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How Tax Refund Advance Loans Really Work

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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MagnifyMoney did some digging around to give you the lowdown on refund advances. Here's what you need to know.

The checkered past of refund anticipation loans

These so-called "refund anticipation loans," as they were once called, aren’t exactly new. They’ve been around since the late ’80s, when e-filing was just picking up momentum.

According the U.S. Census Bureau, these loans typically came with triple-digit APRs and hefty fees. What’s worse, 2009 data put out by the IRS suggested that these loans were marketed mainly toward low-income taxpayers. And more often than not, they were presented in ways that were misleading and falsely advertised, according to the National Consumer Law Center (NCLC).

Not surprisingly, refund anticipation loans grew to be a source of consternation among consumer advocates. To carry them out, tax-prep companies would take their cut, then deposit the remainder of the refund into a temporary bank account that the taxpayer typically accessed via a prepaid bank card.

Fortunately, these loans became a thing of the past in 2012 amidst major outcry from consumer advocacy groups like the NCLC and others. Ira Rheingold, executive director of the National Association of Consumer Advocates, tells MagnifyMoney that they were as predatory as payday loans.

"Thanks to consumer complaints and government action, things have gotten somewhat better, but these refund anticipation loans were known for sky-high interest rates and exorbitant fees," he says.

How today's tax refund advances work

Liberty Tax offers a free tax refund advance loan option.

These days, refund anticipation loans have been rebranded as tax refund advances. But the change runs deeper than just the name. According to top tax-prep servicers like H&R Block, Jackson Hewitt and Liberty Tax, these revamped products are 100 percent free for those who qualify. Advance amounts range depending on eligibility, but Liberty Tax is offering as much as $3,250.

Tax-prep servicers are exceptionally tight-lipped when it comes to the qualifying criteria. (See our handy chart below.) H&R Block is the most forthcoming, but there are still a lot of question marks. Their website says eligi

Elgibility requirements include providing proper identification and having a “sufficient” tax refund, whatever that means.

However, there are a few things that could get you declined, including having bad credit, failing to present relevant tax forms like W-2s and 1099s, or not meeting certain income requirements, among other things. If you are approved, the loan amount is deposited into a temporary bank account you can access with a prepaid debit card, unless the servicer offers a direct deposit option. Either way, the loan itself is indeed fee-free and has a 0 percent APR.

Be that as it may, experts still encourage consumers to approach with caution.

"From the perspective of the consumer, I'd say they need to be very skeptical," Adam Rust, director of research at consumer advocacy group Reinvestment Partners and managing director of the nonprofit WiseWage, told MagnifyMoney. “Private companies don't provide free services and banks don't make free loans."

H&R Block is one of several tax preparer services that offers a tax refund advance loan to customers from $500 to $3,000.

Tax advances are indeed more accurately described as loans. The cash actually comes from banks, which are reimbursed when your refund comes in. In order to offer these advances, Rust says tax-prep companies cover the bank fees, essentially making them free for the consumer.

"It's actually a cost item for the preparers, which is one more reason to suspect that these loans aren't really free," he said. "The price may say free, but that doesn't mean it can't be recovered within the cost of the tax prep."

This is where things get a little less transparent. H&R Block declined a phone interview with MagnifyMoney, so I called up my local storefront and asked if there's an additional charge for getting a tax refund advance. In other words, will my tax preparation fee be the same whether I get a refund advance or not? I was told it would be, but locking down an accurate estimate for the service isn't easy.

According to the National Society of Accountants, the average tax-prep fee for federal and state returns during the 2017 filing season was $273 for folks who itemized their deductions; $176 for those who didn't. The takeaway here is that the complexity of the return appears to increase consumer costs. To get an actual estimate, you'll need to present your tax information, but the price you're quoted is likely to vary.

In 2016, consumer advocacy group Georgia Watch sent mystery shoppers into paid tax-prep firms in low-income neighborhoods in southwest Atlanta. What they found was "a stunning lack of knowledge and professionalism from preparers, vast inconsistencies in preparation fees, and a wide range of outcomes given the same inputs at each site."

Rheingold, who was not involved in the research, isn't all that surprised by the findings.

"The quality of tax preparers in high-volume firms is often pretty poor," he said.

Hidden costs to look out for

Refund transfers

If you’re declined for a tax refund advance loan, some tax preparation companies may offer you a concession prize: the chance to get a refund transfer.

A tax refund advance may be advertised as free, but the same can't be said for a refund transfer.

Instead of paying your tax-prep fees at the time of service, you can defer it with a transfer. The tax preparer essentially creates a short-term account where your refund is deposited, at which point they'll take their fee directly. H&R Block charges $39.95 for a federal refund transfer. It's called an assisted refund at Jackson Hewitt, where it'll run you $49.95. Meanwhile, Liberty Tax says you have to "consult your tax office" for pricing details.

It's marketed for its speed and convenience, but Rust says taxpayers should think twice before opting in. Almost half of Liberty Tax's filers last year ended up getting a refund transfer, according to the company’s 2017 annual report.

"That's really telling to me because the refund advance is marked as free, but the refund transfer isn't,” Rust said. “So why are so many people paying for the transfer?"

What Rust is getting at is that it appears as though the lure of a free refund advance gets people in the door, at which point they're sold on the refund transfer after getting declined. Since offering these loans is a cost product for tax-prep companies, Rust says it's a fair assumption.

The cost of accessing your funds

Prepaid debit cards essentially serve as substitute checking accounts for those who don't have one. Many tax preparation companies offer prepaid debit card products that customers can sign up for in order to have their tax refunds deposited there. However, these cards my carry additional fees that can eat away at the value of the tax refund itself.

"One of the things we've seen is the growth of prepaid debit cards to access your refund advance," said Rheingold. "Accessing your money through an ATM [often] comes with fees, which means you're being charged to access your own money."

Jackson Hewitt puts refund advance funds on the American Express Serve Card if you're not doing a direct deposit into your checking account. H&R Block goes with the Emerald Prepaid Mastercard, and Liberty Tax uses a Netspend prepaid Mastercard.

Where to get a tax refund advance

Here's what the major tax-prep companies are offering. Again, all advances are marketed as free, and you have to apply at a participating office by Feb. 28. Jackson Hewitt is in the game as well, but their website pushes people to visit a local office to learn more.

 

H&R Block

Liberty Tax

Loan amounts

$500, $750, $1,250 or $3,000

$500, $800, $1,300, $3,250

Eligibility

According to their website: "You first must meet certain eligibility requirements such as having a sufficient tax refund from the IRS, and provide appropriate identification. You then submit an application to BofI Federal Bank, the lender. The bank will evaluate your application based on standard underwriting criteria and makes the decision to approve or deny your application."

Must visit a Liberty Tax office for eligibility requirements

When is the advance available?

Typically the same day

Usually within 24 hours

Alternatives to a tax refund advance

You can always file earlier to expedite the arrival of your refund. Without a tax refund advance, most folks who file electronically can expect their refund in less than three weeks, according to the IRS. The most common cause for delay is if you're claiming the Earned Income Tax Credit or the Additional Child Tax Credit, which will push your refund at least into late February.

Either way, for simple returns where the filer is only bringing in a W-2 and not itemizing, Rust says most preparers can probably complete the job in less than 90 minutes.

“Should that cost more than $200? Should the chance of receiving an advance justify spending that much when, instead, a low-income filer could go to a VITA site and have their return prepared for free?" he asked.

Rust is referring to the IRS Volunteer Income Tax Assistance program, which offers free tax preparation for people who earn $54,000 or less per year. Those who are above the income threshold can also opt for out-of-the-box software like TurboTax. Prices vary here depending on the complexity of your return, but it's generally much cheaper than going with a storefront tax preparer.

Final thoughts on tax refund advances

If getting a tax refund advance means adding to your tax-prep bill, Rheingold says it doesn't make financial sense to get one.

"Even if it says it's free, it's a safe bet that these places are baking the costs into the tax-prep fee to make up the difference."

That said, if you're in dire financial straits, it may be your only resource for quick cash — but buyer beware.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

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What Trump’s Budget Really Means for Student Loan Borrowers

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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There has been a lot of buzz around President Donald Trump’s $4.4 trillion budget proposal outlining steep spending cuts to domestic programs, including the federal student loan program since it was unveiled Monday.

If you are a student loan borrower, rest assured that this budget won’t cause changes — at least not directly. Experts interviewed by MagnifyMoney all said the proposal barely means anything to student loan borrowers or prospective borrowers because Congress may completely ignore it, as it did last year and many years in the past.

“The president’s budget in general is just a proposal and messaging document,” said Josh Gordon, policy director at The Concord Coalition, a national nonpartisan fiscal advocacy group. “And it doesn't have the force of law. It doesn’t get voted on in its entirety.”

However, the proposal does allude to the White House hoping to reform the federal student loan program.

Trump’s blueprint would streamline income-based loan repayment plans, eliminate the Public Service Loan Forgiveness Program and scrap subsidized loans. These policies would save roughly $203 billion over 10 years. While the savings amount is larger than what Trump recommended in last year’s proposal, the proposed policy changes stay largely unchanged from last year’s, which Congress did not act on.

“The chances of it being acted as written I would say if it’s not zero, it’s close,” Marc Goldwein, head of policy at Committee for a Responsible Federal Budget, an independent, non-profit, bipartisan public policy organization based in Washington, D.C., told MagnifyMoney. “But I could see pieces of it passing, particularly if there’s a broader higher education bill or some kind of deficit reduction bill in the next couple of years.”

What to know about Trump’s proposals

Trump proposed changing student loan policies that would apply to loans originated on or after July 1, 2019. Those who are borrowing now wouldn’t be affected.

Here are three pieces of major policy change recommendations:

1) Simplify income-driven repayment programs

The new budget plan would collapse income-driven repayment plans — monthly student loan payment calculated based on income and family size — into one, under which student loan borrowers would pay 12.5 percent of their monthly income toward student loans. Borrowers in general pay 10 percent under current plans.

Borrowers may have their remaining balance forgiven after 15 years if their loans covered undergraduate education. But those who borrow for graduate-level studies would have to make 30 years of payments before their balance can be forgiven. Under current law, loan forgiveness for private-sector employees kicks in after 20 or 25 years.

2) Eliminate subsidized loans

Subsidized loans are need-based undergraduate loans that the government pays interest while the student is enrolled at least half time or while the loan is in its grace period or deferment. After that, the borrower starts paying interest. Unsubsidized loans, on the other hand, accrue interest while the student is in school, in grace or in deferment, and the borrower is responsible for repaying all of it.

3) End the Public Service Loan Forgiveness program

As an incentive to encourage students to work in the public sector, government employees or those working for qualified nonprofit organizations may have their loan balance forgiven after 120 on-time payments (which takes a minimum of 10 years). Trump suggested ending this program.

Goldwein said the fact that Congress didn’t act on any of Trump’s last budget recommendations about student loans convinces him that not much is going to change this year either.

Where is Trump’s proposal headed?

Goldwein explained that when the president puts forward a budget proposal, it’s just a policy statement that provides a sense of the president’s priorities. And there’s not usually an effort in Congress to actually enact large parts of it: It either ignores the proposal entirely or picks up pieces of it.

Gordon said this year is even less likely for Congress to act on any presidential proposal because before Trump unveiled his proposal, Congress passed a budget deal that raised spending caps over the course of the next two years.

The fact that 2018 is an election year also makes it less likely that the Senate and the House will try to pass a budget that they can agree on.

“That would be a very difficult political vote, and it seems like they are going to try to avoid that,” Gordon said.

Goldwein said a future Congress may enact some of the president’s recommendations, but it’s unclear when and how.

So what can student loan borrowers do?

Goldwein cautions future borrowers that college costs will likely continue to rise and at the same time, the government will likely have less money to subsidize higher education.

This is in part because the country’s debt keeps rising while its population ages. Therefore, a bigger share of the federal budget is set to go to interest payments and entitlement programs for seniors, Goldwein explained. Meanwhile, revenue will decrease due to massive tax cuts. On top of that, the Federal Reserve will likely keep increasing its short-term interest rates, and so student loan interest rates will tick up.

Gordon suggests concerned borrowers or future borrowers get politically involved.

“If their interest is in it, they should ask their member of Congress of that they think or what they think about this proposal, how they would change it and what it would mean for their constituency,” Gordon said. “I think that dialogue with their representative is important.”

You may want to check out our guide on paying for college or our guide to student loan forgiveness, as it’s still an available option.

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Average Household Credit Card Debt in the U.S. in 2018

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Even as household income and employment rates are ticking up in the U.S., credit card balances are approaching all-time highs. What’s behind the growth of credit card spending among consumers? In an updated report on credit card debt in America, MagnifyMoney analyzed credit debt trends in the U.S. to find out exactly how much credit debt consumers are really taking on and, crucially, how they are managing their growing reliance on plastic.

Key Insights:

  • Credit card debt is on the rise with the average indebted household carrying $8,683 in credit card debt. That’s an increase of more than $650 per household compared with this time last year — a full 8.6 percent increase. Despite the rise in debt levels, current debt levels are 22.8 percent less compared with October 2008, when household credit card debt peaked at $11,248.
  • Credit card balances and credit card debt are not the same thing. The 78 million Americans who pay their bill in full each month have credit card balances reported to the major credit reporting bureaus.
  • Assessing financial health means focusing on credit card debt trends rather than credit card use trends.

Credit Card Debt in the U.S. — By the Numbers

Credit Card Use

  • Number of Americans who use credit cards: 200 million1
  • Average number of credit cards per consumer: 2.32
  • Number of Americans who carry credit card debt: 122 million3

Credit Card Debt

The following figures only include the credit card balances of those who carry credit card debt from month to month.

  • Total credit card debt in the U.S.: $542 billion4
  • Average credit card debt per person: $4,4535
  • Average credit card debt per household: $8,6836

Credit Card Balances

The following figures include the credit card statement balances of all credit card users, including those who pay their bill in full each month.

  • Total credit card balances: $808 billion as of July 2017, an increase of 8.1 percent from the previous year.7
  • Average balance per person: $4,0418

Who Pays Off Their Credit Card Bills?

  • 45 percent of households pay off their credit card bills in full each month
  • 28 percent of households carry a balance all year
  • 26 percent of households sometimes carry a balance9

Credit Card Balances vs. Household Credit Debt

At first glance, it may seem that Americans are taking on near record levels of credit debt. Over a quarter (28 percent) of American households9 carry credit card debt from month to month, and another quarter (26 percent) carried credit card debt at least once last year.

If you look at the total credit card balances among U.S. households, the figure appears astronomical — $808 billion. But that figure includes households that are paying their credit debt in full each month as well as those that are carrying a balance from month to month.

While credit balances are increasing, the amount of debt that households are carrying from month to month is somewhat lower than it was leading up to the 2008 financial crisis. The total of credit card balances for households that actually carry debt from month to month is $542 billion.

As of the third quarter of 2017, households with credit card debt owed an average of $8,6833 That is a decrease of 22.8 percent compared to October 2008, when household credit card debt peaked at $11,248.10J

And as household incomes have risen in recent years, this has helped to lower the ratio of credit card debt to income. Today, indebted households with average debt and median household incomes have a credit card debt to income ratio of 14.7 percent.11 Back in 2008, the ratio was 20.1 percent12.

Delinquency Rates

Credit card debt becomes delinquent when a bank reports a missed payment to the major credit reporting bureaus. Banks typically don’t report a missed payment until a person is at least 30 days late in paying. When a consumer doesn’t pay for at least 90 days, the credit card balance becomes seriously delinquent. Banks are very likely to take a total loss on seriously delinquent balances.

In the second quarter of 2010, serious delinquency rates on credit cards were 13.74 percent of all balances owed, nearly twice as what they are today. Today, credit card delinquency rates are down to 7.47 percent.13

How We Calculated Household Credit Card Debt

Credit card debt doesn’t appear on the precipice of disaster, but the recent growth in balances is cause for some concern. Still, our estimates for household credit card debt remain modest.

In fact, MagnifyMoney’s estimates of household credit card debt is two-thirds that of other leading financial journals. Why are our estimates comparatively low?

A common estimate of household credit card debt is:

This method overstates credit card debt. The Federal Reserve Bank of New York/Equifax Consumer Credit Panel (CCP) does not release a figure called credit card indebtedness. Instead, they release a figure on national credit card balances. Representatives of the Federal Reserve Bank of New York and the Philadelphia Federal Reserve Bank both confirmed that the CCP includes the statement balances of people who go on to pay their bills in full each month.

