Best Personal Credit Cards
Are you in the market for a new credit card? Whether you’re shopping for your first or fifth card, it’s easy to make a mistake when choosing which one to apply for.
What type of card do you want? What can you realistically get approved for? Should you consider a secured credit card? Which credit card issuers offer the best options for your needs?
Common Questions
How should I compare credit card rates?
When shopping for credit cards, we usually focus on the purchase annual percentage rate (APR). However, there are four credit card interest rates to check when comparing credit cards.
- Annual percentage rate (APR) for purchases: A percentage rate that is applied monthly to purchase balances to calculate the amount of interest you owe. A range of 13% to 20% covers most current cards.
- Annual percentage rate (APR) for balance transfers: A percentage rate that is applied monthly to balance transfers to calculate the amount of interest you owe. This rate can vary more broadly than the purchase APR, from under 10% to over 20%.
- Annual percentage rate (APR) for cash advances: This rate is applied monthly to cash advances to calculate the amount of interest you owe. This will typically be equal to or higher than the rate for balance transfers. A 24% APR would not be surprising.
- Penalty annual percentage rate (APR): An annualized percentage rate that is applied monthly to balances that become significantly past due. A penalty APR of nearly 30% is common.
Credit card rates have been rising steadily, but they can vary wildly from one card to another. So, it is worth reading the fine print when comparing credit card rates.
How should I compare credit card fees?
Credit cards come with a schedule of fees that often include the following:
- Annual fee: Some issuers require a yearly fee to keep the credit card account open. The fees can range from $0 to $500.
- Additional card fee: This is a fee charged for having an extra card linked to the account. Getting an additional card is usually free, but some issuers will charge a discounted annual fee.
- Foreign transaction fee: A fee is charged by some card issuers when transactions are made in a foreign currency. This can range from 0% to 5%.
- Balance transfer fee: Cards usually charge between 3% and 5% of the transfer amount with a minimum fee of $5 to $10.
- Cash advance fee: Most cards charge either a flat fee or a percentage of the cash advance amount, whichever is greater. For example, a typical cash advance fee is the greater of $10 or 5%.
- Returned payment fee: If your payment bounces you typically will have to pay a penalty fee. This fee is capped at $39 if it’s the second returned payment in the last six months and $29 if it’s the first.
- Late payment fee: If you’re late on a payment you can expect to pay up to $39 ($29 if it’s the first time in six months).
What coverage options are available?
The most common coverage types include:
- Collision coverage repairs or replaces your vehicle after an accident.
- Comprehensive coverage repairs your car if it is damaged by a covered cause other than a car accident.
- Bodily injury liability kicks in if you were responsible for an accident. It covers your legal fees and the other person’s medical bills and lost wages (if applicable).
- Property damage liability pays for property damage to the other party if you cause an accident.
- After an accident, Personal Injury Protection (PIP) covers medical bills that exceed your health insurance. Also, it can reimburse you for any lost wages.
- Medical payments coverage is like PIP, but it also covers any passengers in your car and any other family members who drive your car. Plus, medical payments coverage still kicks in even if you’re injured in someone else’s car or as a pedestrian.
- Uninsured/underinsured motorist applies if you’re in an accident with another driver who doesn’t have insurance. This coverage covers your medical bills and, in some states, property damage.
- Guaranteed asset protection kicks in when a car is totaled. It reimburses the owner for the difference between what they still owe on their car and the amount that insurance covers.
- Rental car reimbursement covers the cost of renting a vehicle when yours is being repaired after an accident.
How should I compare introductory offers?
Credit card issuers often offer introductory promotions to attract new cardholders. You may be able to benefit from these promotions by earning rewards or saving on interest costs. For example, a card may offer a 12-month 0% APR on purchases or balance transfers.
Another type of introductory offer is a bonus where you get a cash kickback ranging from $100 to $300 for spending a minimum amount within the first one to three months of opening the credit card account. Factor these promotions into the overall value of a card, but remember that they are temporary. So they shouldn’t be the only reason you choose a card.