What makes a credit card the best? The best credit cards on the market come with plenty of perks that you can’t get with any other product. Those special perks can include things like cash-back rewards, travel insurance, and price protection. They can get you free travel, make your life easier with concierge services and better purchase return policies, or boost you into the lap of luxury with exclusive travel and dining amenities. To qualify, you usually need good to excellent credit. Furthermore, if you want to find the best offer for your unique situation, you should conduct some initial research on the best credit card offers in 2016 and what they entail. This guide divides cards into these 4 types below. Click on any one of the links to be taken straight to that section of this guide.
- Credit Cards By Best Offers: The best current promotional offers
- Credit Cards By Card Type: rewards, cash back, business, student, balance transfer
- Credit Cards By Credit Score: from excellent to bad, there are options for everyone
- Full Directory Of All Credit Cards: : search and filter our directory of over 1,600 cards
Rules for Owning the Best Credit Cards
The best credit cards on the market can become valuable tools is harnessed properly. Likewise, they can cause you a world of trouble if not handled correctly. The following rules are designed to help you avoid a number of perils while helping you maximize all of the benefits the best credit cards offer:
Rule #1: Treat credit cards like cash
If you don’t have the money to pay for your purchases, it is crucial that you continue saving until you do. If you can’t make your payments in full, you will accrue interest that will cost far more than any rewards you might earn. Only use your credit card if you have the cash in the bank to pay for your purchases.
Rule #2: Auto-pay your bill
One way to make sure your bill is never late is to set up auto-pay on your credit card for a certain day of the month. All of my credit cards are set up for auto-payment. I review my spending every month, but I don’t even have to think about when to pay my bill. It is already taken care of for me.
Rule #3: Interest rates do not matter
Yes, you read that correctly. If you adhere to rules #1 and #2 and pay your balance in full every month and on time, the interest rate your card offers will never matter. The only way interest rates matter is if you don’t pay your bill or if you already have a high balance, in which case I recommend immediately moving to one of the best balance transfer credit cards first.
Rule #4: Annual fees do not matter, up to a point
People constantly ask me how it could ever make sense to use a credit card that charges an annual fee. My reasoning is this – because you can extract a ton of value out of a rewards card, and those rewards are often worth far more than the annual fee. For example, if I spent $50,000 on a card that paid out 2% cash-back in one year, I would earn $1,000 in cash-back rewards. With most rewards card charging an annual fee of around $95, the trade-off is well worth it. With that being said, it’s important to weigh the pros and cons of paying an annual fee. While some cards offer enough value to justify it, others don’t. It’s up to you to do the math and decide.
Here are the Best Current Credit Card Offers
These are the top current offers from popular credit card issuers. The three main credit card offers are 0% APR offers, balance transfer offers, and sign-up bonus offers. We update these credit card offers on a weekly basis to ensure the information is current and that we are showing the best credit card deals.
0% Intro APR
Read our full analysis on balance transfer credit cards for all the details.
Best Credit Cards By Type
This section displays the top credit cards based on specific types. For example, if you’re looking for a great personal card, check out the rewards credit cards. This group includes a mixture of general rewards, cash back, and airline cards. Students interested in building their credit early on can quickly see the best student cards. Small business owners can find a great card by navigating to the business section. If you want to transfer a balance, you can start by looking at those cards to dig yourself out of high-interest payments.
Read more about the specifics of rewards credit cards and learn some of the strategies for using these cards to maximize your rewards. You can also check out our detailed analysis of both cash back credit cards and airline credit cards, if you’re interested in either of those types.
For a comprehensive rundown on these cards, take some time to read our inside look at best business credit cards and see how you can combine a business and personal card to max out rewards.
If you’re interested in learning more about these cards, read our detailed breakdown of balance transfer credit cards to find the best for you and get an idea of some unique strategies when using these cards.
Best Credit Cards By Credit Score
When it comes down to selecting a credit card, you should look for cards that are within range of your current credit score so you can be approved. The top rewards credit cards are only available to those with Good to Excellent credit scores. Other credit cards, both secured and unsecured, can help rebuild credit if you have fair or poor credit. If you don’t know your score, I recommend reading our article on the credit monitoring or signing up for a top credit monitoring service to get on track and stay informed.
You can get some more analysis on these cards by reading our best credit cards for bad credit guide.
