you how much you can save.
  • How high is the ongoing APR? If you’re someone who carries a balance from month to month, it’s important to check the ongoing APR before you apply for a card. High APRs mean high interest charges. Look for cards with low APRs and a 0% APR introductory period.

If you want to earn rewards

  • Does the card have a rewards program? A card offering a rewards program can save you money by allowing you to redeem rewards for gift cards, statement credits, travel and more. If a card has an annual fee, the rewards program may allow you to recoup your costs.
  • How easy is it to earn rewards? If you’re looking for a simple rewards credit card, cards with rotating bonus categories, quarterly maximums or difficult redemption options may make it a hassle to earn rewards. Consider flat-rate cashback and rewards cards instead.
  • Where do I spend most of my money? When looking for a rewards card, it’s important to choose a card with rewards tailored to your spending habits. For example, if you’re a frequent traveler, choose a card with travel rewards. It doesn’t make sense to open a rewards card that primarily rewards supermarket spending if you opt for dining at restaurants.

After asking the important questions mentioned above, you should have a good idea of your needs and wants. The next step is to evaluate the costs associated with a credit card.

3. Evaluate the cost

Credit cards come with a variety of fees, including annual, balance transfer, foreign transaction and more. Depending on the type of card for which you’re looking, those fees may not be worth it. Before you apply for a credit card with one or more of those fees, review the card offering to see if the cost is minor in comparison to the perks.

If you’re looking for a …

Card to build credit

Beware of numerous fees. Credit cards designed for building credit typically have more fees than specialty cards such as rewards or cashback cards. This can be attributed to the lower credit requirements. Some fees you may come across include:

  • Annual fee
  • High interest rate
  • Account activation fee
  • Monthly service charge
  • Authorized user fee

Balance transfer card

Consider cards with no balance transfer fee. This can save you the typical 3% to 5% fee most balance transfer cards charge. For example, transferring a $2,500 balance to a card with a 5% balance transfer fee will cost you $125. With a no-fee balance transfer card, you wouldn’t incur that charge.

Rewards card

See if the perks offset the annual fee. Some of the rewards cards on our site have annual fees, but the benefits you receive as a cardholder may make up for it.

For example, the Chase Sapphire Reserve® has a $450 annual fee, but it comes with a $300-a-year reimbursement for travel purchases. That makes the effective annual fee much lower at $150. And that’s not considering the numerous other perks provided by the card.

Look for no foreign transaction fee cards. If you’re a frequent traveler and often travel outside the U.S., a card with no foreign transaction fee is essential. It’ll save you the typical 3% fee many other cards charge on purchases made abroad.

Once you’ve evaluated the cost of opening a credit card, you can compare cards to find the best one for you.

4. Compare credit cards

Credit cards can be broken down into three main categories: secured cards, intro 0% APR cards and rewards cards. Below, we list the different types of cards, their benefits and provide recommendations.

Secured cards

Some of the best cards to build or rebuild credit include secured cards. A secured card is just like a regular, unsecured card but requires a minimum security deposit to access a line of credit. Don’t worry about losing your deposit though — it’s refundable if you pay your balance in full and close your account, or if you’re transitioned to an unsecured card.

Here are some recommended cards:

  • 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, automatically. 1% unlimited cash back on all other purchases.

  • Credit line will equal your security deposit of $200 or more*

  • No annual fee, no late fee on your first late payment. No penalty APR*

Highlights
  • No Annual Fee, earn cash back, and build your credit with responsible use.
  • It’s a real credit card. You can build a credit history with the three major credit bureaus. Generally, debit and prepaid cards can't help you build a credit history.
  • Establish your credit line by providing a refundable security deposit from $200-$2500 after being approved. Bank information must be provided when submitting your deposit.
  • Automatic reviews starting at 8 months to see if we can transition you to an unsecured line of credit and return your deposit.
  • 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, automatically. Plus, earn unlimited 1% cash back on all other purchases.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score
  • We automatically match all the cash back you’ve earned at the end of your first year.
  • Receive FREE Social Security number alerts-Discover will monitor thousands of risky websites when you sign up.
  • See Rates & Fees

See additional details for Discover it® Secured

More Info

  • Monthly reporting to the three major credit bureaus

  • Auto Pay can help you stay on top of your bill

  • Use your card anywhere that accepts Mastercard®

Highlights
  • No Annual Fee, and unlike a prepaid card, it helps build credit history with monthly notifications to the credit bureaus 
  • A security deposit is required for this product (minimum $200) 
  • Pay your bill on time every month to avoid damaging your credit. Citi can help keep you on track with Auto Pay, online Bill Pay and alerts. 
  • Use the card anywhere Mastercard® is accepted — worldwide

See additional details for Citi® Secured Mastercard®

More Info

  • Build Credit When Used Responsibly

  • $49, $99, or $200

  • 26.99% (Variable)

Highlights
  • No annual fee, and all the credit building benefits with responsible card use
  • Unlike a prepaid card, it builds credit when used responsibly, with regular reporting to the 3 major credit bureaus
  • You will get an initial $200 credit line after making a security deposit of $49, $99, or $200, determined based on your creditworthiness
  • Get access to a higher credit line after making your first 5 monthly payments on time with no additional deposit needed
  • Easily manage your account 24/7 with online access, by phone or using our mobile app
  • It's a credit card accepted at millions of locations worldwide

See additional details for Capital One® Secured Mastercard®

More Info

Balance transfer or intro 0% APR cards

A balance transfer card or card offering an intro 0% APR for purchases can help you save a great deal of money if you’re debt-ridden or need to finance an upcoming purchase. During the intro 0% APR period, you won’t incur interest on your balance. Intro periods typically range between six and 21 months — providing you plenty of time to pay off your debt.

