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FIND THE RIGHT CARD FOR EVERY SITUATION
Our Top Credit Card Picks for 2020
By Kelly Dilworth
If you’re in the market for a new card, it’s a great time to be looking. As credit card issuers continue to top one another with tantalizing rewards and hefty sign-up bonuses, consumers are being deluged with generous options, just for signing up. It’s tough to determine which credit card is best because there are so many great options.
Is a travel credit card with bonus miles the best option or is the best credit card the one that gives me the biggest cash bonus? In the end, the right credit card is the one that works best for you.
To help you narrow your choices, we’ve rounded up four of the buzziest credit cards on the market and taken a closer look at what makes these credit cards so rewarding.
Some of the credit cards we’ve chosen are beloved by rewards chasers because they offer a ton of value in exchange for a big annual fee. Others offer the more casual credit card users the ability to earn an impressive amount of cash back rewards just by charging everyday purchases.
Here are four of the most admired rewards credit cards – one for every budget.
Savor® Rewards credit card from Capital One®
Best for: Music and theater-goers, foodies and cardholders who love to be out and about.
Rewards: A great credit card for fun lovers and social butterflies alike, the Savor Rewards card offers significantly more cash rewards on dining and entertainment than you’ll typically find with a credit card.
For example, you’ll get 4% cash back on every dollar you spend eating out or relaxing in a bar or cocktail lounge.
You’ll also get 4% cash back on a variety of entertainment purchases, including:
- Concert and theater tickets.
- Movie passes.
- Tickets to professional and semi-professional sporting events.
- Purchases at pool halls and bowling alleys.
- Charges at dance clubs.
- Purchases at record stores.
- Tickets to theme parks.
- Passes for zoos and aquariums.
- Tickets to other tourist attractions.
In addition, you’ll get 2% cash back for every dollar you spend at grocery stores, and 1% cash back for every other dollar you spend.
Other perks: While Capital One doesn’t advertise this credit card as a travel card, it does have some of the benefits of a travel card. The Capital One Savor credit card doesn’t charge a foreign transaction fee, so you can make purchases in other countries without getting hit with additional fees. It also offers a number of perks designed for people who like to spend money on entertainment and dining out. For example, you’ll get a free Postmates Unlimited membership through December 2019, allowing you to skip delivery fees on food orders over $15. You’ll also get 8% cash back through May 2020 on tickets that you buy through Vivid Seats.
In addition, the Capital One Savor card delivers a decent suite of purchase and travel rewards benefits, including extended warranty, price protection, car rental insurance, travel accident insurance, and virtual numbers you can use to protect your online purchases.
Annual fee: $0 for the first year; $95 afterward
Bonus: One-time $300 cash back bonus if you charge $3,000 within three months of account opening
Citi® Double Cash Card
Best for: Cardholders who regularly pay off their balance each month and want simple, hassle-free rewards.
Rewards: If you’re just looking for a credit card that rewards you for using it – no tracking of bonus categories required – then the Citi Double Cash Card is hard to beat. As long as you pay off your purchases in full, you’ll receive a 2% bonus on every transaction. Most flat-rate credit cards, by contrast, award only 1.5% cash back. You’ll have to wait for your full bonus, though, if you carry a balance. Citi Double Cash gives only 1% back when you first use the card, then gives you another 1% once you’ve paid off the transaction.
Other perks: If you do need to carry a balance, the Double Cash Card offers one of the longest-running balance transfer promotions on the market. You’ll get a 0% introductory APR on transferred balances for up to 18 months. Many competitors give cardholders only 15 months to carry a transferred balance without paying interest. Citi also waives the late fee the first time you miss a payment.
Annual fee: No annual fee
Discover it® Cash Back card
Best for: Cardholders who are looking to get more cash back for their everyday spending.
