One of the questions I’m asked the most is, “Which credit card should I get?” There’s not a one-size-fits-all answer – the best card for you depends on factors such as whether you’re already in debt and what kinds of rewards redemptions you prefer. Here’s how to narrow it down.
There’s not a one-size-fits-all answer, but here’s how to narrow it down:
Which credit card to choose if you carry a balance
If you’re in credit card debt, then you need to prioritize your interest rate over rewards. The average credit card charges 17.30%. It doesn’t make sense to pay interest just to earn 1%, 2% or 3% in cash back or travel points.
If you have credit card debt, forget about rewards for now. You can avoid interest for up to 21 months with the right balance transfer card. And some card issuers (especially credit unions) charge ongoing (non-promotional) rates as low as the 7%-9% range. Don’t chase rewards if you’re revolving a balance (68% of credit card debtors make this mistake, according to our sister site Bankrate).
If you have credit card debt, I recommend these cards:
- Citi Simplicity® Card: 21-month 0% intro balance transfer offer; transfers must be completed in the first four months; 5% balance transfer fee ($5 minimum); 0% introductory purchase APR for 12 months; regular variable APR of 14.74%-24.74%
- Chase Slate*: 15-month 0% intro balance transfer offer; no transfer fee in first 60 days after account opening, then 5% or $5 afterward, whichever is greater; 0% introductory purchase APR for 15 months; regular variable APR of 16.49-25.24%
- Amex EveryDay® Credit Card from American Express*: 15-month 0% intro balance transfer offer; can only transfer balances in first 60 days; no transfer fee; 0% introductory purchase APR for 15 months; regular variable APR of 12.99-23.99%
- BankAmericard® credit card: 18-billing-cycle 0% intro balance transfer offer; must complete the transfer within 60 days of opening the account; 3% or $10 transfer fee, whichever is greater; introductory 0% purchase APR for 18 billing cycles; regular variable APR of 14.49-24.49%
See related: Balance transfer cards with no transfer fee
Which card to pick if you don’t have any credit card debt
Now we’re on to the fun stuff! The key questions at this juncture focus on how much effort you want to put in, how you spend your money and what you want to get out of your rewards.
Some people treat credit card rewards like a game. It’s fun for them, and they spend time looking for the best deals and juggling multiple cards. Yet about three-quarters of credit card holders prefer simplicity and would rather use the same card or two as widely as possible, we found in an August 2019 survey.
You won’t get the best rewards with that approach, but you can still do pretty well. Here are my favorite flat-rate cash back cards:
- Alliant Visa Signature Card: 2.5% cash back on every purchase with a $99 annual fee; in your first year, you earn 3% back with no annual fee
- Citi® Double Cash Card: Essentially 2% cash back on everything (technically 1% when you buy and 1% when you pay it off, with no annual fee)
If you make more than $20,000 in credit card charges in a typical year, the Alliant Credit Union Visa Signature is a better bet despite the annual fee.
Which card to pick if you’re willing to put in a little work to earn better rewards
Dividing your spending among multiple cards is the best way to reap higher returns. At this stage, you need to consider how you spend your money. Different cards incentivize different types of spending (e.g., travel, restaurants, groceries, entertainment).
You also need to think about your desired redemption. Cash back has the broadest appeal (after all, who couldn’t use a little more cash?), although travel rewards are usually the most valuable. Some 49% of U.S. adults have at least one cash back card, 20% have an airline or hotel rewards card and 19% have a general travel rewards card, our research shows.
Peak value can generally be achieved via general-purpose travel cards with transferable points programs (for example, the Chase Sapphire Reserve, the American Express® Gold Card, the Citi PremierSM Card* and the Capital One® Venture® Rewards Credit Card).
Each of these issuers has more than a dozen airline and hotel transfer partners, plus you can book an even wider variety of flights and hotels directly through the card companies. These programs provide tons of flexibility, and in terms of cents per point, they generally offer higher returns than cash back cards.
See related: Recapping the year’s best travel redemptions
As you can see, picking the right credit card for you is an individual decision. I’ll leave you with two more thoughts:
You’re doing well as long as you’re avoiding credit card debt and redeeming rewards for something that’s valuable to you.
Not everyone wants to fly to the Maldives in first-class and stay in an overwater bungalow. Even if it yields fewer cents per point, a free flight to grandma’s house or cash back on everyday purchases could make more sense for your particular situation.
You should absolutely consider sign-up bonuses when evaluating credit cards, but don’t lose sight of the fact that your credit card strategy should be a long-term pursuit. Especially if you’re new to credit, focus on ongoing value rather than card churning.
* Information about Chase Slate, Amex EveryDay Credit Card from American Express, and Citi Premier Card has been collected independently by CreditCards.com. The issuers did not provide the details, nor are they responsible for their accuracy.