Detailed Analysis on The Best Credit Cards
At The Simple Dollar, one of our goals is to provide you with the most comprehensive and useful credit card information available on the Internet. So you can make your own decisions. Our research started with over 1,600 different credit cards. We scour the internet for the best credit card deals, offers and promotions. We collect data on all the best credit cards, organized the cards by type, and present them here based on the features that matter the most. If you’re really looking for detail on what credit card to own, we have an extensive list of guides organized by type of card. These guides have all been updated for 2015. Our experts regularly update these guides and actually own many of the recommended cards.
The Simple Dollar’s Credit Card Guides
- Best Rewards Credit Cards: You have excellent credit, and want to maximize your points and benefits.
- Best Cash Back Credit Cards: You’re looking for big rewards in rotating spending categories, but might not be ready to pay an annual fee.
- Best Travel Credit Cards: You jetsetter, you. Also see: Best Airline Credit Cards, and Best Hotel Credit Cards
- Best Balance Transfer Credit Cards: You might be trying to get out of your high interest debt, or you’re just looking to get out of a bad card.
- Best Student Credit Cards: You’re a student, or a parent looking to start building your child’s credit history.
What Features Define the Best Credit Cards?
There is no one-size-fits-all description for the “ideal” rewards credit card. Since we all have different goals and desires, different cards will suit some of us better than others. Still, there are some general attributes that make certain cards stand out against the pack. Here are some of the defining features most of the top credit cards on the market have:
A Top Tier Rewards Program
Most of the top credit cards out there offer some type of rewards program. While some specific points that are tied to a hotel loyalty or frequent flyer program, others offer cash-back or flexible rewards. No matter which type is offered, the best credit cards usually come with some type of program aimed at rewarding credit card customers for their spending. Chase Ultimate Rewards and American Express Membership Rewards are among the most valuable and versatile rewards platforms.
A Large Sign-Up Bonus
Along with a rewards program, most of the best credit cards offer a sign-up bonus for customers who meet certain minimum spending requirements. Typically the “bonus” is awarded in points after a customer reaches a spending threshold of $3,000 or $5,000 within 90 days. Credit card issuers hope you will continue to use the card long after you earn the sign-up bonus, which is why they try to rope you in with this perk. Sign up bonus is relative, but I consider a good bonus to be over 40,000 points, which would typically equate to more than $400. The largest sign up bonus I’ve seen is 150,000 points!
Robust Fraud Protection
All of the best credit cards on the market offer fraud protection that shields you from liability for unauthorized purchases made with your card. Meanwhile, some cards extend this protection to cover you when you are overcharged for a product or service, or feel you were charged unfairly in some way. When you take advantage of advanced fraud protection with Chase, for example, they will temporarily remove the questionable charge from your bill while they investigate. Once they reach a decision, the charge will either be removed from your bill completely or put back on your bill with a thorough explanation of why.
Travel Insurance/Trip Cancellation Insurance
Travel insurance and trip cancellation insurance are most commonly offers as perks by the best travel rewards cards. This coverage can step in to reimburse you if your trip is cancelled due to an illness or unforeseen event, or if bad weather keeps your plane grounded and unable to take off. Filing a claim is usually painless and most credit card issuers take special care to respond promptly to all correspondence. To get your claim started, all you need to do is call the number on the back of your card and submit the required paperwork and documentation.
Auto Rental Coverage
Some credit cards offer rental car insurance coverage, although not all coverage is the same. For example, certain cards offer secondary car rental insurance, which provides coverage in conjunction with your own auto insurance. Meanwhile, some of the best credit cards offer primary rental car coverage, a top tier of coverage that precludes you from filing a claim with your own policy if you get in an accident or your rental car is damaged. A third type of coverage commonly offered, called a Collision Damage Waiver (CDW) waives the rental car company’s right to pursue you for damages in the event of rental car theft or vandalism. Different cards offer different types of coverage, and it’s up to you to know the difference.
Although the best credit cards offer a slew of obvious benefits including cash back and travel rewards, many offer a handful of hidden perks that aren’t actually advertised. You might have to dig deeper to find them, but these “extras” can truly come in handy. If used correctly, they can even help you save money, travel safer, and protect yourself from undue risk. Here are some credit card benefits not everyone knows about, and some information on how each one works:
Benefit #1: Zero Liability
Although consumer liability for fraudulent purchases made on credit is limited to $50, the best cards take that protection a step further and offer zero liability for transactions you didn’t make. If your card is lost or stolen, or if a random charge appears on your bill, you won’t be liable if you report it immediately.
Benefit #2: No Foreign Transaction Fees
Many of the best credit cards on the market charge a foreign transaction fee equal to 3% of your purchase for charges made overseas. However, some waive this fee altogether – a feature that can help you save on overseas trips.