Rewards: If you don’t mind tracking bonus categories and strategizing about when and where to use your card, the Discover it credit card provides the chance to earn a ton of cash back. With this cash rewards credit card, you’ll get 5% cash back on a different rewards category every quarter upon activation and 1% cash back on everything else. Bonus spending is currently capped at $1,500 per quarter, but with such a high rewards rate, it can add up quickly. As a result, you could take home as much as $300 a year through bonuses alone. The rewards categories change every year, but they typically include everyday charges, such as gas stations, groceries and dining out.
Other perks: Discover waives its late fee the first time you miss a payment and doesn’t charge a penalty APR. Additionally, Discover also offers a number of consumer-friendly benefits, including a free FICO credit score, free credit monitoring, and free alerts notifying you if your Social Security number is being sold online. Building credit history and having a strong credit score has its perks and it isn’t easy to attain. It requires healthy financial habits, but one mistake can cause a lot of damage. These benefits can be especially useful for maintaining your credit report and prevention.
Annual fee: No annual fee
Bonus: Discover matches all your rewards at the end of your card’s first year. For example, if you earned $300 in cash back rewards, you’ll gain a total of $600.
Chase Sapphire Reserve® VISA card
Best for: Value seekers who can afford a three-figure annual fee.
Rewards: If you spend a fair amount of money on dining out and travel, you should have no trouble racking up a bunch of points with this high-end travel rewards cards. You’ll get 3 points for every dollar you spend on an array of travel purchases, including airfare, hotel stays, car rentals, cruises, train and bus tickets, ferry passes, cab fare, highway and bridge tolls, and parking fees. You’ll also get 2 points per dollar you spend at restaurants and fast-food chains, and 1 point for every other dollar spent.
What really makes this credit card’s rewards program stand out, though, is its redemption bonus: If you exchange your points for travel through the Chase Ultimate Rewards® portal, you’ll get a 50% bonus on your earnings. In addition to a bonus, if you use Chase Ultimate Rewards to book your tickets, you won’t have to worry about blackout dates. Not to be confused with The Chase Sapphire Preferred credit card, the Chase Sapphire Reserve credit card has all of the benefits the Chase Sapphire Preferred offers plus other premium travel benefits.
Other perks: The Chase Sapphire Reserve VISA card offers an abundance of premium travel perks, including an impressive number of freebies.
For example, cardholders receive:
- A $300 annual travel credit that can be put toward a variety of purchases, including airfare, car rentals, parking fees and hotel stays.
- Up to a $100 statement credit for a TSA PreCheck or Global Entry application.
- Free airport lounge access for a cardholder and up to two guests.
- Free room upgrades and other perks at certain hotels and resorts.
The Sapphire Reserve credit card also delivers some of the strongest travel insurance benefits around, including:
- Car rental insurance.
- Up to $20,000 worth of trip cancellation or interruption insurance.
- Reimbursement for up to $500 worth of personal expenses when your trip has been seriously delayed by an airline or other carrier.
- Reimbursement of up to $100,000 worth of expenses in the event of an emergency evacuation.
- Up to $3,000 worth of lost-baggage protection.
- Up to $50,000 worth of purchase protection.
- Up to $500 worth of return protection.
- Extended warranty protection.
Annual fee: $450
Bonus: 50,000 bonus points if you spend $4,000 within three months of account opening
The Capital One Savor Rewards and Chase Sapphire Reserve credit cards offer the most perks. But if you like the idea of getting free money simply for making everyday purchases, the Citi Double Cash card could be your perfect match. Unlike other cards that charge big annual fees, Citi Double Cash doesn’t require any such commitments. And it encourages healthy credit use — a key ingredient for a happy financial life — by giving you an extra incentive to pay off all of your purchases in full.
Your credit card may stick with you longer than your current friend group, your main squeeze or your dog, so it pays to choose wisely. So make sure you really need a card, pick the right card for you and learn the terms inside and out before you apply.
Asking the right questions before you get a card is key to making sure the card serves you well for years to come and doesn’t get you into financial trouble. “You need to think of your credit card as a tool, not as a ticket to buy ‘all the things,’” Kari Lorz (founder of Money for the Mamas) says
Here are nine questions to ask when choosing a credit card to make sure you end up with a good match — and don’t get hit with any surprises such as credit card debt, high annual percentage rates, late fees, transfer fees, issues with your credit limit…you get the picture.