Another method of estimating household credit card debt is to use the estimate from the Federal Reserve’s Survey of Consumer Finances. The 2016 survey found that the average household with credit card debt had $570014 in debt. Unfortunately, households in this survey tended to underreport their debt according to another Federal Reserve study.

To find a better estimate of credit card debt, we found methods to exclude the statement balances of full paying households from our credit card debt estimates. Statement balances are the balances owed to a credit card company at the end of a billing cycle. Even though full payers pay off their statement balance each month, their balances are included in the CCP’s figures on credit card balances.

To exclude full payer balances, we turned to academic research outside of the Federal Reserve Banks. The paper, Minimum Payments and Debt Paydown in Consumer Credit Cards, by Benjamin J. Keys and Jialan Wang, found full payers had mean statement balances of $3,412. We used this figure, multiplied by the estimated number of full payers to find the statement balances of full payers.

Our credit card debt estimate is:3

Per Person Credit Card Debt

Once we adjust for these effects, we see that an estimated 122 million Americans carry $542 billion of credit card debt from month to month. Back in 2008, 20 million fewer Americans carried debt, but total credit card debt in late 2008 hovered around $589 billion.16 That means people with credit card debt in 2008 had far more debt than people with credit card debt today.

Average credit card debt among those who carry a balance today is $4,453 per person2 or $8,683 per household.3 In late 2008, the 102 million17 Americans with credit card debt owed an average of $5,858 per person10I or $11,248 per household.10J

Credit Card Debt: Do We Know What We Owe?

Academic papers, consumer finance surveys, and the CCP each use different methods to measure average credit card debt among credit card revolvers. Since methodologies vary, credit card debt statistics vary based on the source consulted.

MagnifyMoney surveyed these sources to present a range of credit card debt statistics.

 

Low Estimate

High Estimate

People with Credit Card Debt

110 million18A

134 million18B

Households with Credit Card Debt

55 million19

69 million20

Median Household Credit Card Debt

$2,30021

$3,50022

Average Household Credit Card Debt

$5,70023

$9,60024

MagnifyMoney Estimated Credit Card Debt per Person

$4,3515

$4,5555

Are We Paying Down Credit Card Debt?

A Pew Research Center study25 showed that Americans have an uneasy relationship with credit card debt. More than two-thirds (68 percent) of Americans believe that loans and credit card debt expanded their opportunities. And 85 percent believe that Americans use debt to live beyond their means.

Academic research shows the conflicting attitude is justified. Some credit card users aggressively pay off debt. Others pay off their bills in full each month.

However, a substantial minority (44 percent)26 of revolvers pay within $50 of their minimum payment. Minimum payers are at a high risk of carrying unsustainable credit card balances with high interest.

In fact, 14 percent of consumers have credit card balances above $10,000.27 At current rates, consumers with balances of $10,000 will spend close to $1,500 per year on interest charges alone.28

Even an average revolver will spend between $65230 and $68331 on credit card interest each year.

Credit Debt Burden by Income

Those with the highest credit card debts aren’t necessarily the most financially insecure. According to the 2016 Survey of Consumer Finances, the top 10 percent of income earners who carried credit card debt had nearly twice as much debt as average.

However, people with lower incomes have more burdensome credit card debt loads. Consumers in the lowest earning quintile had an average credit card debt of $2,100. However, their debt-to-income ratio was 13.9 percent. On the high end, earners in the top decile had an average of $12,500 in credit card debt. But debt-to-income ratio was just 4.8 percent.

Income Percentile

Median Income

Average CC Debt

CC Debt: Income Ratio

0%-20%

$15,100

$2,100

13.9%

20%-40%

$31,400

$3,800

12.1%

40%-60%

$52,700

$4,400

8.3%

60%-80%

$86,100

$6,800

7.9%

80%-90%

$136,000

$8,700

6.4%

90%-100%

$260,200

$12,500

4.8%

Although high-income earners have more manageable credit card debt loads on average, they aren’t taking steps to pay off the debt faster than lower income debt carriers. In fact, high-income earners are as likely to pay the minimum as those with below average incomes.33 If an economic recession leads to job losses at all wage levels, we could see high levels of credit card debt in default.

Generational Differences in Credit Card Use

In 2017, Generation X surpassed the baby boomer generation to have the highest credit card balances. Experian estimates that on average, Generation X has a balance of $7,750 per person, 21.94% more than the national average ($6,354). Boomers carry nearly as much as Generation X with an average balance of $7,550.

At the other end of the spectrum, millennials, who are often characterized as frivolous spenders and are too quick to take on debt, have nearly the lowest credit card balances. Their median balance clocks in at $4,315. The youngest generation, Gen Z, has the smallest average balance of $2,047 per person.34

Better Consumer Behavior Driving Bank Profitability

You may think that lower balances spell bad news for banks, but that isn’t the case. Credit card lending is more profitable than ever thanks to steadily declining credit card delinquency. Credit card delinquency is near an all-time low 7.47 percent.13

Despite better borrowing behavior, banks held interest on credit cards steady between 13% and 14%35 since 2010. Today, interest rates on credit accounts (assessed interest) is nearly 15%. This means bank profits on credit cards are at all-time highs. In 2015, banks earned over $102 billion dollars from credit card interest and fees.36 This is 15 percent more than banks earned in 2010.

How Does Your State Compare?

Using data from the Federal Reserve Bank of New York Consumer Credit Panel and Equifax, you can compare median credit card balances and credit card delinquency. You can even see how each generation in your state compares with the national median.

State

Credit Card Debt Per Debtor

Credit Card Debt Per House

Alabama

$3,710.56

$7,198.48

Alaska

$5,879.85

$11,406.91

Arizona

$4,299.70

$8,341.42

Arkansas

$3,289.01

$6,380.69

California

$4,569.51

$8,864.85

Colorado

$4,898.56

$9,503.20

Connecticut

$5,171.89

$10,033.47

Delaware

$4,338.88

$8,417.42

Florida

$4,318.35

$8,377.59

Georgia

$4,727.46

$9,171.27

Hawaii

$5,330.46

$10,341.09

Idaho

$3,791.84

$7,356.18

Illinois

$4,412.71

$8,560.65

Indiana

$3,624.05

$7,030.65

Iowa

$3,169.16

$6,148.17

Kansas

$3,854.05

$7,476.85

Kentucky

$3,457.67

$6,707.88

Louisiana

$3,767.91

$7,309.75

Maine

$3,905.56

$7,576.78

Maryland

$5,287.61

$10,257.96

Massachusetts

$4,720.53

$9,157.83

Michigan

$3,458.51

$6,709.51

Minnesota

$4,257.26

$8,259.08

Mississippi

$3,204.95

$6,217.60

Missouri

$3,763.46

$7,301.11

Montana

$3,732.83

$7,241.69

Nebraska

$3,594.46

$6,973.25

Nevada

$4,263.19

$8,270.59

New Hampshire

$4,943.44

$9,590.27

New Jersey

$5,361.06

$10,400.47

New Mexico

$4,185.93

$8,120.71

New York

$4,969.84

$9,641.50

North Carolina

$4,124.04

$8,000.63

North Dakota

$3,756.19

$7,287.00

Ohio

$3,738.95

$7,253.56

Oklahoma

$4,038.90

$7,835.47

Oregon

$3,881.17

$7,529.48

Pennsylvania

$4,209.21

$8,165.86

Rhode Island

$4,376.34

$8,490.10

South Carolina

$4,187.65

$8,124.04

South Dakota

$3,608.28

$7,000.07

Tennessee

$3,903.24

$7,572.28

Texas

$4,937.00

$9,577.78

Utah

$3,775.21

$7,323.92

Vermont

$4,199.77

$8,147.56

Virginia

$5,404.32

$10,484.38

Washington

$4,568.09

$8,862.09

West Virginia

$3,381.36

$6,559.84

Wisconsin

$3,410.29

$6,615.96

Wyoming

$3,944.72

$7,652.76

State

Delinquency Rate

Alaska

11.3%

Alabama

8.5%

Arkansas

9.1%

Arizona

10%

California

8.1%

Colorado

6.9%

Connecticut

7.3%

Delaware

10.4%

Florida

10.8%

Georgia

10.8%

Hawaii

6.5%

Iowa

6.7%

Idaho

6.9%

Illinois

7.3%

Indiana

6%

Kansas

6.5%

Kentucky

8.7%

Louisiana

10.2%

Massachusetts

6.9%

Maryland

8.5%

Maine

7%

Michigan

7.2%

Minnesota

5.3%

Missouri

12%

Mississippi

7.9%

Montana

6%

North Carolina

7.36%

North Dakota

4.22%

Nebraska

4.82%

New Hampshire

6.07%

New Jersey

7.20%

New Mexico

8.32%

Nevada

9.88%

New York

8.22%

Ohio

6.81%

Oklahoma

7.22%

Oregon

6.08%

Pennsylvania

7.05%

Rhode Island

7.06%

South Carolina

7.65%

South Dakota

5.73%

Tennessee

6.67%

Texas

7.84%

Utah

5.56%

Virginia

5.87%

Vermont

5.46%

Washington

5.36%

Wisconsin

4.47%

West Virginia

7.34%

Wyoming

6.49%

State

Silent

Boomers

Gen X

Millennials

Gen Z

Alaska

$5,456

$9,495

$8,995

$4,464


$1,518


Alabama

$3,511

$6,461

$6,485


$3,324


$1,455




Arkansas

$3,194

$5,995

$6,197


$3,240


$1,803


Arizona

$4,149

$6,967

$6,778


$3,575


$1,555


California

$4,232

$7,050

$6,578


$3,654


$1,596


Colorado

$4,004

$7,499

$7,439


$3,833



$1,514


Connecticut

$4,091

$8,179

$8,046


$3,716



$2,567


Dist. of Columbia

$5,486

$7,976

$7,393


$4,596



$2,814


Delaware

$4,147

$7,128

$7,144


$3,285



$1,608


Florida

$4,311

$7,047

$6,615


$3,639



$1,837


Georgia

$4,356

$7,517

$6,972


$3,540


$1,835


Hawaii

$4,386

$7,073

$7,355


$4,203


$1,657


Iowa

$2,367

$5,297

$6,163


$2,857


$935


Idaho

$3,477

$6,147

$6,332


$3,193


$928


Illinois

$3,641

$7,054

$7,040


$3,537


$1,556


Indiana

$3,137

$5,998

$6,174


$3,003


$1,402


Kansas

$3,187

$6,514

$6,930


$3,292


$1,421


Kentucky

$3,044

$5,727

$6,080


$3,082


$1,372


Louisiana

$3,679

$6,598

$6,561


$3,425


$1,971


Massachusetts

$3,481

$7,017

$7,022


$3,479

$1,882


Maryland

$4,341

$7,994

$7,458


$3,671


$1,749


Maine

$3,107

$6,054

$6,531


$3,375


$1,286


Michigan

$3,436

$6,049

$6,113


$2,971


$1,523


Minnesota

$3,025

$6,299

$6,898


$3,244


$1,338


Missouri

$3,265

$6,333

$6,757


$3,279


$1,346


Mississippi

$3,218

$5,634

$5,718


$3,043


$2,011


Montana

$3,285

$5,977

$6,868


$3,385


$1,506


North Carolina

$3,481

$6,566

$6,710


$3,397


$1,486


North Dakota

$2,141

$5,362

$6,646


$3,326


$1,467


Nebraska

$2,717

$5,909

$6,498


$3,136


$1,388


New Hampshire

$3,582

$7,140

$7,443


$3,519


$1,666


New Jersey

$4,126

$8,011

$7,882


$3,928


$2,241


New Mexico

$4,373

$6,906

$6,534


$3,532


$1,207


Nevada

$4,733

$6,993

$6,357


$3,700


$1,185


New York

$3,906

$7,127

$7,234


$3,986


$2,495


Ohio

$3,313

$6,383

$6,530


$3,135


$1,465


Oklahoma

$3,484

$6,789

$6,900


$3,493


$1,641


Oregon

$3,618

$6,502

$6,481


$3,245


$856


Pennsylvania

$3,282

$6,550

$7,059

$3,457


$1,545


Rhode Island

$3,524

$7,162

$7,313


$3,371


$1,786


South Carolina

$4,019

$6,537

$6,559


$3,281

$1,375


South Dakota

$2,584

$5,710

$6,900

$3,250


$1,531


Tennessee

$3,388

$6,309

$6,505


$3,308


$1,737


Texas

$4,350

$7,591

$7,119


$3,779


$1,945


Utah

$3,364

$6,411

$6,713


$3,070


$932


Virginia

$4,132

$7,956

$7,968


$3,985

$1,692


Vermont

$3,681

$6,197

$6,547


$3,297


$2,511


Washington

$3,947

$7,365

$7,190


$3,500


$1,355


Wisconsin

$2,740

$5,673

$6,289


$2,914


$992


West Virginia

$2,914

$5,573

$6,158


$3,238


$1,166


Wyoming

$3,523

$6,356

$6,889

$3,663

$1,442

Footnotes:

    1. Calculated metric using the following sources:
      1. Federal Reserve Bank of New York/Equifax Consumer Credit Panel, tabulated by the Federal Reserve Banks of Philadelphia and Minneapolis and accessed via the Consumer Credit Explorer, % with Credit Card Debt, Accessed on January 28, 2018
      2. November 2017 Report on Household Debt and Credit, Federal Reserve Bank of New York, Page 3 and Page 20, calculated metric, Accessed on January 28, 2018

Notes: 74.6% carry a credit card balancea X 268b million adults with credit reports in Q3 2017 = 199 million credit card users.

  1. November 2017 Report on Household Debt and Credit, Federal Reserve Bank of New York, Page 4, Q3 2017, Accessed on January 28, 2018465 million credit card accounts. 465 million credit card accounts / 199 million credit card users1 = 2.3 credit cards per person.
  2. Calculated metric using the following sources:
    1. 2016 Report on the Economic Well-Being of U.S. Households, Board of Governors of the Federal Reserve System, Page 35, Accessed on January 28, 2018
    2. Minimum Payments and Debt Paydown in Consumer Credit Cards, Benjamin J. Keys and Jialan Wang, Page 50, Table 1 Summary Statistics, Accessed on January 28, 2018

    Notes: 199 million1 * 55% a (Carried debt at some point last year) = 110 million people with credit card debt.

    199 million1 * 67% (Not full payers) b = 134 million people with credit card debt.

    Average estimate is 122 million with credit card debt.

  3. Calculated Metric using the following sources:
    1. 2016 Report on the Economic Well-Being of U.S. Households, Board of Governors of the Federal Reserve System, Page 35, Accessed on January 28, 2018
    2. Minimum Payments and Debt Paydown in Consumer Credit Cards, Benjamin J. Keys and Jialan Wang, Page 50, Table 1 Summary Statistics, Accessed on January 28, 2018

    Notes: 199 million1 * 55% (Carried debt at some point last year) * $4,5555e in debt per person = $501 billion in debt

    194 million1 * 67% (Carried debt at some point last year) * $4,3505d in debt per person = $583 billion in debt

    Average estimated total credit card debt is $550 billion.

  4. Calculated metric using the following sources:
    1. November 2017 Report on Household Debt and Credit, Federal Reserve Bank of New York, Page 3, Debt Balance Credit Card Debt Q3 2017, Accessed on January 28, 2018
    2. Minimum Payments and Debt Paydown in Consumer Credit Cards, Benjamin J. Keys and Jialan Wang, Page 59, Table A-1 Summary Statistics by Payer Type, Accessed on January 28, 2018
    3. 2016 Report on the Economic Well-Being of U.S. Households, Board of Governors of the Federal Reserve System, Page 35, Accessed on January 28, 2018

    Notes:

    5d- estimate of average credit card debt using Minimum Payments and Debt Paydown in Consumer Credit Cards
    $808 billion in outstanding credit card balancesa
    Estimate that 33% pay balance in full each monthb
    Full payers carry an average balance of $3412 before paying it offb

    [$808 billion - ($3,412 (full payer balance) * 33% full payer * 199 million credit card users1)] / (199 million credit card users * (100% - 33% not full payers)) = $4,350

    5e- estimate of average credit card debt using 2016 Report on the Economic Well-Being of U.S. Households

    $808 billion in outstanding credit card balancesa
    Estimate that 45% pay balance in full each monthc
    Full payers carry an average balance of $3412 before paying it offb

    [$808 billion - ($3,412 (full payer balance) * 45% full payer * 199 million credit card users1)] / (199 million credit card users * (100% - 45% not full payers)) = $4,555

    Average estimated credit card debt per person is $4,453.