While most BT cards have balance transfer fees, there are no-fee BT cards that can save you more money than cards with BT fees.

Here are some recommended cards:

  • 0% for 18 Months*

  • Earn 5% cash back at different places each quarter up to the quarterly maximum, when you activate*

  • 13.99% - 24.99% Variable*

Highlights
  • INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
  • Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate. Plus, earn unlimited 1% cash back on all other purchases - automatically.
  • Redeem cash back any amount, any time. Rewards never expire.
  • 100% U.S. based customer service.
  • Get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
  • Receive FREE Social Security number alerts-Discover will monitor thousands of risky websites when you sign up.
  • No annual fee.
  • See Rates & Fees

See additional details for Discover it® Balance Transfer

More Info

Rewards cards

A rewards or cashback card can provide you the opportunity to earn up to six points, or 6% per dollar spent on select purchases. There are cards offering rewards in various categories including gas, grocery, travel and airline, among others. These cards often also offer great perks that may include travel and purchase protections, travel credit, auto rental insurance and more.

Here are some recommended cards:

  • Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening.

  • 3X points on travel immediately after earning your $300 travel credit. 3X points on dining at restaurants & 1 point per $1 spent on all other purchases. $0 foreign transaction fees.

  • $300 Annual Travel Credit, Airport Lounge Access, and Flexible Redemption Options

Highlights
  • Earn 50K bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
  • Named 'Best Premium Travel Credit Card' for 2018 by MONEY® Magazine
  • $300 Annual Travel Credit as reimbursement for travel purchases charged to your card each account anniversary year
  • 3X points on travel immediately after earning your $300 travel credit. 3X points on dining at restaurants & 1 point per $1 spent on all other purchases. $0 foreign transaction fees.
  • Get 50% more value when you redeem your points for travel through Chase Ultimate Rewards. For example, 50,000 points are worth $750 toward travel
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Access to 1,000+ airport lounges worldwide after an easy, one-time enrollment in Priority Pass™ Select
  • Up to $100 application fee credit for Global Entry or TSA Pre✓®

See additional details for Chase Sapphire Reserve®

More Info

  • We'll match all the Miles you've earned at the end of your first year.*

  • 1.5 Miles per $1 Spent*

  • Redeem your Miles as a statement credit towards travel purchases*

Highlights
  • INTRO OFFER: Discover will match ALL the Miles you've earned at the end of your first year, automatically. For example, if you earn 30,000 Miles, you get 60,000 Miles. That's $600 towards travel! 
  • Earn unlimited 1.5x Miles for every dollar spent on all purchases all with no annual fee. 
  • No Blackout Dates - fly any airline, stay at any hotel. 
  • Redeem your Miles as a statement credit towards travel purchases. 
  • Freeze your account in seconds with an on/off switch either on the mobile app or website to prevent new purchases, cash advances, and balance transfers. 
  • Get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more. 
  • Receive FREE Social Security number alerts-Discover will monitor thousands of risky websites when you sign up. 
  • No Annual Fee.
  • See Rates & Fees

See additional details for Discover it® Miles

More Info

  • Earn 2% cash back on purchases: 1% when you buy plus 1% as you pay

  • 0% for 18 months on Balance Transfers*

  • 15.49% - 25.49%* (Variable)

Highlights
  • Earn 2% cash back on purchases: 1% when you buy plus 1% as you pay
  • Balance Transfers do not earn cash back
  • 0% Intro APR on Balance Transfers for 18 months. After that, the variable APR will be 15.49% - 25.49% based on your creditworthiness*
  • No categories to track, no caps on cash back, no annual fee*

See additional details for Citi® Double Cash Card – 18 month BT offer

More Info

  • $200 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.*

  • 6% at U.S. supermarkets on up to $6,000 per year in purchases*

  • 3% cash back at U.S. gas stations, 1% back on other purchases*

Highlights
  • $200 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.
  • 6% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%) - that means spending $60 a week at U.S. supermarkets could earn over $180 back per year.
  • 3% cash back at U.S. gas stations. 1% cash back on other purchases.
  • Over 1.5 million more places in the U.S. started accepting American Express® Cards in 2017.
  • Cash back is received in the form of Reward Dollars that can be easily redeemed for statement credits, gift cards, and merchandise.
  • $95 annual fee.
  • Terms Apply.
  • See Rates & Fees

See additional details for Blue Cash Preferred® Card from American Express

More Info

For more card recommendations, check out our roundup of the best credit cards of 2018.


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