Benefit #3: Rental Car Coverage
If you rent cars frequently, you have probably already checked to make sure your personal auto policy provides this type of coverage. However, it’s also important to check with your credit card to see if it offers this perk. While some cards only offer a secondary Collision Damage Waiver (CDW), others offer expensive primary auto rental coverage as a free perk to cardholders.
Benefit #4: A Free FICO Score
Although you can pay to get your FICO score at any time, several of the top rewards cards offer a free FICO score on your monthly statement or bill. This can save you the expense of paying to see your credit score while also helping you monitor fluctuations in your score over time.
Benefit #5: Emergency Travel Assistance
If you find yourself in a bind, it is possible your card issuer could help. That’s because many of the best rewards cards offer emergency travel assistance for individuals traveling at least 100 miles from home. No matter your emergency, customer service agents are standing by to help you get home in the event of an emergency, find lost luggage, or book alternate travel plans.
Benefit #6: Free Travel Insurance
Although benefits vary, several of the top rewards cards offer trip delay or trip cancellation insurance that will reimburse you if your itinerary is changed due to issues beyond your control. This type of insurance is most often used when a trip is cancelled due to the unexpected death of a family member, an accident occurs, or a natural disaster puts travel plans on the back burner.
Benefit #7: Extended Warranties
Many of the top cards offer extended warranties that kick in if something goes wrong outside of a qualified item’s traditional one-year manufacturer’s warranty. Depending on the circumstances, this type of coverage usually reimburses you or sends you a replacement.
Benefit #8: Price Protection
While some cards offer price protection, the most popular program is Citi’s Price Rewind. With this service, you will be automatically reimbursed for the price difference if any large item you buy and register is found at a lower price within 60 days.
Benefit #9: Roadside Assistance
If you have a card that offers roadside assistance and experience a breakdown, all you need to do is call the number on the back of your card. You’ll be charged a flat fee depending on what type of service you require, but at least you won’t be left at the mercy of your local tow truck company.
Benefit #10 Access to Cash
With Discover’s Cash Over program, you can get the cash you need without a trip to the ATM – and without paying any fees. Simply use your Discover card to check out anywhere and request cash back at the register. *This benefit is only available at participating stores.
Tips for Budgeting with Credit Cards
You might not think that credit cards and budgets can go hand in hand, but a “credit card budget” can actually work quite well. As mentioned above, the key is using your credit card as if it were cash and paying your bill in-full and on time – every single time. If you desperately want to take advantage of the perks the best credit cards offer, but are afraid it will knock your budget off track, these tips can help:
Tip #1: Create a clear and realistic written budget
If you don’t already have a budget, now is the perfect time to get started. To build a budget from scratch, you simply need to write out all of your monthly bills and expenses on a single sheet of paper. If you want to see how much you’ve spent in variable categories in the past, such as groceries or entertainment, you can also dig out the last few month’s bank statements and list all of your purchases in their corresponding categories. Use that information to draft an ideal budget that optimizes the money you earn while also leaving some wiggle room for fun.
Tip #2: Always treat your credit card like cash
In order to maximize rewards without going overboard, you need to treat your credit card like cash. Only spend what you have budgeted to spend in each predetermined category, and not a penny more. If you don’t have the cash to pay for something, don’t use credit as an excuse to justify the purchase. Only charge what you can afford to pay off each month – period.
Tip #3: Utilize online account management
The best way to stay on top of your budget and spending limits is to utilize your credit card’s online account management feature. Creating a username and password will allow you to check in with your account every day if you want. It’s easy to let your spending get away from you if you don’t watch it closely, so sign up for an online account and keep close watch on where your money is going.
Tip #4: Pay your credit card bill in-full several times per month
Another easy way to stay on budget is to pay your credit card bill multiple times each month. Doing so might sound extreme, but it can actually be quite useful. Paying as you go allows you stay in touch with how much money you’re really spending while also forcing you to part with the dollars you’ve allocated in each of your budget categories. Another bonus: Paying your card in full each month ensures that you will never pay interest on your purchases. As suggested above, you can also set your account up to pay automatically on certain days each month.