  5. Calculated metric using the following sources:Current Population Survey, U.S. Census Bureau, Table HH6 Average Population Per Household and Family: 1940 to Present, Accessed January 28, 2018Average per person credit card is $4,4535 and the average household contains 1.95 adults over the age of 18. $4,453 * 1.95 = $8,683.
  6. November 2017 Report on Household Debt and Credit, Federal Reserve Bank of New York, Page 3, Debt Balance Credit Card Debt Q3 2017 and Q3 2016, Accessed on January 28, 2018
  7. Calculated metric using the following sources:November 2017 Report on Household Debt and Credit, Federal Reserve Bank of New York, Page 3, Debt Balance Credit Card Debt Q3 2017, Accessed on January 28, 2018Notes: $808 billion / 199 million1 = $4,041.
  8. 2016 Report on the Economic Well-Being of U.S. Households, Board of Governors of the Federal Reserve System, Page 35, Accessed on January 28, 2018
  9. Calculated metrics using the following sources:
    1. Federal Reserve Bank of New York/Equifax Consumer Credit Panel, tabulated by the Federal Reserve Banks of Philadelphia and Minneapolis and accessed via the Consumer Credit Explorer, % with Credit Card Debt September 2008, Accessed on January 28, 2018
    2. November 2017 Report on Household Debt and Credit, Federal Reserve Bank of New York, Page 20 and Page 3, Calculated metric, number of people with credit reports Q3 2008 Accessed on January 28, 2018
    3. November 2017 Report on Household Debt and Credit, Federal Reserve Bank of New York, Page 3, Outstanding credit card balances Q3 2008, Accessed on January 28, 2018
    4. Survey of Income and Program Participation, 2008 Panel, Wave 4, US Census Bureau, Debt by Year, Table 2. Percent Holding Debt for Households, by Type of Debt and Selected Characteristics: 2009, Credit card debt, Accessed on January 28, 2018
    5. Current Population Survey, U.S. Census Bureau, Table HH6 Average Population Per Household and Family: 1940 to Present, Average number of adults per family, 2008, Accessed January 28, 2018
    6. Minimum Payments and Debt Paydown in Consumer Credit Cards, Benjamin J. Keys and Jialan Wang, Page 59, Table A-1 Summary Statistics by Payer Type, Accessed on January 28, 2018

    Estimate G:

    76.6% of people with credit reports had balances on credit cards in September 2008a x 240 million adults with credit reports in Q3 2008b= 183 million credit card users.

    $866 billion in outstanding credit card debt in Q3 2008c
    Average balance of $3,412 for “full payers.”f
    33% full payersf

    [$866 billionc - ($3,412f (full payer balance) * 33% full payerf * 183a/b million credit card users)] / (183a/b million credit card users * (100% - 33%f not full payers)) = $5,365

    Estimate H:

    76.6% of people with credit reports had balances on credit cards in September 2008a x 240 million adults with credit reports in Q3 2008b= 183 million credit card users.

    $866 billion in outstanding credit card debt in Q3 2008c
    Average balance of $3,412 for “full payers.”d
    44.5% in debtd

    [$866 billion - ($3,412 (full payer balance) * (100% - 44.5% (estimate of full payer)) * 240 million people with credit reports)] / (240 million people with credit reports * (44.5% in debt)) = $6,352

    Estimate I:

    Average estimated credit card debt per person is $5,858.

    Estimate J:

    Average per person credit card is $5,85810I X 1.92 adults per housee = $11,248.

  10. Calculated metric using:
    1. U.S. Bureau of the Census, Real Median Household Income in the United States [MEHOINUSA672N], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MEHOINUSA672N, Accessed January 28, 2018.
    2. Average household credit card debt Metric 6

    Credit card debt to income ratio = 8,0683b/59,039a=14.7%

  11. Calculated metric using:
    1. U.S. Bureau of the Census, Real Median Household Income in the United States [MEHOINUSA672N], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MEHOINUSA672N, Accessed January 28, 2018.
    2. Average household credit card debt Metric 12J

    Credit card debt to income ratio = 11,248b/56,076a=20.1%

  12. November 2017 Report on Household Debt and Credit, Federal Reserve Bank of New York, Page 12, % of Total Balance 90+ Days Delinquent, Credit Cards, Accessed on January 28, 2018
  13. 2016 Survey of Consumer Finances, Board of Governors of the Federal Reserve System, Table 13 16 Means Credit Card Debt, Accessed on January 28, 2018
  14. Statement balances are the balances owed to a credit card company at the end of a billing cycle. Full payers will pay off the entirety of their statement balance each month. Finding an estimate of full payers’ statement balances was not an easy task. The Federal Reserve Bank of New York does not provide estimates of full payers compared to people who carry a balance.In order to get our estimates, we turned to academic research outside of the Federal Reserve Banks. In the paper, Minimum Payments and Debt Paydown in Consumer Credit Cards by Benjamin J. Keys and Jialan Wang, we found robust estimates of the statement balances of “full payers.” According to their analysis (see Table 1-A), full payers had mean statement balances of $3,412 (when summarized across all credit cards) before they went on to pay off the debt.We multiplied $3,412 by the estimated number of full payers to get the estimated balances of full payers.
  15. Calculated Metric using the following sources:
    1. Federal Reserve Bank of New York/Equifax Consumer Credit Panel, tabulated by the Federal Reserve Banks of Philadelphia and Minneapolis and accessed via the Consumer Credit Explorer, % with Credit Card Debt September 2008, Accessed on January 28, 2018
    2. November 2017 Report on Household Debt and Credit, Federal Reserve Bank of New York, Page 20 and Page 3, Calculated metric, number of people with credit reports Q3 2008 Accessed on January 28, 2018
    3. November 2017 Report on Household Debt and Credit, Federal Reserve Bank of New York, Page 3, Outstanding credit card balances Q3 2008, Accessed on January 28, 2018
    4. Minimum Payments and Debt Paydown in Consumer Credit Cards, Benjamin J. Keys and Jialan Wang, Page 59, Table A-1 Summary Statistics by Payer Type, Accessed on January 28, 2018
    5. Survey of Income and Program Participation, 2008 Panel, Wave 4, US Census Bureau, Debt by Year, Table 2. Percent Holding Debt for Households, by Type of Debt and Selected Characteristics: 2009, Credit card debt, Accessed on January 28, 2018

    Estimate G:
    76.6% of people with credit reports had balances on credit cards in September 2008a x 240 million adults with credit reports in Q3 2008b= 183 million credit card users.

    $866 billion in outstanding credit card debt in Q3 2008c
    Average balance of $3,412 for “full payers.”d
    33% full payers, we calculated

    $866 billionc - ($3,412d (full payer balance) * 33% full payerd * 183 million credit card usersa/b) = $659 billion

    Estimate H:
    76.6% of people with credit reports had balances on credit cards in September 2008a x 240 million adults with credit reports in Q3 2008b= 183 million credit card users.

    $866 billion in outstanding credit card debt in Q3 2008c
    Average balance of $3,412 for “full payers.”d
    44.5% full payerse

    $866 billionc - ($3,412d (full payer balance) * 44.5% full payere * 183 million credit card usersa/b) = $518 billion

    Estimate I:
    Average estimated credit card debt is $589 billion.

  16. Calculated metric using the following sources:
    1. Federal Reserve Bank of New York/Equifax Consumer Credit Panel, tabulated by the Federal Reserve Banks of Philadelphia and Minneapolis and accessed via the Consumer Credit Explorer, % with Credit Card Debt September 2008, Accessed on January 28, 2018
    2. November 2017 Report on Household Debt and Credit, Federal Reserve Bank of New York, Page 20 and Page 3, Calculated metric, number of people with credit reports Q3 2008 Accessed on January 28, 2018
    3. Survey of Income and Program Participation, 2008 Panel, Wave 4, US Census Bureau, Debt by Year, Table 2. Percent Holding Debt for Households, by Type of Debt and Selected Characteristics: 2009, Credit card debt, Accessed on January 28, 2018
    4. Minimum Payments and Debt Paydown in Consumer Credit Cards, Benjamin J. Keys and Jialan Wang, Page 59, Table A-1 Summary Statistics by Payer Type, Accessed on January 28, 2018

    Notes:

    76.6 percent of the adult population uses credit cardsa X 240 million adults with credit reportsb = 183 million credit card users X 44.5% with debtc = 82 million with credit card debt

    76.6% of the adult population uses credit cardsa X 240 million adults with credit reportsb = 183 million credit card users X 67% with debtd = 123 million with credit card debt

    Average estimate is 102 million with credit card debt

  17. Calculated metrics using the following sources:
    1. 2016 Report on the Economic Well-Being of U.S. Households, Board of Governors of the Federal Reserve System, Page 35, Accessed on January 28, 2018
    2. Minimum Payments and Debt Paydown in Consumer Credit Cards, Benjamin J. Keys and Jialan Wang, Page 59, Table A-1 Summary Statistics by Payer Type, Accessed on January 28, 2018

    Notes:
    56% carrying debta x 199 million credit card users1 = 110 million in debt
    67% carrying debtb x 199 million credit card users1 = 134 million in debt

  18. Calculated metric using the following sources:
    1. Current Population Survey, U.S. Census Bureau, Table HH6 Average Population Per Household and Family: 1940 to Present, Average number of adults per family, 2008, Accessed January 28, 2018
    2. 2016 Survey of Consumer Finances, Board of Governors of the Federal Reserve System, Table 13 16, Credit Card Debt, Accessed on January 28, 2018

    43.9% of U.S. households carry credit card debtb x 126.24 million U.S. householdsa = 55.4 million households

  19. Calculated metric using the following sources:
    1. Current Population Survey, U.S. Census Bureau, Table HH6 Average Population Per Household and Family: 1940 to Present, Average number of adults per family, 2008, Accessed January 28, 2018
    2. 2016 Report on the Economic Well-Being of U.S. Households, Board of Governors of the Federal Reserve System, Page 35, Accessed on January 28, 2018

    55% of U.S. households carry credit card debtb x 126.24 million U.S. householdsa = 69.4 million households

  20. 2016 Survey of Consumer Finances, Board of Governors of the Federal Reserve System, Table 13 16, Credit Card Debt, Accessed on January 28, 2018
  21. Do we know what we owe? Consumer debt as reported by borrowers and lenders, Meta Brown, Andrew Haughwout, Donghoon Lee, and Wilbert van der Klaauw, Federal Bank of New York Economic Policy Review, Page 27, Table 2 SCF and CCP Househohold debt by account type, Accessed on January 28, 2018
  22. 2016 Survey of Consumer Finances, Board of Governors of the Federal Reserve System, Table 13 16 Means, Credit Card Debt, Accessed on January 28, 2018
  23. Do we know what we owe? Consumer debt as reported by borrowers and lenders, Meta Brown, Andrew Haughwout, Donghoon Lee, and Wilbert van der Klaauw, Federal Bank of New York Economic Policy Review, Page 27, Table 2 SCF and CCP Househohold debt by account type, Accessed on January 28, 2018
  24. The Complex Story of American Debt, Pew Charitable Trusts, Page 9, Accessed on January 28, 2018
  25. Minimum Payments and Debt Paydown in Consumer Credit Cards, Benjamin J. Keys and Jialan Wang, Page 59, Table 1 Summary Statistics by Payer Type, Accessed on January 28, 2018
  26. Recent Developments in Consumer Credit Card Borrowing, Graham Campbell, Andrew Haughwout, Donghoon Lee, Joelle Scally, and Wilbert van der Klaauw, Accessed on January 28, 2018
  27. Board of Governors of the Federal Reserve System (US), Commercial Bank Interest Rate on Credit Card Plans, Accounts Assessed Interest [TERMCBCCINTNS], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/TERMCBCCINTNS, January 24, 2017.November 2017 interest rate on accounts assessed interest 14.99%: $10,000 * 14.99% = $1,499.
  28. Minimum Payments and Debt Paydown in Consumer Credit Cards, Benjamin J. Keys and Jialan Wang, Page 59, Table 1 Summary Statistics by Payer Type, Accessed on January 28, 2018
  29. $4,3505D * 14.99%28 = $652
  30. $4,5555E * 14.99%28 = $683
  31. Minimum Payments and Debt Paydown in Consumer Credit Cards, Benjamin J. Keys and Jialan Wang, Page 59, Table 1 Summary Statistics by Payer Type, Accessed on January 28, 2018
  32. 2017 State of Credit Report”, Experian, Accessed January 28, 2018
  33. Board of Governors of the Federal Reserve System (US), Commercial Bank Interest Rate on Credit Card Plans, Accounts Assessed Interest [TERMCBCCINTNS], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/TERMCBCCINTNS, Accessed January 28, 2018
  34. U.S. Bureau of the Census, Sources of Revenue: Credit Card Income from Consumers for Credit Intermediation and Related Activities, All Establishments, Employer Firms [REVCICEF522ALLEST], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/REVCICEF522ALLEST, September 7, 2017.
  35. Calculated Metric using the following sources:
    1. State Level Household Debt Statistics 1999-2016, Federal Reserve Bank of New York, population, Accessed January 28, 2018
    2. State Level Household Debt Statistics 1999-2016, Federal Reserve Bank of New York, Credit card balance per capita, Accessed January 28, 2018
    3. Federal Reserve Bank of New York/Equifax Consumer Credit Panel, tabulated by the Federal Reserve Banks of Philadelphia and Minneapolis and accessed via the Consumer Credit Explorer, % with credit card debt, Accessed on January 28, 2018
    4. Minimum Payments and Debt Paydown in Consumer Credit Cards, Benjamin J. Keys and Jialan Wang, Page 59, Table 1 Summary Statistics by Payer Type, Accessed on January 28, 2018
    5. 2016 Report on the Economic Well-Being of U.S. Households, Board of Governors of the Federal Reserve System, Page 35, Accessed on January 28, 2018

    Notes:
    Total credit card balance of state= Per capita credit card balancesb x State populationa
    Number of credit credit card users= Populationa x % carrying credit card balancesc
    Balance of transactors= $3,412d X 45%e X Populationa x % carrying credit card balancesc
    Population carrying credit card debt= 55%e X Populationa

    Average credit card balance = (Total Credit Card Balance of state - Balance of Population Not Carrying Debt) / Population Carrying Credit Card Debt

  36. Federal Reserve Bank of New York/Equifax Consumer Credit Panel, tabulated by the Federal Reserve Banks of Philadelphia and Minneapolis and accessed via the Consumer Credit Explorer, % With Severely Delinquent Credit Card Debt, Accessed on January 28, 2018
  37. Federal Reserve Bank of New York/Equifax Consumer Credit Panel, tabulated by the Federal Reserve Banks of Philadelphia and Minneapolis and accessed via the Consumer Credit Explorer, Credit Card balance by age, Accessed on January 28, 2018

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Hannah Rounds
Hannah Rounds |

Hannah Rounds is a writer at MagnifyMoney. You can email Hannah at hannah@magnifymoney.com

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Best of

RANKED: The Best Tax Software of 2018

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

If you’re like most Americans, you dread filing your taxes. You have to track down the right forms, deal with the IRS and try to remember all your deductions and credits. That’s why so many people turn to online tax software to help file taxes. Great tax software simplifies the filing process without draining your wallet. But choosing the right software can be as much work as filing your taxes.

To help you choose the right software, we’ve tested 10 of the leading online tax software packages.

We’ve ranked each software on the following criteria: usability, helpfulness of support articles, availability of audit support and accessibility of tax and technical support. Then, we compared these criteria to the price to determine which software package is best for your situation.

Which tax software fits your needs? Find out below.

Best tax software of 2018

Best bargain for tax software: H&R Block More Zero

Of the 10 tax software packages we reviewed, only two allow all users to file state and federal taxes for free (Credit Karma Tax and DIY Tax). Unfortunately, Credit Karma suffers from bugs and inadequate technical support, and DIY Tax suffers on usability. This year’s best bargains offer the most functionality for the lowest price.

H&R Block More Zero H&R Block More Zero offers the best free software for the most users in 2018. Not only can you file free online, you can also use the H&R Block Tax Prep app to complete your filing.

Users who qualify for the More Zero package will find an easy-to-use Q+A interface, robust knowledge articles and free technical support alongside free state and federal filing. The More Zero software allows users to import their W-2 and 1099-INT forms. Plus, you can deduct student loan interest, property and real estate taxes and mortgage interest. On top of these deductions, you’ll be free to claim most major credits including the Earned Income Tax Credit, The Child Tax Credit and Dependent Care Credits. Among the top tax filing services, this is the most expansive free option available.

Unfortunately, not all users will qualify for H&R Block’s More Zero offer. If you need to declare investment income, self-employment income or you need to itemize beyond home ownership, H&R Block will charge you.

