Credit cards are an essential part of the American market. Not only are they a convenient way of making purchases but also an only solution in, some cases, when making purchases. A credit card, for instance, is required when renting a car or when making hotel or travel reservations. Most importantly, credit cards are much safer to carry around compared to cash.
There is no right number of credit cards an individual can possess. Nevertheless, having the best card does hinder overaccumulation. The word ‘best’ when it comes to credit cards is a relative word. It is based on which credit card suits your lifestyle, credit history, credit limit, and payment strategy.
Factors to Consider
a) Common Features
In the U.S., there are three major credit cards: Visa, Mastercard and Discovery. While Visa and Mastercard are accepted in all businesses, Discovery is not accepted in some businesses, particularly, outside of the U.S. Therefore, when choosing a credit card, you must consider a card that accepts the businesses where you make most of your purchases.
b) Credit Card Charges
Regardless of the convenience, the cost of transacting using a credit card has to be considered. Find out all the fees applicable when using the credit card and rates applied to transactions. Read the fine print before opening an account to know the financial commitment that will be required.
There are a lot of additional fees charged by Issuers and cleaver ways to avoid the trap of additional charges. For instance, making purchases using foreign currency will cost you when using some credit cards. Some credit cards charge balance transfers using credit cards while others overlook the fees under certain provisions. Therefore, you must analyze your payment strategies to determine which card is best for your financial situation.
c) Situational Issues
There are many types of credit cards. Some are specific such as travel credit cards while others are used for general purposes. If you are a frequent traveler, for example, having a travel credit card will be convenient for you because such cards have perks that make travel and transit comfortable and affordable. Issuers include benefits such as access to exclusive lounges on airports, free mileages and other subsidized costs for frequent fliers.
Eligibility varies immensely between credit card holders that is why issuers have several packages for different customers to satisfy a wider demography. For instance, a student cannot access the average credit card because of credit history limitations. For such a person, the student credit card is best. On the other hand, a person with a poor credit history will be limited to owning most credit cards. A card available to such a person demands guarantees such as deposits, as security for the issuer and higher interest charges in case of default payment.
Some cards come with irresistible benefits that add value to your money. Most rewards are in the form of cash backs, travel perks as well as redeemable miles and points. These bonuses are not only incentives to attract customers but also reduce the cost of using the credit card. However, carefully evaluating the benefits that come with a credit card will help you make informed decisions on which of the benefits are actually worth your investment.
While there are many factors affecting the desirability of a credit card, there are some features that make certain cards stand out. Here is a list of the most desirable cards this financial year.
|Best Credit Card in 2020||Minimum payment||Annual Percentage Rate (APR)||Introductory Interest Rates||Loyalty Points/ Rewards||Cash Backs|
|Discover It® Miles||Whichever is greater between $20 and 3% of full balance in addition to any Past arrears||APR on Purchases: 11.99% – 22.99% APR on Balance Transfers:||0% APR on purchases for 14 months 10.99% APR on balance transfers for 14 months||1.5 miles per dollar spent on all purchases||N/A|
|Chase Sapphire Preferred® Card||The larger of $35 or total amount billed if cost is less than $35||APR on Purchases 15.49% —26.49% APR on Balance Transfers: 15.49% — 26.49%||N/A||60,000 points are worth $750||N/A|
|Citi Simplicity® Card||1.5% of the new balance (rounded off to the nearest dollar)||APR on Purchases: 14.74% — 24.74% APR on Balance Transfers: 14.74% – 24.74%||0% APR on purchases for the first 12 months after account opening 0% APR on balance transfer for the first 21 months after account opening||N/A||N/A|