Credit Card Basics – Tips that Can Help
Signing up for any one of the best credit cards is a piece of cake, but do you know how to optimize them? Unfortunately, figuring out how to use the features your credit card offers isn’t always easy. Many times, the terms and conditions of the most lucrative perks are buried in the terms and conditions. Meanwhile, the rewards programs can be difficult to decipher, and the points, hard to redeem. If you want to get the most out of your credit cards, the first thing you should do is arm yourself with information. These tips and strategies can help you do just that:
Read your credit card’s terms and conditions
The easiest way to gain a full understanding of what your card has to offer is to read the terms and conditions front to back. Many times, a slew of interesting tidbits regarding your rewards program and perks will be hidden in there. And if you don’t read the terms, you may never know about them. The bottom line: Read your card’s terms and conditions, as well as any other applicable paperwork or information on their rewards program, if you want to fully understand all that your card has to offer.
Optimize card usage based on features
Let’s say you have a credit card that offers primary rental car coverage for free. Whenever that’s the case, you should always use that card for rental cars. Why? Because it offers coverage equal to, or better than, your own car insurance policy – and all for zero cost. Meanwhile, if you should happen to get into a wreck or take on damage, you wouldn’t even have to turn the claim into your own car insurance policy. This is just one example of how to optimize card usage based on features, but there are plenty of others. When you have more than one credit card, it often pays to use different cards for different purchases if they offer certain types of coverage you can benefit from.
Research your rewards program
I can’t tell you how many times I have heard someone complain that they had trouble redeeming their airline miles. The thing is, if they had done any type of research ahead of time, they would already know that airline miles are incredibly difficult to redeem, especially during peak travel times and within a few months of departure. This is where it pays to educate yourself. If you plan to sign up for a card that is tied to a specific program, such as an airline or hotel chain, you should first have an idea of what you would want to redeem your points for – and if it’s even possible. If you don’t want to be tied down to a specific rewards currency, you can also opt for a cash-back card, or a card that offers flexible rewards, such as the Chase Sapphire Preferred® Card.
In a world where more and more purchases are being made online, it is actually quite common for thieves to get your credit card number and use it to make a “test” purchase to see if you’re watching. This has happened me several times. Even though I watch my credit card accounts closely, I have occasionally come across a charge I didn’t make. When that happens, you need to report it to your credit card issuer immediately. Call the number on the back of your card and tell them about the fraudulent purchase. You won’t be liable for a penny if you report it immediately, and your card issuer will rectify the situation by issuing you a new card with a new account number.
Keep a Folder for Travel Documentation
When you’re traveling within your own country or abroad, you should always use a card that offers trip cancellation/trip interruption insurance as a card member perk. However, if you need to file a claim, you will be much better off if you already have all of your travel documentation in one place. In most cases, filing a travel insurance claim is free and easy – you do, however, need to have all of your documentation ready. So keep a folder on hand, and use it to store every piece of documentation you come across as you prepare to travel. You never know when you will need to file a claim, and you may be asked to present things that are hard to replicate later – paperwork like your paper boarding pass, train ticket, hotel reservation e-mail, or flight cancellation notification.
Take Advantage of Your Free FICO Score
Certain cards, like the Discover it® card, offer a free FICO score as a perk for their members. This is a great benefit that is often overlooked. To get the most out of it, keep any eye on the fluctuations in your credit score as you receive it on your statement each month. Look for huge dips in your credit score, and if that happens, try to find out why. Meanwhile, if your credit score is slowly increasing, you can rest easy with that knowledge.
Don’t Be Afraid to Get Multiple Cards
A huge misconception in the world of credit cards is that it is bad for your credit to have more than one or two cards. Because a large percentage of your credit score is based on your balance-to-limit ratio, having a large credit limit spread over several cards and a zero balance can actually be better for your credit score than just having a few cards. Meanwhile, carrying more than one card can also help you leverage the different benefits and perks that different types of rewards cards have to offer. For example, you could get a hotel card for free hotel stays and a cash-back card to help you pay for the gas to get to your destination.
Check Your Credit Report Once Per Year
In order to get the most out of your credit cards, it is essential for your credit score to remain high. That’s why it’s important to check your full credit report at least once per year. Fortunately, you can get a free copy of your credit report from the three credit reporting agencies – Experian, Equifax, and TransUnion – once per year through the government-approved site, www.AnnualCreditReport.com. once you get your free copy, take some time to read through it and ensure that all information reported is correct. According to the Federal Trade Commission, you can dispute incorrect information found on your report with any of the three credit reporting agencies. The FTC offers information on how to dispute incorrect information on their website, and offers a sample letter you can use.
Additional Credit Card Research
You will find a simplified summary of nearly two years of research in this directory. Whenever there is a change to any credit card, we are notified by the credit card issuers and we immediately update this page to reflect all new changes.
About this resource:
Created on: December 01, 2015
Updated on: May 05, 2016
Edited by: Jon Gorey
Research by: Michael Gardon