Runner-up: FreeTaxUSA

FreeTaxUSA offers free federal tax filing, but state filing costs an additional $12.95 for all users. FreeTaxUSA offers a question-and-answer interface, and in-software calculators that make it easy enough for beginners to file their taxes. FreeTaxUSA supports most major forms, so even people with rental properties, self-employment income or credits to claim get the same prices.

FreeTaxUSA doesn’t have as many import options, but it does allow you to import your previous returns (even from a competitor) to make comparisons easier. Plus, all users get email support for tax questions and technical support. For people who don’t qualify for H&R Block’s More Zero offer, FreeTaxUSA offers a bargain-priced alternative.

Best for Simple Filing: TurboTax Absolute Zero

Simple filers are W-2 employees who claim the standard deduction. You don’t earn money on the side, and your only other income comes from bank interest or dividends. You typically file as single or married filing jointly, and you want filing your taxes to take as little time as possible.

TurboTax Absolute Zero If you earn less than $100,000, and you don’t need to itemize your taxes, TurboTax Absolute Zero is likely the best software. You can use the highly-rated TurboTax app to snap pictures of your W-2 and file your taxes from your home. The Absolute Zero service supports student loan interest deduction, the saver’s tax credit and child-related tax credits.

Runner-up: H&R Block More Zero

H&R Block’s More Zero offers free state and federal filing for qualified users. Since H&R Block doesn’t limit their More Zero package to people earning less than $100,000, this is a great software for simple filers with higher incomes. With More Zero, you can claim all the deductions and credits that TurboTax offers, plus you can itemize your homeownership expenses.

The H&R Block user experience isn’t quite as easy to navigate as TurboTax’s (and it’s app isn’t as highly rated), but it is still an excellent choice for many filers.

Best for Maximizing Deductions and Credits: TaxSlayer Classic

Charitably-inclined people, most homeowners, parents who pay for child care, and people who qualify for the earned income tax credit may want to maximize deductions and credits.

TaxSlayer Classic TaxSlayer Classic offers federal filing for $17 and state filing for $22. The software offers a clean interface with a straightforward interview style for filing. For maximizing deductions and credits, you’re not likely to find a better software for the price. TaxSlayer gives you access to technical support, but you need to upgrade to ask tax-related questions.

Runner-up: FreeTaxUSA Free

FreeTaxUSA uses an interview-style interface to help users maximize deductions and credits. Unlike most software packages, FreeTaxUSA doesn’t force you to upgrade to itemize deductions or search for all major credits. You will pay nothing for federal filing and $12.95 per state. The interface is clean, and the interview questions aren’t stuffed with jargon. Even first-time filers should feel comfortable using the software.

FreeTaxUSA doesn’t have the same visual appeal or super-simple navigation of top competitors, but it offers a decent user experience at a fraction of the price of some of the top competitors.

Easiest for New Filers: H&R Block More Zero

Filing taxes for the first time can be intimidating, but a great tax software can put new filers at ease. When making recommendations for new filers, we prioritized the simplicity of the user interface and easy access to tax professionals.

H&R Block More Zero Many new filers will qualify for H&R Block’s More Zero free federal and state filing. H&R Block offers an easy-to-use interface that will make sense for first-time filers, plus it has lots of easy to understand articles and help buttons.

If you’re not feeling confident that you completed your taxes correctly, you can opt for the $49.99 Tax Pro Review. The certified tax professionals can review your return and offer expert guidance to be sure it’s done properly.

Runner-up: Credit Karma Tax

New filers who need to itemize their taxes, have self-employment income, capital gains or rental income won’t qualify for H&R Block More Zero. For these categories, Credit Karma Tax offers a free alternative for new filers. If you run into issues using Credit Karma Tax, you can chat with a live tax product professional. Plus, qualified filers can get an interest-free federal tax refund advance loan of up to $1,000 using Credit Karma’s Early Bird Advance.

Unfortunately, this recommendation has to come with a warning. Credit Karma has struggled with tech-related issues this year, and its customer service is overburdened. If you run into issues, you may want to consider an alternative option.

Best Audit Protection: FreeTaxUSA Deluxe

The IRS has the right to audit anyone, but people who have tax profiles that differ from the norm are more likely to get audited. No tax software (or accountant) can prevent you from getting audited, but some services will give you help during an audit. The best audit assistance from a tax software includes personal help from a tax specialist or an accountant. When you purchase audit assistance, you can expect that a tax specialist will help you understand IRS instructions if you get audited. They will also help you write responses to IRS notifications, and develop a plan to prepare for the audit.

FreeTaxUSA Deluxe FreeTaxUSA Deluxe costs $6.99 for the software, and an additional $0 for federal filing and $12.95 for state filing. The Deluxe upgrade doesn’t change the underlying software, but Deluxe users get an audit assistance guarantee. If you’re audited you’ll get personal assistance from a tax professional. The tax professional will help you understand IRS directions, and help you prepare for your audit. While the software isn’t quite as easy to use as major filing services (like H&R Block or TurboTax), the audit assistance is the lowest price on the market.

Runner-up: TaxSlayer Premium

TaxSlayer Premium uses an interview style and info bubbles to guide users through their returns. In addition to the excellent user experience, TaxSlayer Premium (and Self-Employed) offer audit assistance. If the IRS audits you, a trained tax professionals will help you prepare for the audit, and understand what the IRS needs from you. TaxSlayer Premium costs $35 for federal filing and $22 for state filing. TaxSlayer costs more than FreeTaxUSA, but it offers a slightly better user experience.

Best for Investors: H&R Block Premium - Online Version

If you buy and sell stocks, bonds, or options outside of your tax-advantaged retirement accounts, you need a tax software that can handle all your information. The best tax software for investors allows you to connect directly to your brokerage accounts. It should easily differentiate between dividend income, and short and long term capital gains.

H&R Block Premium H&R Block Premium online software costs $54.99 for federal filing and $36.99 for state filing. Although this is more expensive than other software services, the price is justified. H&R Block connects directly to your brokerage account to calculate the tax you owe. Connecting to your brokerage not only saves you time (a must if you’re an active trader), it can save you money too. H&R Block calculates your cost basis for you. This makes it possible for the software to accurately calculate gains and losses and differentiate between short and long term capital gains. H&R Block offers an easy way for investors to accurately calculate what they owe (and not pay a penny too much).

Runner-up: TurboTax Premier

TurboTax offers an exceptionally strong user experience for stock market investors who need to report stock sales, mutual fund sales or deal with Employee Stock Purchase Plans. TurboTax connects to thousands of brokerages, and they make it easy to accurately report your income. Plus, they calculate your cost basis in a stock which can minimize your taxes. TurboTax Premier online software costs $59.99 for federal filing and $36.99 for state filing. It’s a little bit more expensive than H&R Block, but it also offers a slightly better experience for investors.

Best for real estate investors: TurboTax Premier

Taxes for real estate investors can be confusing. Real estate investors can deduct tons of expenses, and they need a great software to help them calculate their deductions. In particular, a great tax software needs to help you depreciate your property, find and deduct real estate expenses and calculate amortization expenses.

To determine the best software, we prioritized features like helpful support articles, intuitive depreciation and amortization calculators and access to expert tax support.

TurboTax Premier TurboTax Premier costs $59.99 for federal filing and $36.99 for state. TurboTax has robust calculators and easy to understand articles that help users minimize their taxes. The step-by-step instructions make TurboTax a top choice for both new and experienced real estate investors. On top of that, QuickBooks users can upload their expenses directly to TurboTax, and TurboTax will do the hardest work for you.

Runner-up: TaxSlayer Premium

TaxSlayer Premium costs $35 for federal filing and $22 for state filing. The real estate portion of TaxSlayer has real estate calculators that are still simple enough for most real estate investors. If you get confused, or you’re not sure how to classify an expense, you can speak to a tax specialist who can guide you to the right decisions.

TaxSlayer doesn’t allow you to import any real estate forms, and the step-by-step guidance isn’t as robust as TurboTax’s. However, TaxSlayer costs 40 percent less than TurboTax and comes with audit assistance. For the right real estate investor, TaxSlayer could be a bargain.

Best for the self-employed: TaxSlayer Classic or Self-Employed

Are you a freelancer or contractor? If so, you may need help deducting many business-related expenses. This means that taxes can get messy in a hurry. The best tax software for self-employed people makes it easy to claim business deductions. It will also offer robust explanations that will help you understand amortizing equipment expenses and whether you qualify for a home-office deduction.

TaxSlayer Classic TaxSlayer Classic uses a simple interview filing system that makes it easy for the self-employed to declare their income and minimize deductions. TaxSlayer Classic supports all forms needed to minimize deductions. At a cost of just $17 for federal filing and $22 for state filing, TaxSlayer offers a top software experience at a reasonable price. If you prefer to get help from a professional (and get audit assistance), you can upgrade to TaxSlayer Self-Employed for $55 (federal and state filing included).

Runner-up: TurboTax Self-Employed

TurboTax makes it easy for those who are self-employed to find deductible expenses using its interview-style interface. It offers dozens of articles that can help self-employed folks understand their taxes better. Self-employed filers who use QuickBooks for their bookkeeping can effortlessly import their expenses. Once you import your data from QuickBooks, TurboTax does the work of categorizing expenses, and deducting them.

TurboTax Self-Employed is one of the most expensive tax software options online; it costs $89.99 for federal filing and $36.99 for state filing. It comes with a complimentary one-year subscription to QuickBooks Self-Employed accounting software (offer not valid if you’re a QuickBooks subscriber already on a payment plan).

Best for getting your return fast: Credit Karma Tax

Credit Karma Tax is offering an “Early Bird Advance” of up to $1,000 for qualified filers. The advance comes on a prepaid debit card (American Express Serve® Card).

Credit Karma Tax Technically, the advance is an interest-free loan issued through Credit Karma’s bank partner, MetaBank. If you accept the advance, the IRS will send your full refund to MetaBank. MetaBank will repay the loan using the refund, then send the remainder to you.

Credit Karma Tax is a completely free filing service, and it has a decent user interface. Unfortunately, it has had several technical glitches this year, and Credit Karma has struggled to respond in a timely manner. If you run into trouble, you may want to try a different filing service.

Runner-up: TurboTax Self-Employed

TurboTax makes it easy for those who are self-employed to find deductible expenses using its interview-style interface. It offers dozens of articles that can help self-employed folks understand their taxes better. Self-employed filers who use QuickBooks for their bookkeeping can effortlessly import their expenses. Once you import your data from QuickBooks, TurboTax does the work of categorizing expenses, and deducting them.

TurboTax Self-Employed is one of the most expensive tax software options online; it costs $89.99 for federal filing and $36.99 for state filing. It comes with a complimentary one-year subscription to QuickBooks Self-Employed accounting software (offer not valid if you’re a QuickBooks subscriber already on a payment plan).

Best for small businesses: TurboTax Business

Sole proprietors and single-member LLCs can also use tax software for self-employed filers. As long as the software supports a Schedule C, it will work for your small business needs.

If you’re part of a partnership, a corporation or a multi-member LLC, then you need more than the standard tax software that we reviewed above.

Corporations need software that supports Form 1120. S Corporations (with more than one member) need tax software that supports Form 1120S. Partnerships and multi-member LLCs need software that supports Form 1065.

If you need business tax software, consider one of these options.

TurboTax Business

Total cost:

  • $159.99 for federal software (up to five federal e-files)
  • $49.99 per state software
  • $19.99 per state e-filing fee.

TurboTax Business offers the same interview-style interface that consumers love, but it offers increased functionality. Small-business owners can use it to create unlimited W-2 forms and 1099-MISC forms.

H&R Block Premium and Business

Total Cost:

  • $79.95 for federal software (up to five federal e-files)
  • $39.95 per state (first state free)
  • $19.95 per state filing.

H&R Block offers an excellent interview-style user interface with increased functionality such as creating employee forms. On top of this, you can chat with a live tax expert after you purchase the software. This software supports the major forms for businesses, estate and trusts and nonprofit organizations.

TaxAct for Small Businesses

Total costs:

  • $97 State and Federal Bundle
  • $60 Federal filing only

TaxAct has a slightly more stripped-down user interface than H&R Block or TurboTax, but business owners can easily complete everything they need to do. TaxAct comes with unlimited tax support from a professional when you purchase the product.

Tax Software Pricing, Plans, and Insights

1040.com

1040.com - Tax Software Pricing According to 1040.com, tax filing should be smart and simple. 1040.com is on point by offering free live chat and email-based technical support. They also have support articles that are approachable and informative. Simple filers will have an easy time using 1040.com. Plus if you qualify for a 1040EZ (meaning you have W-2 income and no dependents and you don’t need to itemize), you can get completely free filing.

Unfortunately, people with more complex filing needs will find 1040.com unusable. It doesn’t have built-in calculators that real estate investors or stock market investors need to file accurately. The higher-priced levels don’t offer the functionality to justify the price.

If you qualify for the free edition of 1040.com, consider using it, but other filers will need to walk away.

 

Free $24.95 $44.95
Price $0 Federal
$0 Free
$24.95 Federal
$19.95 State
$44.95 Federal
$24.95 State
Best For 1040EZ (No Dependents, income under $100,000) Itemizers, people with children, stock market investors Self-employed, real estate investors, people with income

Superlatives: None

Credit Karma Tax

Credit Karma Tax Credit Karma Tax offers free federal and state filing for all users. Even though Credit Karma is completely free, it supports almost all major forms, so you can be confident that it has what you need.

Credit Karma’s refund dashboard shows you how income, deductions and credits influence your tax refund. In addition to the helpful refund tracker, Credit Karma offers an Early-Bird Advance. Early filers may qualify for an interest free loan of $500, $750 or $1,000 on a Serve card. Right now, Credit Karma is the only free online filing service that offers refund advances. Credit Karma also offers 24/7 live chat support from tax specialists.

As far as free filing services go, Credit Karma Tax looks great on paper. Even though it did away with the interview-style navigation, it still has a decent user interface. Unfortunately, during testing, we found a few bad gateways, and the default settings “hide” certain forms from users which makes navigation difficult. Credit Karma Tax doesn’t allow users to import forms (other than prior year tax returns and W-2 forms), which can be a pitfall for active traders and real estate professionals.

Adding to those negatives, Credit Karma seems to struggle with their tech support. Users can request tech support via email, but Credit Karma has posted that response time may be delayed due to the high volume of help requests.

Superlatives: Best for getting your refund fast, runner-up easiest for new filers

DIY Tax

DIY Tax DIY Tax offers 100% free federal and state filing for everyone. The software is accurate, and it allows you to import your prior year’s taxes for your reference.

However, DIY Tax has a cluttered user interface. With so much jammed on every page, you might miss something important while filing. Real estate investors and small business owners need to be careful with this platform, since the depreciation and amortization calculators can be confusing. The software offers free technical support via live chat or email, but they push Liberty Tax Service offices for tax support (Liberty Tax is their parent company). As you file, you will see ads for their offices in the software. Often, these ads include a coupon for an office visit. Remember, filing in a Liberty Tax office isn’t free.

Superlatives: None

eSmart Tax

eSmart Tax eSmart Tax and DIY Tax are the same software package. However, you have to pay for eSmart Tax. Why would you pay? The Deluxe and Premium packages offer unlimited phone or email support from tax specialists, which can prove helpful. But in most cases, eSmart Tax isn’t a great option.

 

Free Basic Deluxe Premium
Price $0 Federal $29.99 State $24.95 Federal
$35.95 State
$38.95 Federal
$35.95 State
$49.95 Federal
$35.95 State
Best For 1040EZ Homeowners, people with dependents, sole proprietors, freelancers without inventory and with less than $5,000 in expenses Stock market investors with dividend income, self-employed people with home office deductions or inventory expenses Stock market investors with capital gains or losses, real estate investors, people who sold a home in the previous years

Superlatives: None

FreeTaxUSA

FreeTaxUSA Deluxe FreeTaxUSA isn’t actually free, but it’s one of the best bargains in the tax software market. The software guides users through an interview process that makes filing easy. The interface is clean, so you don’t have to worry about missing something important. FreeTaxUSA makes it easy to import your tax return from a competitor, so you can review year-to-year changes in your taxes. You can also chat with tax and technical specialists if you run into issues. This kind of support makes FreeTaxUSA stand out among other bargain priced software services.

FreeTaxUSA offers two pricing tiers. At either level, you’ll pay at least $12.95 for state filing, and you can upgrade to a Deluxe software package for an additional $6.99. The Deluxe upgrade gives you priority support (meaning you get to cut in line if you need tax help). Upgrading also gives you access to a tax specialist if you’re audited.