|Blue Cash Preferred® Card||Calculated using the Average daily balance plus new purchases||APR on Purchases: 12.99% to 23.99% APR on Balance Transfers: 12.99% to 23.99%||0% APR on purchases and balance transfers in the first 12 months||N/A||6% cash back for spending on U.S supermarkets 6% cash back for U.S streaming subscriptions 3% cash back for transit costs 3% cash back for spending at a U.S gas station 1% cash back on other purchases|
|Capital One® Quicksilver® Cash Rewards Credit Card||N/A||APR on Purchases: 15.49% – 25.49% APR on Balance Transfers: 15.49% – 25.49%||0% APR on purchases and balance transfers for the first 15 months from account opening||$150 bonus for $500 worth expenditure 3 months after account opening||Unlimited 1.5% cash back on all purchases|
|Capital One® Spark® Cash for Business||$15 or greater than $15 or 1% of your balance in addition to late fees and late||APR on Purchases: 20.99% (Varies based on Prime Rate) APR on Balance Transfers: 20.99% (Varies based on Prime Rate)||$0 charge for annual fee for the first tear after account opening||Earn $500 when you spend $4500 three months after account opening||2% unlimited cash back|
|American Express Cash Magnet® Card||N/A||APR on Purchases: 12.99% – 23.99% APR on Balance Transfers: 12.99% – 23.99%||0% APR for the first 15 months after account opening||Earn $150 by spending $1,000 three months after account opening||1.5% unlimited cash back|
|Wells Fargo Propel American Express® Card||N/A||APR on Purchases: 13.99%- 25.99% APR on Balance Transfers: 13.99% – 25.99%||0% APR on purchases and balance transfers for the first 12 months after account opening 20,000 points for spending $1,000 within the first 3 months after account opening||3X points for spending on U.S. gas stations, U.S. streaming services, hotels, travel and transit, homestays as well as ordering in or dining out. 1X points for all other purchases|
1. Discover It® Miles
The Discover It® Miles card is an excellent choice for budget-minded infrequent travelers. As the card’s name suggests, the user gets to collect miles on every purchase while traveling. At the end of the year, Discover matches all the miles earned.
For instance, when you make 10,000 miles discovery increases it to 20,000 miles reducing your cost of travel. Additionally, you earn 1.5 miles for every $1 purchase. You can redeem the miles for cash backs or use them to pay for your travel costs.
Furthermore, the APR rate on purchases for the first 14 months is 0% while the ongoing ARP charges are regular (varying from 11.99% – 22.99%). You will also be charged an interest rate of 10.99% for balance transfers. The card has no annual fees or foreign transaction fees.
- Flexible redemption options
For every 1.5 miles earned is worth 1$. Additionally, you gain 1 cent for spending made while travelling with this card. Costs covered include hotel costs, car rentals, travel agents, online travel sites as well as commuting costs. Charges must be made within 180 days to be converted to miles. You can convert the miles earned to cash as a direct deposit.
- There are no restrictions on miles redemption amount. In fact, you can redeem as low as one mile gained with this card.
- You will earn 3 miles per dollar Spent in the First Year
After acquiring the card, Discovery will match the miles earned at the end of the year. The worth of this bonus offer is $1 for every 3 miles gained in the first year.
- Travel interest-free for the first 14 months due to 0% APR.
- Enjoy transacting with foreign currency at no extra cost
- Unlike Visa and Mastercard, Discovery does not have a big grip on the international market.
- The card’s low reward rates is discouraging for big spenders
Without annual fee charges, the Discover it® Miles cannot offer higher rewards. That is why the card is attractive for budget-friendly travelers who do not want to incur overhead costs.
- Discover it® Miles card has low reward flexibility limiting opportunities for additional incentives.
2. Chase Sapphire Preferred® Card
The Chase Sapphire Preferred® Card is ideal for both occasional and frequent travelers. Aside from being popular with travelers, the card also offers one of the top flexible point currencies – the Ultimate Reward points. You can redeem these points for additional value – from travel perks offered by travel partners to discounted costs on selected items. Additionally, every dollar spent on traveling or purchase earns you 2 points.