9 Questions to Ask When Choosing a Credit Card
by Allie Johnson
How good am I at managing my money?
“Time to be honest,” says Ben Watson, a personal finance coach and virtual CFO at DollarSprout.com. “Do you tell your money where to go or does it seem to just disappear without you knowing exactly where?” If you scrape from paycheck to paycheck, that’s a bad sign. If you set and follow a budget, that’s a good sign. “Answering these questions will give some clear indications of if you’re disciplined enough to manage a credit card or not,” Watson says.
Why do I want a card now?
Your reason for wanting a card will guide your search. Are you trying to build credit? Rack up miles for a luxury vacation? Or swap out an old card that no longer fits your needs for daily spending? Get crystal clear on your “why” before you start shopping for a card.
How will I use the card?
“Are you going to pay this card off every month?” asks Kari Lorz, the founder of the personal finance blog Money for the Mamas. “Or are you going to be racking up interest charges because your cash flow is lacking?” While most experts strongly recommend you pay your credit card bill in full each month, you may decide to use a card to finance a needed item such as a new fridge to save money in the short term. If you know you will carry a balance temporarily, you may want to consider a card that offers a zero-interest introductory deal on purchases and make a plan to pay off the balance in the allotted time.
What is my credit score?
Some cards require excellent credit while others accept applicants with good or fair credit. If you have poor credit, you may need to start with a secured card to build your credit. While there are no guarantees when applying for a card, this credit score chart from Experian may give you an idea of how your credit score measures up. You’ll want to use this credit report to consider credit requirements before you apply for a new credit card since each inquiry dings your credit. If a card requires excellent credit and you have bad credit right now, you’ll want to aim for opening a different credit card account.
What kind of rewards program do I want?
The first choice you need to make: cash back rewards card vs. points or miles? While travel rewards sound sexy, cash back may truly be the best choice for you if you want simplicity, don’t want to spend much time learning how to maximize rewards or simply don’t travel a lot. If you do prefer travel rewards, think about your travel patterns. For example, which airline do you fly and where do you want to go? The card that’s right for flying the family to Florida in coach is all wrong if you have your sights set on taking first-class to Paris for your honeymoon.
What credit card deals are available now?
Shop around a bit on issuer websites and credit card sites to see what deals are currently available. Offerings change frequently, and shopping around can help you make sure you’re getting the best deal. For example, issuers frequently change offerings for sign-up bonuses, which allow you to get a slew of points or miles just for getting a card and spending a certain amount within a set timeframe.
How much will I pay to carry the card?
Once you’ve shopped around and have a specific card in mind, take a look at the annual fee and all the other fees, crunch numbers, and make sure you’ll use the card benefits enough to come out ahead, says certified financial planner Eric Croak. “Annual fees on credit cards aren’t actually a bad thing,” Croak says. “The benefits can greatly outweigh the cost.” Note to international travelers: watch out for foreign transaction fees, which could tack hundreds of dollars onto a trip.
What is the interest rate on the card?
It’s crucial to know the APR on any card you’re considering. If there’s a low or zero-percent introductory rate balance transfer card, check to see what it reverts to after the promotional period. Credit cards typically advertise an APR range that can hit 25 percent or higher and depends on the applicant’s creditworthiness. Lorz says: “Hint: if you’re considering getting a store credit card, just don’t.” From clothing stores to lingerie shops to home goods emporiums, she says, retail credit cards usually have “ridiculously high rates.”
Will I actually use the cool perks?
Perks like travel insurance or reimbursement for a Global Entry application fee may get you dreaming about jetting off to the Maldives and floating your cares away in infinity pool at an all inclusive resort. But what if your only real life travel is your annual holiday trip to your grandma’s house in Missoula, Montana? “Don’t say ‘Oh, I’m going to travel,’ because chances are you’re not and all those reward points will go to waste,” Lorz says.
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