 

Free Deluxe
Price $0 Software fee
$0 Federal
$12.95 State
$6.99 Software fee
$0 Federal
$12.95 State
Best For All major schedules supported Anyone who wants audit support

Superlatives: Best Audit Protection, best bargain for self-employed workers

H&R Block Online

H&R Block H&R Block is one of the biggest names in tax software for good reason. People with complex tax returns will love the value that H&R Block offers. H&R Block offers unlimited technical support to all filers, and phone and chat tax support for those who pay. H&R Block’s More Zero option is one of the most inclusive free filing options on the market. Homeowners, parents, and savers with W-2 income can maximize their refund using the free option.

H&R Block offers easy navigation, helpful interview questions, and robust articles that can help you untangle even the most complex filing situation. You can also import information from your brokerage account which makes filing capital gains taxes a snap. If you run into issues, you can either ask a tax professional, or you can upgrade to the $44.99-$89.99 Tax Pro Review. With a Tax Pro Review, an H&R Block Tax Professional will review your return before you file, and fix any errors.

The only disappointment is that H&R Block online filing customers do not get a guarantee of audit assistance. To get audit assistance from H&R Block you must purchase a desktop software or visit one of the offices.

H&R Block’s software isn’t quite as easy to use as TurboTax, but it’s a bit less expensive. In particular, freelancers and self-employed people with basic expenses will see huge value since they can purchase the Premium edition.

As an added bonus, you can get up to a 5% boost on your refund if you choose to have your refund loaded to an Amazon gift card.

 

More Zero Deluxe Premium Self-Employed
Price $0 Federal
$0 State
$49.99 Tax Pro Review
$34.99 Federal
$36.99 State
$79.99 Tax Pro Review
$54.99 Federal
$36.99 State
$89.99 Tax Pro Review
$74.99 Federal
$36.99 State
$89.99 Tax Pro Review
Best For Homeowners, parents, people with W-2 income Stock market investors dividend income only, self-employed with basic expenses, other itemizers Real estate investors, self-employed with less than $5000 in expenses and no inventory, stock market investors with capital gains Self-employed people, Uber drivers

Superlatives: Best bargain, easiest for new filers, best for investors, runner-up best for simple filing

OLT.com

OLT.com OLT.com offers bargain basement pricing, and it supports all major filing situations. Unfortunately, the low price shows in the interface. It’s cluttered, difficult to navigate and doesn’t allow many imports. OLT.com has a large volume of support articles, but it stuffs the articles with confusing tax-jargon.

The one bright spot for this software is the $7.95 Premium upgrade that brings audit support and tax help from a professional. Even with this value, we don’t recommend OLT.com for most situations. This year, you can find a better software at lower prices.

 

Free Premium
Price $0 Federal
$9.95 State
$7.95 Federal
$7.95 State
Best For All major schedules supported Anyone who wants audit support

Superlatives: None

TaxAct

TaxAct TaxAct uses a question-and-answer style to guide you through your taxes. It offers helpful articles, and you can receive phone and email support from tax and technical professionals. If you want audit assistance from TaxAct, you must upgrade to the expensive Premium level.

If you’re a stock market investor, you can use TaxAct’s stock market assistant to help you minimize your capital gains taxes. This feature becomes available at the self-employed level. It’s a helpful tool, but not as good as connecting directly to your brokerage accounts.

For the most part, TaxAct simplifies tax filing, but it costs more than it should. TaxAct costs nearly as much as industry leaders H&R Block and TurboTax, but it does not provide the same value.

 

Free Plus Self-Employed Premium
Price $0 Federal
$0 State
$29.95 Federal
$37 State
$44.95 Federal
$37 State
$59.95 Federal
$37 State
Best For 1040EZ, 1040A Itemizers, stock market investors with only dividend income, real estate investors Self-employed, stock market investors with capital gains and losses People seeking audit defense

Superlatives: None

TaxSlayer

TaxSlayer TaxSlayer has an incredible user interface and helpful support articles. When it comes to itemizing deductions or finding credits, it is one of the easiest to use tax software packages on the market. In addition to a great software experience, TaxSlayer also premiered refundNOW in 2018. Qualified filers can get an interest-free advance of up to $1000 from TaxSlayer’s partner bank, River City Bank. The tax refund comes either via a prepaid debit card or a direct deposit.

Unlike most tax software, TaxSlayer supports all forms on its second-tier Classic level. If you’re a real estate investor or a self-employed worker, this means that you can complete your return at a low price. Their Premium and Self-Employed levels gives you access to live chat support, audit protections and help from tax professionals.

When you’re comparing prices at TaxSlayer note that Classic, Premium and Self-Employed offer the same software but have different support features.. The Classic level doesn’t include help from tax professionals or audit assistance, which are included with Premium or Self-Employed levels. Premium and Self-Employed are virtually identical except for their pricing. The Self-Employed option is $2 cheaper if you have to file both state and federal taxes, but Premium is $20 cheaper if you only need to file federal taxes.

 

Simply Free Classic Premium Self-Employed
Price $0 Federal
$0 First State ($22 each additional)
$17 Federal
$22 State
$35 Federal
$22 State
$55 (Federal and State included)
Best For 1040EZ All others (itemizers, stock market investors, real estate investors, self-employed, etc.) People who want audit assistance or help from a tax professional and DO NOT need to file a state return People who want audit assistance or help from a tax professional and MUST file a state return

Superlatives: Best for maximizing deductions and credits, best for self-employed, runner-up best audit protection, runner-up best for real estate investors, runner-up best for getting your refund fast

TurboTax

TurboTax If you’re looking for the Cadillac of tax software, TurboTax again takes the prize. Their interface is easy to navigate, and it offers superior usability for real estate investors, self-employed workers and stock market investors. Paying customers who get stuck can get help from technical professionals. TurboTax takes their support seriously. With your permission, support staff can “draw” on your screen to guide you through tough situations. However, technical support isn’t tax support. If you need help from a tax professional, you have to upgrade to the overpriced $149.99 TurboTax Live option. This gives you on-demand support from a tax professional, and a tax pro will review your taxes before you file.

1040EZ filers get to use TurboTax Absolute Zero for free, but all other filers will pay a far higher price. If you’re just looking to itemize your taxes, TurboTax isn’t worth the price, but active traders, real estate investors and self-employed people may find that the price is worth it.

Unfortunately, TurboTax premium pricing means that some offerings are not worth the money. If you want audit support from TurboTax you have to purchase TurboTax Max. The price of audit support. TurboTax’s MAX costs $44.99 which is a lot higher than audit support from other companies.

 

Absolute Zero* Deluxe* Premier* Self-Employed* TurboTax Live*
Price $0 Federal
$0 State
$39.99 Federal
$36.99 State
$59.99 Federal
$36.99 State
$89.99 Federal
$36.99 State
$149.99 Federal
$36.99
Best For 1040EZ/ 1040A Itemizers Investors, real estate investors Self-employed People who want a review from a CPA

*Anyone can upgrade to TurboTax’s MAX for $44.99.

Superlatives: Best for simple filers, runner-up best for investors, best for real estate investors, runner-up best for self-employed

Tax software FAQs

The IRS sends 90% of refunds within three weeks of receiving the return. The sooner you file, the sooner you can expect your return.

You can check on the status of your refund starting 24 hours after e-filing using the “Where’s my refund?” page from the IRS. You can also check on your refund status using the IRS2Go app.

Tax-related identity theft is the no. 1 reported form of identity theft. However, most theft isn’t the direct result of using online software. Any time you apply for a credit card or use online banking, your information enters the digital world. If this information gets stolen, you’re at risk. Nobody can eliminate the possibility of identity theft, but you can work to protect yourself.

Part of protecting yourself involves only giving out your information on trusted websites. When you file your taxes, you provide all your personally identifiable information to a software service. You need to know whether or not that information is safe.

Every software company that we reviewed is an authorized IRS e-File provider. This means that these sites comply with the security and business standards set forth by the IRS.

None of the software packages we reviewed will sell your personal information to a third party. They require you to use multi-factor authentication. This makes it difficult for hackers to access your personal information. These websites are as secure as possible, but they are not 100% safe.

If you think you’ve been the victim of tax fraud, contact the IRS immediately at 1-800-908-4490 to work with their resolution specialists. You will need to file an identity theft affidavit that explains that someone filed taxes in your name.

If you don’t want to use tax software, you can choose a paper filing option. Each state requires you to mail your check to a different office.

You can also use the IRS’s free electronic fillable forms. However, these offer limited guidance and can be difficult to use. With so many other free options, these should be a last resort.

Finally, you can hire a professional tax preparer to do your taxes for you. Be sure that the person you hire is in the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.

An accountant can save you time, headache, and in some cases, money. Tax professionals must follow the tax code, but their specialized knowledge helps them pick up on deductions or credits that you might miss on your own.

In general, the more complex your tax return, the more you may want to hire an accountant. If you choose to hire an accountant, be sure that they are an authorized tax return preparer. They should sign your return as an authorized preparer.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Hannah Rounds
Hannah Rounds |

Hannah Rounds is a writer at MagnifyMoney. You can email Hannah at hannah@magnifymoney.com

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The Cost of Filing a Sexual Harassment Lawsuit, Plus Ways to Save and Fight

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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Even in the era of the #MeToo movement, the picture is still rather bleak for victims of workplace sexual harassment who may not have the financial means to seek recourse.

According to a 2016 U.S. Equal Employment Opportunity Commission Task Force report, one in every four women have experienced sexual harassment at work. That number could be even higher. That number could be even higher.

Fearing that their claims will be ignored and their careers will be put in jeopardy, as many as 70% of sexual harassment victims choose not to come forward, let alone file legal claims against their abusers, according to Maya Raghu, director of Workplace Equality and Senior Counsel at the National Women’s Law Center.

In a Gallup poll conducted in the wake of the Harvey Weinstein scandal, some 42% of women said they had been sexually harassed.

As movements like #MeToo and Time's Up gain more traction, many more women are coming forward through various channels, and resources are being pulled together to help them battle perpetrators and unlawful practices.

The Gallup survey suggests that the #MeToo social media campaign has encouraged more women to take legal actions against the abuser: About 38% of the women surveyed said they were more likely to sue the perpetrator they believed had sexually harassed them. This is a much higher percentage than the same question garnered 20 years ago (18%).

However, a provision buried in the new 2018 tax law could possibly deter victims from taking legal action than before. In the past, victims could deduct the attorney’s fees from a settlement subject to a confidentiality agreement, so that the amount taxed is equal to the portion of the payment the victim keeps.

Under the current tax law, which was passed late last year, employees who settle sexual harassment lawsuits and agree to a nondisclosure agreement may no longer be able to deduct their legal expenses on their taxes. Instead, they would be taxed on the full settlement.

Sen. Robert Menendez (D-N.J.) proposed this amendment last November before the existing tax bill was signed into law. The proposal came in wake of the #MeToo movement, following a flurry of sexual harassment scandals from Hollywood to Capitol Hill. Legal experts say the provision that was intended to curb corporations from seeking confidentiality — an instrument to keep victims quiet — might have unintentional consequences on the victims’ end: The way the rule is written, it would have the same effect on plaintiffs in such settlements..

Anthony C. Infanti, a professor at the University of Pittsburgh School of Law who focuses on tax law, told MagnifyMoney the provision was written so broadly that other expenses related to sexual harassment claims could be deemed eligible for tax deduction.

For instance, he explained, women going to therapy to discuss sexual harassment subject to a confidentiality agreement may not be allowed to deduct such medical expenses from their taxes.

“It’s so broadly written that it’s not targeted at perpetrators and their employers, who seem to be the intended targets,” he said.

Infanti stressed that many victims may have legitimate reasons for wanting a nondisclosure agreement, whether it is to maintain a low-profile life when the perpetrator is a famous figure, or protect their career. If the price of agreeing to a nondisclosure would be a huge tax bill, this could well prevent from them going through all the grief associated with coming forward in the first place.

“To a certain extent you have to give some agency to the victims, let them also make decisions for themselves rather than having Congress make the decision for them about what they should or shouldn’t be able to do, what’s good for them and what’s not,” Infanti said.

Whether victims will be able to deduct fees from taxes is unclear right now. It’s up to the courts and IRS to interpret the provision. But this gives more reason for sexual harassment victims to seek ways to address the issues without having to suffer from devastating economic hardships.

Once you decide to seek justice, here are the steps you should take, and resources to take advantage of:

“The thing is there are some legal options, but they aren’t perfect,” Raghu told MagnifyMoney. “And it takes a while sometimes to obtain justice, and unfortunately there are no guarantees even for someone who manages to persist, who’s able to find an attorney. It’s very very difficult.”

1. Follow your employer’s reporting guidelines

First, you should look to see if your employer has a sexual harassment policy before reporting the incidents. The employer should conduct an investigation, which doesn’t always happen or isn’t always as thorough as it can be, Raghu said.

But it’s important to go through the internal procedure before seeking external assistance. Raghu said that’s because if someone eventually chooses to file a lawsuit, his or her employer can assert as a defense that the victim didn’t take advantage of the internal reporting procedure.

Read our guide to report sexual harassment at work.

2. File a complaint with the EEOC

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Once an investigation is conducted, or the company doesn’t act, Raghu said the victim can go to his or her federal, state or local civil rights agency, and file a complaint citing discrimination. The EEOC is the federal agency that enforces laws against workplace discrimination. It has offices throughout the country.

Raghu said it is a prerequisite for the victim to file a complaint with the EEOC before filing a lawsuit, and the victim doesn’t necessarily need an attorney at this point.

What happens is that the EEOC will in many cases try to get the parties to come to some resolution without requiring a full-blown litigation. But if that doesn’t happen, the EEOC will investigate, asking the employer for a written answer to the charge. The victim will need to provide documents supporting the complaint, such as evidence of harassment and retaliation. The investigation is based on facts provided by both parties and additional information the EEOC gathers. The agency can either find the claim viable and can go forward with filing a lawsuit in court or they make a determination that the discrimination didn’t occur.

Sexual harassment is considered a form of sex discrimination that violates Title VII of the Civil Rights Act of 1964. If the EEOC determines that sexual harassment did occur after investigation, it will issue the victim a Right to Sue notice.

3. File a lawsuit

Once you have received the letter of Right to Sue, you can file a lawsuit under the federal anti-discrimination law. This has to happen within 90 days of receiving the green light from the EEOC. This is the time when victims need to work with an employment discrimination attorney.

4. Explore alternative options

Many victims may not have the financial means to take their employer or even an individual colleague to court and risk losing their case. Raghu acknowledges that few cases get to the point of trial or even a settlement. If you can’t find any legal defense funding and you still want to take action, you may want to come forward in public, Raghu suggested.

What we’ve seen in the last few months is that many victims have been talking openly about their experiences to the press and on social media, bringing the incidents to light without necessarily going through the legal process.

Catharine A. MacKinnon, who teaches law at the University of Michigan and Harvard University, wrote in a New York Times op-ed that the #MeToo movement is accomplishing what the law has not.

If you suspect the perpetrator has routinely harassed other people, maybe you can find allies in your company, or through former employees. Allegations of sexual harassment are being taken seriously as the social movements against predator behaviors run deep. You may feel more empowered coming forward as a group than battling on your own.

Just last week, 10 women signed a public letter accusing a Northwestern University journalism professor of sexual harassment and assault. The 10 former students of Northwestern’s Medill School of Journalism have received overwhelming public support from alumni and professors. The accused professor denied all the allegations, but will take a leave of absence while the case is being investigated by the university, according to the Chicago Tribune.

5. Prepare for the cost

To be sure, waging a legal battle against workplace sexual harassment can be a costly, time-consuming and mentally exhausting process. Victims may already have experienced substantial economic harms as a result of harassment in the first place. Many cannot afford legal representation, and very few cases get to the point of a trial or even a settlement unless they are representing themselves, Raghu said.

Raghu said some private attorneys may take on a sexual harassment lawsuit on a contingency basis, meaning that the lawyer would charge nothing — or sometimes they may ask the defendants to pay their costs — if you lose the case. On the other end, if the victim wins, the attorney would take anywhere from 20 to 50 percent of the money from a settlement or judgment.

Attorneys’ rates vary depending on the complexity of the case, the location of the attorney and the agreement between the plaintiff and the lawyer. But Raghu said those with a history of reaching larger settlements/judgments may charge a higher percentage for the case. In other cases, she said the lawyer may take a sexual harassment lawsuit on a partial contingency basis, requiring the client to pay for certain expenses, such as court filing fees, travel costs, etc., no matter whether they win or lose the fight.