However, the card charges an annual fee of $95. Nevertheless, this can be offset by continued spending and redeeming the points accrued. Furthermore, you gain an introductory bonus of 60,000 points after spending $4,000 in the first 3 months after account opening. The credit card’s variable APR for purchases and balance transfers ranges from 5.49% – 26.49%.
- The 60,000 points are worth $750 giving you 25% more value.
- Depending on how you spend your bonus points, you can get $1,200 worth of value from travel partners because each point is worth 2 cents amounting to $1,200.
- You get three extra points for using Lyft rides earning you a total of 5 free points for every dollar spent on the ride.
- Enjoy having foreign transactions without incurring extra costs.
- Issuers have partnered with DoorPass, DoorDash offering free delivery and subsidized delivery costs on selected purchases above $12. The benefit can be enjoyed for a minimum of one year.
- While the card is essentially a travelling card, it can be used as a cash-back card as well. You can redeem the points earned for cash and deposit it to your bank or statement credits. The redeemed points can also be used to purchase products on Amazon.com.
- The card offers primary car rental insurance and comes with a $500 trip delay insurance as well as a $10,000 worth trip cancellation Insurance. There is also a luggage delay cover which extends up to 5 days and is worth $100 per day. Lost luggage cover has a maximum worth of $3,000. The card offers up to $500 per claim of purchase protection and up to $50,000 per account regarding purchase protection.
- The $95 annual fee is a burden
- The card requires excellent credit history.
- There is no introductory APR on purchases and balance transfers making the card feasible for people who pay their balance on a monthly basis and have no credit balances on other credit cards.
3. Citi Simplicity® Card
The Citi Simplicity® Card is ideal for offsetting high-interest debts. The card offers an extensive introductory period on balance transfers providing ample time to pay credit card debt. When you transfer your debt to this card, you get a 21–month period to settle the debt. The card does not charge annual fees and a regular APR rate is applied ranging from 14.74% to 24.74% based on your creditworthiness. A balance transfer fee of $5 or 5% of the amount transferred (the amount that is greater) is applied for every transfer.
- The Citi Simplicity® Card has no late payment charges and no penalty fees in addition to the zero annual fee charges.
- There is no balance transfer fee for the first 21 months after account opening. Most cards give an initial grace period of 12 to 15 months.
- There is no APR fee for the first 12 months
- No liability is incurred for unauthorized charges such as fraudulent purchases by thieves.
- The card has enhanced security; aside from the built-in EMV chip technology, members are covered by Identity Theft Solutions to secure payments.
- You get up to $10,000 worth of insurance coverage each year.
- You also get one extra year of warranty for items with a five-year warranty or less
- The card does not have any cash back offers
- There is a 3% foreign transaction fee applied to transactions made abroad or in foreign currency.
- A 3% balance transfer fee is applied after 21 months of application
4. Blue Cash Preferred® Card
The Blue Cash Preferred® Card is the best card for shopping in U.S supermarkets and U.S. department stores and gas station spending. Buyers get good rewards on purchases from selected stores.
You will get 6% worth of cash backs when purchasing at a U.S. supermarket and 6% worth of cash backs when you choose U.S. streaming subscriptions. You get 3% cash backs when you refill at a U.S gas station or while on transit and 1% worth of cash backs for general purchases.
The card also offers a $250 introductory bonus when you make purchases worth $1,000 in the first 3 months after account opening. An annual fee of $95 along with a variable APR ranging from 12.99% to 23.99% charged depending on your credit score are incurred from using the card. There is 0% introductory APR and balance transfers for the first 12 months of card use.
$406 average yearly reward value is given for purchases above $1,325 per month.
- The card has no rotating categories or enrollments
- It grants a 2-day free shipping bonus on specified items on over 100 online stores with ShopRunner
- Offers for gift cards or merchandise are given occasionally
- You can redeem points for previous purchases
- The card imposes a 2.7% transaction fee after conversion to dollars.