If you are determined to pursue your rights through the legal system, there is legal and financial assistance available for victims. Here are some examples:

The National Women’s Law Center is the home of the TIME'S UP™ Legal Defense Fund, an initiative launched by women in the entertainment industry on Jan.1, 2018. Over $20 million has been raised to subsidize legal support for individuals who have experienced workplace sexual harassment and retaliation.

A screenshot of the TIME’S UP website.

When victims seek assistance, Raghu said the center connects them to a network of attorneys who will take their case for a reduced fee, or in some cases, pro bono. Depending on circumstances, their cases may be eligible to receive support by the TIME'S UP™ Legal Defense Fund. But there’s no guarantee of representation, Raghu adds.

NWLC’s Legal Network for Gender Equity, launched last October, now has 530 attorneys across the country. It has received almost 1,500 requests for assistance from workplace sexual harassment victims, Raghu said.

Equal Rights Advocates (ERA), a national civil rights organization based in California, defends laws that prohibit sex-based discrimination, and advances gender equality in the workplace partly through representing women in lawsuits. For more information or referrals, contact Equal Rights Advocates.

6. Weigh the pros and cons of signing a nondisclosure agreement

As the new tax law is currently written, people who decide to settle a sexual harassment lawsuit and sign a nondisclosure agreement may no longer be able to claim their legal fees as a deduction on their taxes. This was one way that plaintiffs could formerly offset the taxes they would likely have to pay on the settlement amount.

Infanti said the court and the IRS will be the final interpreters of the new provision under the tax law when such cases appear. At this stage, he said, there is not much that sexual harassment victims who may want to seek a confidentiality agreement can do besides put pressure on their state representatives to amend the law.

Potentially, employees may choose to change what type of claims they are pursuing in order to avoid a huge tax bill.

For example, “if you are a woman of color, you may be experiencing sexual harassment but also racial harassment, or racial discrimination or national origin discrimination that are all related,” Raghu said. “Or maybe there are sex discrimination claims that are not sexual harassment, for example.”

Raghu said all related information can be incorporated into the strategy when attorneys are litigating these cases or trying to negotiate a settlement agreement for the victims. If there are multiple claims other than sexual harassment, perhaps a settlement could be structured in a way that separates the allocation of the settlement from those other claims, so that the related attorney's fees aren’t taxed, according to Raghu.

In any case, this is even more of an incentive to find a qualified attorney knowledgeable in cases of sexual harassment or discrimination who can craft the right strategy for your situation.

7. Know the risks

Reporting sexual harassment comes with potential dangers, which have prevented so many from coming forward. Raghu advises victims to consider a few things before taking action:

  1. Understand what sexual harassment is. A December Reuters/Ipsos poll found that Americans hold very different views on sexual harassment. The EEOC defines sexual harassment as unwelcome sexual advances, requests for sexual favors, other verbal or physical harassment of a sexual nature, as well as offensive comments based on gender, which don’t have to involve sex. Sexual harassment occurs when it creates a hostile or offensive work environment, or when it leads to someone’s unemployment or demotion, according to the EEOC. Learn more about sexual harassment from this NWLC guide.
  2. Don’t be surprised if the employer dismisses your complaint or simply doesn’t believe your account. You may experience retaliation, which has deterred many women from coming forward. Retaliation comes in various forms that include firing, demoting and cutting salaries of an employee who filed a sexual harassment complaint. Retaliation is illegal but happens frequently. In 2013, roughly half of all complaints filed with the EEOC were retaliation allegations, with 42 percent of findings of discrimination based on retaliation, according to the agency.

Therefore, for practical reasons, you should:

  1. Document evidence of harassment, infractions, retaliation, correspondence with your supervisor and the human resources department.
  2. Start looking for other employment while trying to obtain justice. You can reach out to co-workers and former colleagues, and network with your industry contacts for job opportunities.
  3. Start putting money aside in case you have to leave the company as a result of retaliation following your harassment accusation. It is critical that you have a financial cushion to fall back on when you need to move on in your life. Generally, three to six months’ worth of necessary living expenses should be able to navigate you around job loss.

Check out this list of resources put together by the NWLC:

Federal Agencies
Department of Education Office for Civil Rights
Department of Health and Human Services Office for Civil Rights
Department of Labor
Equal Employment Opportunity Commission

General Resources
LawHelp.org
AVVO

Finding an Attorney
American Bar Association
National Bar Association
National Employment Lawyers Association
Directory of Local Bar Associations

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

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Shen Lu is a writer at MagnifyMoney. You can email Shen Lu at shenlu@magnifymoney.com

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Earning Cashback, Reviews

Review: The Amex EveryDay® Credit Card now with a standout balance transfer offer

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities. This site may be compensated through a credit card partnership.

The Amex EveryDay® Credit Card from American Express is a new offer that not only has a longer intro APR period but also a rare $0 balance transfer fee for transfers requested within 60 days of account opening. This feature provides additional value to this card and makes it our top pick for people looking to complete a balance transfer. The other features of the card remain consistent like the rewards program — favoring those who shop at U.S. supermarkets, as well as the offering of Amex exclusive perks like entertainment access and Global Assist® Hotline.

 

New Offer!
The Amex EveryDay® Credit Card from American Express
The Amex EveryDay® Credit Card from American Express

APPLY NOW Secured

on American Express’s secure website

Terms Apply

Rates & Fees

Annual Fee

$0

Intro Purchase APR

0% for 15 months

Intro BT APR

0% for 15 months

BT Fee

$0 balance transfer fee.

Regular Purchase APR

14.24% – 25.24% Variable

Rewards

2x points at U.S. supermarkets, on up to $6,000 per year in purchases (then 1x), 1x points on other purchases.

How the card works

The Amex EveryDay® Credit Card from American Express is a rewards card that doubles as a balance transfer card. Beginning with the rewards program, you can earn 2x points at U.S. supermarkets, on up to $6,000 per year in purchases (then 1x) and 1x points on other purchases. If you spend $500 a month at U.S. supermarkets, you can maximize rewards at the higher rate. Otherwise, this is an OK program considering this is a $0 annual fee card, but you can find a better rewards rate with the $0 annual fee Blue Cash Everyday® Card from American Express.

What is unique about this card is the balance transfer offer. You can benefit from an intro 0% APR for 15 months on balance transfers with a $0 balance transfer fee (for transfers requested within 60 days of account opening). This can save you the typical 3% fee that most cards charge on balance transfers. Once the intro period ends, a 14.24%-25.24% Variable APR applies.

There is also an intro 0% for 15 months on purchases (after, 14.24%-25.24% Variable APR), allowing you to make a large purchase and pay it off during the intro period. This intro period, combined with the balance transfer intro period and rewards program make The Amex EveryDay® Credit Card from American Express a unique offering where cardholders have the option to transfer a balance, pay off a large purchase, and earn rewards on new purchases — all with one card.

How to qualify

American Express products are best for people with good or excellent credit.

What we like about the card

Intro BT fee: This card offers a $0 balance transfer fee for transfers requested within 60 days of account opening. Completing a transfer is a great way to save on the typical 3% BT fee most cards charge.

20% More points: When you make 20 or more transactions in a billing period, you earn 20% more points on those purchases. This effectively increases the value of 1 point to 1.2 points.

Transfer points to frequent traveler programs: You can transfer your points to participating frequent traveler programs mostly on a 1:1 basis (some transfers require more or less points).

2x Points on travel booked with amextravel.com: When you book travel at amextravel.com, eligible travel purchases (prepaid hotel stays, vacation packages, cruises, and more) receive double points.

What we don’t like about the card

Low everyday rewards rate: Purchases in categories other than U.S. supermarkets or in excess of the quarterly cap will earn a low rewards rate that can be beat by other cards. We consider 2 points per dollar spent to be the average, so anything below that is subpar.

What are Membership Rewards® points worth?

Membership Rewards® points can be redeemed in many ways. For each option, point’s worth varies, so some redemption options may be better than others. Here are the ways you can redeem your rewards and how much one point is worth for each option:

  • Frequent flyer programs: Points are often worth $0.01 each, with some worth more or less. For example; 1,000 Membership Rewards® points = 2,000 Hilton Honors Points or 1,000 SkyMiles®.
  • Gift cards: Points are worth $0.01 each.
  • Merchandise: Points are worth $0.005 each.
  • Travel: The value of points vary.
  • Pay with points at checkout or via statement credit: The value of points vary and are often less than $0.01.

Alternatives

Chase Slate<sup>®</sup>

Intro BT APR

0%

Introductory rate

Balance Transfer Fee

$0 intro balance transfer fee when you transfer a balance during the first 60 days your account is open. After 5% of the amount transferred, with a minimum of $5.

Regular Purchase APR

16.24%-24.99%

Variable

Duration

15 months

The Chase Slate® offers the same balance transfer offer as The Amex EveryDay® Credit Card from American Express, but is a more basic card. There are no rewards or standout perks, so this card is better suited for people only looking for a no-frills balance transfer card, or those who don’t want to be distracted by rewards while they pay down debt.

Blue Cash Everyday® Card from American Express

Annual fee

$0

Cashback Rate

3% at U.S. supermarkets, on up to $6,000 per year in purchases (then 1%), 2% at U.S. gas stations & select U.S. department stores, 1% on other purchases

Regular Purchase APR

14.24%-25.24%

Variable

The Amex EveryDay® Preferred Credit Card from American Express has a rewards program that is also geared towards U.S. supermarket shopping, but offers higher rates (it also includes U.S. gas stations in the higher rate). Similar to The Amex EveryDay® Credit Card from American Express, you can increase your points worth, but at a greater rate — earn 50% extra points when you make 30 or more transactions in a billing period.

Bottom Line

The Amex EveryDay® Credit Card from American Express is a well-rounded card with a rewards program favoring U.S. supermarket purchases, a standout intro offer, and signature Amex additional perks. Terms apply. If you’re looking to transfer a balance and make a large purchase, this card has the best offer on the market allowing you to benefit from 0% intro periods as well as rewards on new purchases.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

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Alexandria White is a writer at MagnifyMoney. You can email Alexandria at alexandria@magnifymoney.com

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Credit Cards, News

New Balance Transfer Offer: The Amex EveryDay® Credit Card from American Express

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities. This site may be compensated through a credit card partnership.

iStock

The beginning of a new year is a common time for credit card issuers to change their current card offers by adding or removing features. So far this year, there have been many changes to cards in the balance transfer market with several main issuers making significant changes  — for better or for worse — including American Express and Citi. While Citi chose to pull back some features of their existing BT offers, American Express debuted a new balance transfer offer with the The Amex EveryDay® Credit Card from American Express.

The key features of the The Amex EveryDay® Credit Card from American Express include*:

  • $0 annual fee
  • Intro 0% for 15 months on balance transfers and purchases; after the promo period ends, the rate changes to a Variable APR of 14.24%-25.24%
  • $0 balance transfer fee for transfers requested within 60 days of account opening.
  • 2x points at U.S. supermarkets, on up to $6,000 per year in purchases (then 1x); 1x points on other purchases

*Terms apply, see rates & fees

The Amex EveryDay® Credit Card from American Express is the first major balance transfer offer from American Express, and this shows their willingness to appeal to a wide range of consumers. While intro 0% cards with $0 intro fee balance transfer fees are common, this new offer is a standout among other balance transfer cards since cardholders can benefit in numerous ways — from transferring a balance without a fee to earning rewards on new purchases to taking advantage of the purchase intro period.

This allows you to use one card for a variety of needs instead of having one card for a balance transfer, another for rewards, and an additional card for a purchase intro period.

What does this offer mean for competitors?

American Express’s new offer may be great for consumers, but other issuers may feel threatened — and they have every reason to be. This offer carries all the desirable features of several cards in one card. Competing balance transfer cards such as Chase Slate® and Citi® Diamond Preferred® Card– 21 Month Balance Transfer Offer may have some of the features offered by The Amex EveryDay® Credit Card from American Express, but they don’t have everything.

Looking at balance transfer cards offered by credit unions, they may offer shorter intro periods (usually around 6 or 12 months) than other BT cards on the market but they often offer consumers lower ongoing APRs than cards from big banks. Therefore, if you’re looking for a card with a low variable APR once the intro period is over, credit union cards may have a slight edge.

Overall, issuing banks and credit unions may have to add additional features to their cards to compete more directly with American Express, and it’ll be interesting to watch their response to this new cards release.

Citi Simplicity® Card - No Late Fees Ever shortens its balance transfer intro period.

In January, Citi reduced the balance transfer intro period for their Citi Simplicity® Card - No Late Fees Ever by three months from intro 0% for 21 months to intro 0% for 18 months (after, 15.24%-25.24% Variable APR). This card had one of the longest offers on the market, but now competes with many other 18-month intro offers. However, Citi® Diamond Preferred® Card– 21 Month Balance Transfer Offer still offers intro 0% for 21 months on balance transfers.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Alexandria White
Alexandria White |

Alexandria White is a writer at MagnifyMoney. You can email Alexandria at alexandria@magnifymoney.com

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Advertiser Disclosure

Earning Cashback

Best Rewards Credit Cards: Double miles, 5% cash, and more – February 2018

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities. This site may be compensated through a credit card partnership.

 

Rewards Credit Cards Illustration

Looking for a rewards credit card to earn cash or travel from the spending you're already doing? There are hundreds of rewards cards out there, and we've combed through our database to hand pick the very best rewards credit cards, most with no annual fee.

If you're just looking for one card to earn cash rewards, your best bet is to use our calculator to get a personalized recommendation based on your spending habits. Otherwise, read on for our top picks. This guide will help you understand whether you are ready to earn rewards, and whether earning cash back or miles for travel rewards is your best bet.

 

New in February 2018: Intro 0% for 15 months and rewards

New Offer!
The Amex EveryDay® Credit Card from American Express
The Amex EveryDay® Credit Card from American Express

APPLY NOW Secured

on American Express’s secure website

Terms Apply

Rates & Fees

Annual Fee

$0

Intro Purchase APR

0% for 15 months

Intro BT APR

0% for 15 months

BT Fee

$0 balance transfer fee.

Regular Purchase APR

14.24% - 25.24% Variable

Rewards

2x points at U.S. supermarkets, on up to $6,000 per year in purchases (then 1x), 1x points on other purchases.

The Amex EveryDay® Credit Card from American Express is a $0 annual fee card that earns Membership Rewards® points at a rate of 2x points at U.S. supermarkets, on up to $6,000 per year in purchases (then 1x) and 1x points on other purchases.

 

With Membership Rewards® Points, you can turn your points into real airline miles with several frequent flier programs, including Delta SkyMiles, JetBlue True Blue, Virgin America Elevate and British Airways Avios. If you fly Delta and use SkyMiles this is a simple way to build on the SkyMiles you already have without a fee (since the Delta branded cards all have a fee). Check here to see if focusing on convertible points that can turn into real airline miles is a good plan for you.

 

Even better, if you don't want to deal with airline miles, you have the flexibility to use your points for travel on almost any airline. Just book your flight via the American Express Travel website and pay for it with points. Other redemption options include gift cards, merchandise, pay with points at checkout and statement credit.

 

This card also comes with an intro 0% for 15 months on purchases that allows you to carry a balance without racking up interest (after the intro period, 14.24% to 25.24% Variable APR). And, you earn Membership Rewards® points on those purchases!

 

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  • Simple Welcome Offer
  • The 2-point bonus on grocery store spending is capped
  • You need 20 transactions each month to get the the 20% bonus

Tip: Make any large purchases or balance transfers as soon as you can so you can benefit from the 0% intro period.

Read our full review of the The Amex EveryDay® Credit Card from American Express here.

 

1. Cash back rewards credit cards

Start here: No annual fee, 2x cash

The most important recommendation we can make is to start with either the Citi® Double Cash Card or Fidelity Rewards Visa Signature in your wallet.

Both earn double cash on everything you purchase and pay off with no limits, and no annual fee.

If you prefer MasterCard or have less than perfect credit, go with the Double Cash. If you prefer Visa or plan to use the card abroad, go with the Fidelity (it has a low 1% foreign transaction fee).

If your credit is fair or you have no credit history, then consider one of these options with a slightly lower cash back rate.

Once you have one of these base cards, you can look at our other favorite cards to earn 3%, or even 5% on some of your other spending. You can scroll down this page to see our top picks, or go to our full directory of dozens of cards that earn 3% or better cash back in many categories.

 

Citi<sup>®</sup> Double Cash Card – 18 month BT offer

Easy double cash rewards

The Citi® Double Cash Card offers easy double cash rewards with no annual fee.

You get 1% cash back when you make a purchase, and another 1% when you pay your bill, so it's easy to earn double cash on everything you buy with the card.

And since there's no annual fee, you don't have to miss out on the seductive 5% cash back you sometimes see on other cards. Just keep the Citi® Double Cash Card in your wallet for most of your spending, and if you have a card that earns 5% in special categories, just use it for that spending, so you can really rack up the cash rewards.

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Transparency Score
  • Earning cash back is simple - there are no special categories or limits
  • There is a fee on foreign transactions, so only use this card for purchases in the U.S.

Tip: You need to earn or use rewards at least once every 12 months, or else your rewards will expire.

APPLY NOW Secured

on Citibank’s secure website

Alliant Cashback Visa<sup>®</sup> Signature Card

2.5% cash back with an annual fee

If you're willing to pay a $59 annual fee, this card offers a big 2.5% unlimited cash back on everything you spend. Alliant is a credit union anyone can join online and you don't need to be a member to apply. There's also a special 3% cash back rate for your first year, with no annual fee either. If you travel abroad there are no foreign transaction fees to worry about. So is the fee worth it? Basically, if you spend more than $1,000 a month on the card, you'll earn more than the annual fee in cash back compared to the Citi® Double Cash Card.

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  • Good disclosure: they tell you what they need to know
  • Simple introductory bonus
  • Impossible to know your interest rate until you apply

Tip: Be aware this card is only for people who are eligible for high credit limits, so it's harder to get than the Citi® Double Cash Card. You'll need excellent credit and a good income to qualify.

APPLY NOW Secured

on Alliant Credit Union’s secure website

Up to 5% rewards with a little effort

Once you have a double cash rewards card in your wallet, you're ready to start considering cards that earn 5% cash back in special categories. If you're really serious about earning the most cash from your spending, you can get all of these rotating category cards and leverage the fact they earn 5% in different categories. Then, use your base double cash rewards card for everything else.

All of these cards have a limit on how much cash back you can earn at 5%, so you'll want to pay attention to that, and some of them require you to enroll each quarter to activate your 5% cash back, so if you miss the deadline you'll earn just 1%.

Chase Freedom<sup>®</sup>

Our pick for small spenders & travelers

With Chase Freedom® you can earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories each quarter. Unlimited 1% cash back on all other purchases.

If you spend the full $1,500 in bonus categories each quarter all year long, you could earn $300 cash back a year from your bonus category spending.

A good introductory bonus for small spenders. Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening. That's like earning 30% cash back on your first $500 in purchases with the card and gets you off to a fast start.

Boost your travel rewards. If you have a Chase Sapphire Preferred® Card for travel rewards, you can combine your points with those from the Chase Freedom®, letting you turn your Chase Freedom® points into real airline miles with Chase Ultimate Rewards® partners like United MileagePlus® and Southwest Rapid Rewards®, which can make your points worth even more.

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  • There's a nice, simple sign on bonus
  • You have to enroll every quarter to earn 5% in bonus categories
  • There are late payment and cash advance fees.

Tip: You generally have about 2 and a half months during the quarter to activate your 5%. For example, for January - March 2018, you can activate by March 14, and still get the 5% in your bonus category spending for the whole quarter, even if you made purchases in the category before you activated.

APPLY NOW Secured

on Chase’s secure website

Discover it<sup>®</sup> - Cashback Match<sup>TM</sup>

Best 5% cash for bigger spenders

The Discover it® and Chase Freedom® are pretty similar when it comes to rewards, but if you spend more than about $1,000 a month, the Discover it® is your better bet if you're looking to choose just one.

Double cash back better for big spenders. As an intro offer for new cardmembers, Discover will match ALL the cash back earned at the end of your first year, automatically.So big spenders get more out of this than the introductory offer on the Chase Freedom®.

Plenty of 5% categories. Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com, or wholesale clubs up to the quarterly maximum each time you activate. All other purchases get 1% cash back.

From January until March 2018, the bonus categories are at Gas Stations & Wholesale Clubs.

If you spend the full $1,500 in bonus categories each quarter all year long, you could earn $300 cash back a year from your bonus category spending.

 

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  • There's a nice, simple sign on bonus
  • You have to enroll every quarter to earn 5% in bonus categories
  • There are late payment and cash advance fees.

Tip: One gotcha about the Discover it® is that you only get the 5% in bonus categories for spending you do after you activate your bonus each quarter. For example, for the January - March 5% categories, if you activate on February 15, only spending from February 15 to the end of March will qualify, even if you made purchases in a 5% category before then.

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on Discover Bank’s secure website

Rates & Fees

Visa® Platinum Cash Rewards credit card from Nusenda

Best 5% with no enrollment hassle

If you want 5% in rotating categories each quarter without having to enroll each quarter, consider the NUSENDA Credit Union's Platinum Cash Rewards card.

Automatic 5% categories. You're automatically eligible for 5% cash rewards each quarter, up to $1,500 worth of spending across the categories each quarter. Currently that's typically a $1,500 per quarter maximum, like the Chase Freedom®. But the categories where you can earn 5% are a bit broader.

For 2018 the 5% cashback bonus categories include:

  • January - March: Groceries and Gas
  • April - June: Restaurants, Movies, and Home Improvement
  • July - September: Gas and Education
  • October - December: Restaurants, Hotels, Airfare

The introductory bonus is the weakest of the bunch, and offers 2% on all your purchases for the first 90 days. You'd have to spend $15,000 in 90 days to beat the Chase Freedom®'s $150 sign on-bonus (Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening).

 

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  • No need to enroll every quarter to earn 5% in bonus categories
  • You need to join a credit union, though anyone can join NUSENDA

Tip: When you apply, you'll be asked where you live or work to determine your eligibility to join NUSENDA Credit Union. If you don't live in one of the New Mexico counties listed on the application, just enter the company you work for, and they'll call you to offer you a non profit organization you can join for a small one time fee to be eligible.

APPLY NOW Secured

on Nusenda ’s secure website

Cash back for frequent diners

What's better than 2% cash rewards? 3%.

While you can get 5% cash back on dining some quarters with the 5% foursome cards above, to get consistently good cash back on dining all the time, read on.

You can also check out our full list of the best cards for dining cash back.

Uber Visa Card

Best unlimited dining cashback rewards

There is no annual fee with this card. The Uber Visa Card offers 4% back on dining purchases, including UberEATS. Then there’s 3% back on hotel and airfare, including vacation home rentals; 2% back for online purchases that run the gamut from Uber and web shopping to video and music streaming services; and 1% on everything else.

This rate is great for people who dine out, whether it’s through a restaurant, a bar, a takeout joint on the corner or UberEATS.

There is a great sign-up bonus: Spend $500 within 90 days from account opening to earn $100 in Uber credits. Also, you can earn up to a $50 credit for online subscription services after you spend $5,000 or more on your card per year.

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  • Good disclosure: they tell you what you need to know
  • Simple introductory bonus
  • Impossible to know your interest rate until you apply

Tip: Use this card for all dining, hotel and airfare purchases to maximize your rewards at the higher percentage rate.

Grocery cash rewards

Groceries are one of the most popular spending categories, and you can check out our full list of the best cards for grocery cash back.

But if you're out to earn the most possible cash back from your grocery shopping, here is our pick:

Blue Cash Preferred® Card from American Express

Best grocery cash back for heavy shoppers

The Blue Cash Preferred® Card from American Express is the card that can earn the most cash from U.S. supermarket purchases, at 6%, but there are two big hoops to deal with.

  1. There’s a cap of $6,000 a year in supermarket spending that earns 6%, so you can get a maximum of $360 a year in rewards at the 6% rate.
  2. There’s a $95 annual fee. So, this is really offering 4.4% cash back on supermarket spending if you spend the full $6,000 a year at U.S. supermarkets and take the annual fee out of your rewards.

So the rule is this: if you spend about $300 – $800 a month at supermarkets, consider this card. Otherwise, get 3% back at supermarkets with no annual fee with the Blue Cash Preferred® Card from American Express or Consumers Credit Union Visa Signature Cash Rebate Card (anyone can join their credit union).

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  • The biggest supermarket cash back rate.
  • There is a $95 annual fee and a cap on the supermarket cash rewards you can earn at 6%.

Tip: If you shop at big box stores like Walmart or Target, those aren't considered supermarkets, even when you're buying groceries, and spending there won't earn the grocery cash back bonus.

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on American Express’s secure website

Terms Apply

Rates & Fees

Cash rewards for less than perfect credit

If you're credit's not perfect, but you're now able to pay your cards in full each month, you won't yet qualify for the very best cash rewards, but you can do well with no annual fee.

Discover it<sup>®</sup> Secured Card - No Annual Fee

Best cash rewards for rebuilding credit

If you have little or no credit history, or are rebuilding credit, the Discover it® Secured Card is the best way to do it while earning rewards.

You can earn 2% cash back at restaurants and gas stations (on up to $1,000 in combined purchases each quarter). Plus, get 1% cash back on all your other purchases. There is no annual fee. A security deposit of $200 or more will establish your credit line (up to the amount that Discover can approve). There are automatic monthly reviews starting at 8 months to see if you can be transitioned to an account with no security deposit.

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TRANSPARENCY SCORE
  • No annual fee.
  • The Regular APR is 24.24% variable.

Tip: You will get your official FICO® credit score for free with this card. Watch it closely, because the goal of a secured card is to graduate to an unsecured card as quickly as possible.

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on Discover Bank’s secure website

Rates & Fees

2. Travel Rewards Cards

Real airline miles

If you're serious about travel, you want points that give you the option to turn them into real airline miles. Yes, there are 'no hassle' cards out there that promise to avoid the rules and traps of airline miles, but you'll often pay more in points if you use those cards, especially if you're flying on expensive international flights.

 

 Chase Sapphire Preferred® Card

Best for serious travel rewards

Chase Sapphire Preferred® Card

The information related to the Chase Sapphire Preferred® Card has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card.

Serious travel rewards are all about being able to earn points you can transfer into real airline miles or hotel points with several travel partners, and the Chase Sapphire Preferred® Card's roster of partners is one of the most useful round. It's why so many travel enthusiasts love this card.

Transfer to real airline miles and hotel points. You can transfer your points into you accounts with United MileagePlus®, Southwest Rapid Rewards, Hyatt Gold Passport, and more anytime you want. Between United and Southwest you're covered for getting around in the U.S. or just about anywhere in the world at attractive point prices. And as you learn more about travel rewards you can take advantage of other partners like Singapore KrisFlyer and Virgin Atlantic Flying Club.

A fallback for when mile seats aren't available. You always have the option to book flights directly via Chase on most airlines without the restrictions of frequent flier programs. Every 10,000 points is worth $125 in flights, hotels, or rental cars booked via the Chase website.

A big introductory bonus. The Chase Sapphire Preferred® Card comes with a big introductory bonus offer that can earn you award travel fast. (Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®).

2x points on dining and travel. You get double points on all dining and travel purchases you make, even cab rides, fast food, and subway tickets.

Check to see if trying to convertible points that can turn into real airline miles makes sense for your habits, but if it does, this is a great card to get started earning big travel value fast.

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  • There are no foreign transaction fees.
  • There is a $95 annual fee, after a $0 introductory fee the first year.

Tip: For a real powerhouse combo, pair this up with a no annual fee Chase Freedom®. The points you earn from the Chase Freedom® can be added to those from your Chase Sapphire Preferred® Card, letting you take advantage of the fact the Freedom earns 5x points in special bonus categories.

And if you really want to turbocharge rewards, but can deal with a higher annual fee, the Chase Sapphire ReserveSM offers 3x points on travel and dining.

Points that work like cash for travel

If you don't want to put in the work to get the extra value real airline miles can offer, but like rewards for travel, consider a card that earns points that work like cash. With these cards you just pay for your flight or hotel with the card, and then use points to get statement credit.

 

Capital One® Venture® Rewards Credit Card

Best for not messing with miles

If you're a big traveler, the action is with real airline miles. But if you don't want to keep track of rules, and still want great rewards for travel, the Capital One® Venture® Rewards Credit Card is one of the biggest earners available.

Pay for travel, get it reimbursed. Instead of using an airline mile program, with the Capital One® Venture® Rewards Credit Card you just pay for travel with your card, then use your Venture® miles to get it reimbursed on your statement. 10,000 miles is worth $100 toward any travel.

2x miles on everything. Everything you buy with the card earns 2x miles, so you can earn up to twice as fast as many airline cards.

A big introductory bonus. The Capital One® Venture® Rewards Credit Card comes with a big introductory bonus offer that can save you hundreds on your next trip.

 

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TRANSPARENCY SCORE
  • There are no foreign transaction fees.
  • There is a $95 annual fee, after a $0 introductory fee the first year.

Tip: You can't mix and match Venture® miles with any regular airline miles you already have. Venture® miles are simply like cash you can use to pay for travel charged to your card.

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Bank of America® Travel Rewards Credit Card

Best for savers with no fee

This card has a pretty basic 1.5x points per dollar on everything you spend, and you can use those points to cover any travel purchase. There is no annual fee and no foreign transaction fee.

$50,000+ in Bank of America accounts = big earning. Where it gets interesting is if you have $50,000 or more in retirement, savings, checking, or other account balances with Bank of America. That qualifies you for the Bank of America Preferred Rewards program which lets you earn 2.25x - 2.6x points per dollar with no limits.

That's because Platinum and Platinum Honors level members of Preferred Rewards get a 50% - 75% bonus on all the points earned with many Bank of America credit cards, including the Travel Rewards card.

You can rollover any of your 401k or IRA accounts to a Merrill Edge account with no maintenance fees, so you don't need a huge checking or savings account balance to get this benefit.

No other card offers so much straight cash for travel earning potential off your spending across any category.

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TRANSPARENCY SCORE
  • There are no foreign transaction fees.
  • You need a big balance in Bank of America accounts to get the most out of the card.

Tip: Bank of America cards have the option to request a PIN that you can use for foreign purchases at places that don't accept a signature.

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on Bank Of America’s secure website

3. Learn more

Are you ready to earn rewards with a credit card?

Rewards credit cards can be great, and earn you hundreds of dollars a year in savings, but they are still credit cards, with all the dangers that come with them.

Answer these questions

If you answer yes to any of these questions, you're not ready for a rewards credit card.

  • Are you unsure if you'll be able to pay your balance in full every single month?
  • Do you plan to do a balance transfer to your card?
  • Do you sometimes make late payments?
  • Do you tend to max out your current credit limit, even if you pay it off?

 

Even if you can safely say 'no' to the questions, be aware that the lure of rewards can cause you to spend more than you otherwise would.

 

Credit card companies make money every time you spend on the card, so they want you to spend more. And the more you spend, the greater the chance you spend more than you can afford, which makes them even more money in interest payments.

Cash back or miles for travel?

We don’t think most people should be messing with travel rewards.

Cash rewards cards are more generous than ever and choosing our favorite cash rewards cards will earn you 2% or better on your spending, which is hard to beat even with travel rewards.

You’ll get rewards you can use anywhere – to pay down bills, give a gift, or whatever you want – all with the same good value.

Travel rewards require extra effort, and they tend to penalize you if you use your rewards for something besides travel.

If you already travel twice a year or more, then travel rewards can sometimes offer you more rewards than straight cash back and you should read on.

We'll cover cash back for travel, real airline miles, and a newer development, convertible points that can turn into real airline miles, but give you more flexibility.

Cash back for travel

Cards with cash rewards let you book travel with any airline or hotel, any time.

You don’t have to think about award rules or restrictions, but you get less value for your points if you try to use them for rewards that don’t involve travel, but you’re usually better off just earning straight cash rewards via a card like the Citi® Double Cash Card.

Best for: People who want to keep it simple (but a regular cash rewards card Is usually better)

Pros

You can use the rewards for any travel. You can pay for travel with your card and use points to get credit back. No worrying about airline award seats or

There are lots of special category bonuses. If you're really into maximizing things, cash rewards have the biggest array of extra points you can earn from special categories like grocery, gas, or dining spending. We keep a full list of them here.

Usually no annual fee. Cash rewards cards mostly have no annual fee to worry about.

Cons

They don't have the biggest intro bonuses. The very biggest introductory offers are typically reserved for cards that earn airline miles or other travel rewards.

Expensive tickets aren't as good a deal. If you spend a lot and can earn a lot of airline miles, you can save a lot on tickets that are expensive in cash, like big international trips or first class tickets.

 

Real airline miles

These are cards that earn miles directly into your account with one airline, like a Delta SkyMiles American Express. They’re usually not the fastest way to earn miles, but they often come with other benefits like a free checked bag.

Our rule of thumb is you should only consider airline miles if you typically spend $2,000 or more in a month on a credit card, so you can earn enough miles for an award in a reasonable amount of time. Otherwise, stick with a cash back rewards card.