- $95 Annual fee which can be acquired from cash backs is also charged. However, you will need to spend more than $1,100 per year to offset the annual fee with cash backs.
5. Capital One® Quicksilver® Cash Rewards Credit Card
The Capital One® Quicksilver® Cash Rewards Credit Card is ideal for steady cash backs and unlimited spending. The card stands out because of its introductory bonus. The card offers an introductory bonus worth $150 for $500 worth of expenditure within the first 3 months of card acquisition. There is also a 0% APR for the first 15 months. In addition to this, there are no annual fees and foreign transaction fees. You also get a 1.5% cash back for all purchases daily. A regular APR on purchases and balance transfers ranging between 15.49% to 25.49% is applied after the bonus period is over. The APR rate applied depends on your credit score.
- A generous welcome bonus
- No rotating categories or sign-ups to earn cash rewards
- Offers good interest-free deals on balance transfers and purchases
- Easy way to earn and redeem your earned cash back
- A 3% transferable fee is applied after the first 15 months on transferred balances.
- Lower earning rate compared to other flat-rate cash back credit cards
- Requires a good credit score
6. Capital One® Spark® Cash for Business
The Capital One® Spark® Cash for Business is an ideal card for small businesses. You get 2% cash back on all purchases. You will also get $500 after spending $4500 during the first 3 months after account opening. The card’s annual fee is $95. Despite the high amount, your business can offset this payment by increasing spending. You also get to enjoy 0% APR in the first year of card use. A variable APR rate of 20.99% (which fluctuates depending on prime rate) is applied after the first year.
- No expiration date on cash back
- Availability of purchase records from software such as Quicken, Quickbooks as well asExcel
- No foreign transaction fees
- Points can be redeemed for gift cards, gratuity or cash back
- High reward rates
- There is no limit on the amount of redeemable cash back
- You can automate the threshold to receive cash back
- High APR rate
- A $95 annual fee
7. American Express Cash Magnet® Card
The American Express Cash Magnet Card is renowned for the excellent rewards it offers. The card offers 0% APR and $0 balance transfer fees for the first 15 months of card ownership. An APR varying from 12.99% to 23.99% is applied thereafter. The card has no annual fee and earns you $150 for spending worth $1,000 or more 3 months after account opening. Members also get 1.5% cash back for all purchases made.
- A convenient flat-rate card with no thresholds, spending caps and categories on cash backs and rewards.
- Balances can be transferred from other high-interest cards
- The card gives unlimited 1.5% cash back
There is also provision for car rental loss and damage insurance coverage
- The card is a tiered-rate card option.
- There is a minimum redemption threshold worth $25.
8. Wells Fargo Propel American Express® Card
The Wells Fargo Propel American Express is one of the best reward cards in the market. Although most of its rewards are standard, it offers a few exceptional perks. With this card, you will earn 20,000 introductory bonus points when you spend $1,000 in the first 3 months after account opening. The points are worth 1 cent but can be increased to 1.5 cents by pairing this card with the Fargo® Visa Signature® Credit Card and get 50% worth of value when you redeem your points for travel.
Spending on restaurants, hotels, U.S. gas stations, carshares, airfare, transit and streaming services will earn you 3X points. The card does not charge an annual fee or foreign transaction fees. The card also gives free ARP on purchases for 12 months after account opening. Regular APR rate ranges from 13.99% to 25.99%.
- The introductory bonus points have a cash redemption value worth $200
- There is no annual fee or foreign currency transaction fees reducing credit cost.
- There is no cap on the number of points you can earn.
- The reward points have no expiry date until you close your account.
- Has a generous 3X bonus rate gained by spending on specified categories
- Free introductory period on purchases and balance transfers for the first 12 months after account opening.
- High regular APR
- Short APR offer
Our list has the top credit cards in 2020. However, each has its pros and cons. It is essential to understand how each works. Select the one that offers the best services, depending on your needs.