But spending $2,000 a month isn't the only factor. You should also be able to answer YES to at least one of these three questions:

  1. Do you have 5,000 or more existing airline miles?
  1. Are you planning to fly in business or first class?
  1. Do you want to go to expensive destinations like Asia, Europe, Africa, South America, or Australia?

If you can answer YES to one of them, then airline miles are a good choice for getting the most out of your card spending.

Pros

They can get you luxurious flights. If you're really flexible with dates and times, a good chunk of real airline miles can get you flights that would otherwise cost thousands of dollars in cash.

You can build on miles you earn from flying.

If you fly more than a few times a year, this can be really lucrative since the miles you earn from your credit card get to build on the ones you already have, getting you to an award ticket a lot faster than spending on a card that just earns regular cash rewards.

They have big intro bonuses

Often, the most generous deals that offer you a bonus to open a new account are on cards that offer travel rewards, rather than regular cash rewards. That's because travel rewards are more restricted, and not appealing to everyone.

Cons

If you don't have a big balance, they can be hard to use. To get the most out of airline miles, you really need to pay attention to things like what airline partners you can use with which miles, where to search for award seats, and how many miles is a 'good' price to pay.

They can expire. Many airline miles expire after a year or so if you leave your account dormant. It's easy to avoid it by earning or spending just one mile, but a lot of people forget and end up losing their miles, so unless you're willing to make them a habit, stay away from regular airline miles.

You need a lot of them to get a good value award. Here's how much you can expect to pay for flights with miles:

  • 25,000 - 50,000 miles: domestic roundtrip ticket in Economy class (typical value: $300 - $1,000)
  • 50,000 - 100,000 miles: domestic roundtrip ticket in First Class (typical value: $500 - $1,500)
  • 60,000 - 100,000 miles: international roundtrip ticket in Economy Class (typical value: $800 - $1,500)
  • 100,000 - 200,000 miles: international roundtrip ticket in Business Class (typical value: $2,500 - $5,000)

That's a lot of miles. And if you're just sticking to one credit card, don't fly much, and

They have annual fees. Most cards that can earn you real airline miles carry a hefty annual fee, which isn't worth it if you don't travel much.

You’re locked into one program. Miles you earn via a traditional airline miles card are stuck in that one program, so if the airline suddenly raises prices or changes rules you’re stuck. Instead, consider convertible points (below) which we prefer over plain airline miles.

 

Convertible points

These are the newest kind of rewards on the block, and cards like the Chase Sapphire Preferred® Card earn points you can convert into real airline miles with certain airlines anytime.

For example, the Chase Sapphire Preferred® Card will let you convert points into miles with United MileagePlus® and Southwest RapidRewards®, so you’re not locked into just one airline program.

Best for: People who want to take advantage of real airline miles, but want extra flexibility

Pros

You get all the advantages of airline miles. With convertible points like Chase Ultimate Rewards® or Amex Membership Rewards®, you can turn your points into real airline miles with several airline programs at any time. The catch is once you turn points into real airline miles, you can't convert them back.

You’re not stuck with one airline. Convertible points cards let you turn points into real airline miles with several participating airlines, so you have even more options than a traditional airline miles card.

You get some of the cash rewards benefits. Points from convertible points cards can be used for a lot of things besides travel, like gift cards, merchandise, and sometimes statement credit, though your points tend to go much further using them for travel.

Cons

Cash rewards aren't as generous. If you don't have a need for airline miles at all, don't go for a convertible points card. Stick to a straight up cash rewards card and your points will stretch further. Convertible points cards tend to be less generous for straight cash rewards because they use the savings there to help fund the cost of being able to convert your points into real airline miles.

There are usually annual fees. You'll generally have to pay an annual fee to get a card that earns convertible points. The The Amex EveryDay® Credit Card from American Express is a notable exception. So again, only use these cards if you can answer "yes" to the 3 questions you should ask before earning airline miles with a credit card.

 

Questions and Answers

With most cash rewards credit cards, your rewards won't expire as long as you keep your account open. But some like the Citi® Double Cash Card require you to either earn or use rewards at least once every so often. For the Citi® Double Cash Card that's once every 12 months.

With cash rewards, you may lose all of your unused rewards if you close your account, so make sure you use them before closing. With travel rewards, miles you hold in an airline program aren't affected if you close your credit card account, but they will be subject to whatever expiration rule the airline has.

No - you can earn rewards, even if you pay off your entire balance each month before it's due.

Most cash rewards cards have no annual fee. But if you have an annual fee card, and don't want to pay the fee, you can sometimes ask your bank to 'downgrade' you to a version with no fee. It might earn fewer rewards, but you can avoid the hassle of closing your account altogether.

Many cards won't give you the rewards from your spending in months where you are late on your payment, so always make your payments on time with a rewards card.

Usually mortgage servicers and other loan providers don't accept credit card payments. Some companies will make payments on your behalf with a credit card, but you'll be charged a fee, and often that fee is more than the rewards are worth.

Most cards don't offer rewards for 'cash equivalent' transactions like using a cash advance. Some will offer you rewards for completing a balance transfer, but you're likely to get hit with fees or a less favorable deal than if you use a good card designed for balance transfers..

If you have cash rewards, just send the cash to whomever you want. If you have travel rewards, many cards will let you combine your points with your spouse or domestic partner. Otherwise, you can just book tickets for someone else using your points if you want to make a gift. Airline miles usually can't be shared with other people unless you want to pay a fee.

You shouldn't be carrying a balance month to month on rewards cards, because the interest rates on them is sometimes higher than on cards with no rewards. But if you do end up carrying a balance over from one month to another, your rewards won't disappear as long a you make your payment on time.

5% cards are designed to catch people who aren't paying attention. So if your card has an enrollment requirement to earn 5% each quarter, and you miss it, you'll be out of luck for earning 5%.

Yes, many cash rewards cards offer rewards in the form of statement credit, and that reduces the balance you need to pay on your account.

Some cards require you keep your account open for a certain number of months, or else you will lose any sign on bonus you earned. It's usually best to keep a card open for about a year or more.

Usually authorized users earn rewards in the same account as the primary user.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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Best of, Credit Cards

Credit Cards: Find the Best Credit Card Offers & Deals – February 2018

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities. This site may be compensated through a credit card partnership.

Credit Cards: Find the Best Credit Card Offers & Deals

Updated February 15, 2018

The best credit cards can help you earn $2 or more for every $100 you spend - an easy way to make $100s or even $1,000s a year. When done properly, low rate credit cards are also the cheapest way to borrow. You can get 0% interest for up to 2 years. And credit cards are the best way to build, rebuild or maintain an excellent credit score, without paying fees.

But if you get it wrong, you can easily end up buried under a pile of expensive debt. This is a step-by-step guide that will help you find the best credit cards while avoiding expensive traps.

 

Top Credit Card for 2018

New Offer!
The Amex EveryDay® Credit Card from American Express
The Amex EveryDay® Credit Card from American Express

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on American Express’s secure website

Terms Apply

Rates & Fees

Annual Fee

$0

Intro Purchase APR

0% for 15 months

Intro BT APR

0% for 15 months

BT Fee

$0 balance transfer fee.

Regular Purchase APR

14.24% – 25.24% Variable

Rewards

2x points at U.S. supermarkets, on up to $6,000 per year in purchases (then 1x), 1x points on other purchases.

New for February 2018, The Amex EveryDay® Credit Card from American Express ranks as our top credit card for 2018. This card offers a combination of benefits that are unmatched among other cards in the market, including 0% intro periods, rewards, and great cardholder perks — all at a $0 annual fee. Terms apply.

Cardholders can utilize the intro periods for both balance transfers and purchases by taking over a year to pay off debt without accruing interest. The balance transfer offer has a $0 balance transfer fee for for transfers requested within 60 days of account opening, which saves you the typical 3% transfer fee most other cards charge.

Beyond the intro periods, there is a rewards program where cardholders can earn 2x points at U.S. supermarkets, on up to $6,000 per year in purchases (then 1x), and 1x points on other purchases. This rate is beneficial for people who spend $500 a month at U.S. supermarkets, since this spending allows you to maximize rewards at the higher rate.

The Membership Rewards® points you earn can be redeemed for a variety of options, and a great option for travelers is the ability to transfer points to participating frequent flyer programs including Delta SkyMiles, JetBlue True Blue, Virgin America Elevate, and British Airways Avios. Often these transfers are on a 1:1 rate, with some programs requiring more or less points. Additional redemption options include booking for travel, gift cards, merchandise, pay with points at checkout and statement credit. This card also has a wide range of additional perks that vary from shopping and entertainment benefits to travel and purchase protections.

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  • Simple Welcome Offer
  • The 2-point bonus on grocery store spending is capped
  • You need 20 transactions each month to get the the 20% bonus

Tip: Make any large purchases or balance transfers as soon as you can so you can benefit from the 0% intro period.

Read our full review of the The Amex EveryDay® Credit Card from American Express here.

How to Choose and Use a Rewards Card

It is now easy to earn great rewards when you use a credit card for your spending. You should earn at least 2% cash back, and can earn even more with a bit of work. The money can add up quickly. If you spend $1,000 a month, you can earn $240 a year. It is not very often you can get something for nothing. But if you make the right choice and follow the rules, you can earn significant rewards.

How to Choose

Best Cash Back Credit Cards

Cash back credit cards are a great way for you to earn money back from everyday purchases. There are two types of cash back credit cards — flat-rate and category. Flat-rate cards offer the same cash back rate for all purchases, while category cards offer higher rates for certain purchases like gas, grocery, travel, and dining. Below we break down the best cash back credit cards.

Best Flat-Rate

These are the top cards offering a flat cash back rate.

Citi<sup>®</sup> Double Cash Card – 18 month BT offer

1% When You Buy + 1% When You Pay

Citi® Double Cash Card – 18 month BT offer

The Citi® Double Cash Card – 18 month BT offer is the best overall cash back credit card. So long as you pay your statement balance in full and on time every month, you will earn 2% cash back. You earn 1% unlimited cash back on all of your purchases. You then earn an additional 1% on payments based on your purchases. The bonus cash back can take up to two billing cycles to post.

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  • No caps on how much cash back you can earn.
  • Cash back earning formula is easy to understand
  • There is a range of interest rates. You won’t know yours until after you apply

Key Information

Credit Score Required : Good or Excellent Credit

Purchase Interest Rate : 14.49% - 24.49% Variable

Annual Fee : $0

Sign-on Bonus : None

Intro Purchase APR : None

Intro Balance Transfer : 0% for 18 months

BT Fee : 3% or $5, whichever is greater

Tip: Make sure you pay your statement balance in full and on time to maximize your cash back.

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on Citibank’s secure website

FULL REVIEW 

Fidelity<sup>®</sup> Rewards Visa Signature<sup>®</sup> Card

Unlimited 2% Cash Back on Every Purchase

Fidelity® Rewards Visa Signature® Credit Card

The Fidelity® Rewards Visa Signature® Credit Card offers Fidelity customers a generous 2% cash back on all purchases, with no limits or category restrictions. The cash back you earn must be deposited into a Fidelity account, but you don't need to have a Fidelity account to apply for the card. If you do not have a Fidelity account, they will open a Fidelity Cash Management Account to deposit your cash back. It works like a checking account with no minimum balance requirement and no monthly fees.

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  • Simple cash back earning formula
  • No caps on how much cash back you can earn
  • You need to have a Fidelity account in order to redeem your cash back

Key Information

Credit Score Required : Excellent Credit

Purchase Interest Rate : 14.99% Variable

Annual Fee : $0

Sign-on Bonus : None

Intro Purchase APR : None

Intro Balance Transfer : None

BT Fee : 3% or $5, whichever is greater

Tip: You don't need to keep your retirement or stock accounts with Fidelity to qualify for this card. Anyone can apply.

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on Fidelity’s secure website

FULL REVIEW 

Best Category Bonuses

Here are the top cash back cards that pay much higher rates in certain bonus categories, which can be a great way to boost your returns.

Fort Knox Federal Credit Union Visa<sup>®</sup> Platinum Card

Unlimited 5% Cash Back on Gas

Fort Knox Credit Union Visa® Platinum Card

If you spend a lot of money on gas, there is no better card than this. You can earn unlimited 5% cash back on spending at gas stations. You will earn 1% on all other spend. You must be a member of the credit union, but anyone can join. Pay $5 to join the American Consumer Council of Kentucky (you can do that here) and you will be eligible to join.

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  • No limit to the cash back you can earn, even in the bonus category
  • You have to be a member of the credit union to get the card

Key Information

Credit Score Required : Good or Excellent

Purchase Interest Rate : as low as 10.25%

Annual Fee : $0

Sign-on Bonus : None

Intro Purchase APR : None

Intro Balance Transfer : None

BT Fee : None

Tip: If you are not yet a member, you can use the non-member application process. Once approved, you can join with your $5 contribution to American Consumer Council.

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on Fort Knox Federal’s secure website

MORE GAS CASH BACK CARDS 

Blue Cash Preferred® Card from American Express

6% Cash Back at U.S. Supermarkets (Up to $6,000 of Spend)

Blue Cash Preferred® Card from American Express

The unparalleled 6% cash back rate at U.S. Supermarkets makes this one of the best cards on the market for heavy grocery shoppers. Even with the $95 annual fee, most grocery shoppers will come out ahead. You will also earn 3% cash back at U.S. gas stations, 3% at select U.S. department stores and 1% on all other purchases. You'll earn the sign up bonus of a $200 statement credit after you spend $1,000 in purchases within the first 3 months of account opening.

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  • Simple, easy to understand Welcome Offer
  • There is an Annual fee

Key Information

Credit Score Required : Good or Excellent

Purchase Interest Rate : 14.24% - 25.24% Variable

Annual Fee : $95

Welcome Offer : $200 statement credit after you spend $1000 in purchases within the first 3 months of account opening.

Intro Purchase APR : 0% for 12 months

Intro Balance Transfer : 0% for 12 months

BT Fee : 3% or $5, whichever is greater

Tip: If you spend less than $200 a month on groceries, you will earn less than 2% cash back (after taking into account the fee) and would be better with Citi Double Cash or Fidelity American Express. But, if you spend more each year, this is a great option.

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on American Express’s secure website

Terms Apply

Rates & Fees

MORE GROCERY CASH BACK CARDS 

PenFed Premium Travel Rewards American Express® Card

4.25% Cash Back on Airfare Expenses

PenFed Premium Travel Rewards American Express® Card

If you buy a lot of plane tickets every year, this card can be particularly lucrative. You will earn 5 points for every $1 spent on air travel. When you convert those points to a prepaid Visa card, those 5 points turn into a 4.25% earn rate. You earn 1 point per $1 on all other purchases. There is no annual fee, no foreign transaction fees and 20,000 bonus points when you spend $2,500 within three months of account opening.

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  • No annual fee and no foreign transaction fees
  • The conversion from points to $ can be confusing
  • You must be a member of the credit union

Key Information

Credit Score Required : Good or Excellent

Purchase Interest Rate : 9.74% - 17.99% Variable

Annual Fee : $0

Sign-on Bonus : 20,000 bonus points when you spend $2,500 within 3 months of opening an account.

Intro Purchase APR : None

Intro Balance Transfer : 0% for 12 months

BT Fee : 3%None

Tip: Keep an eye open on the redemption opportunities. You can sometimes find better deals than just prepaid Visa® cards.

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on PenFed Credit Union’s secure website

MORE CARDS FOR TRAVEL SPENDING 

Uber Visa Card

4% for Dining Out

Uber Visa Card

This card appears to have millennials’ interests at heart, offering higher rewards rates for eating out and credits toward streaming subscriptions. The Uber Visa Card offers 4% back on dining purchases, from restaurant and bar purchases to takeout and UberEATS. Also offered: 3% back on hotel and airfare including vacation home rentals; 2% back for online purchases covering everything from Uber and online shopping to video and music streaming; and 1% on everything else.

As mentioned, dining purchases are defined as spending at restaurants, bars, on takeout or via the UberEATS service. Points can be redeemed for Uber credits, gift cards or cash back.

Another perk: There is no annual fee with this card. And there’s a terrific sign-up bonus that requires you to spend $500 within 90 days from account opening to earn $100. Also, you can earn up to a $50 credit for online subscription services after you spend $5,000 or more on your card per year.

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  • Good disclosure: they tell you what you need to know
  • Simple introductory bonus
  • Impossible to know your interest rate until you apply

Key Information

Purchase interest rate : 16.24% - 24.99% Variable

Annual fee : $0

Sign-on bonus : Earn $100 after spending $500 on purchases in the first 90 days.

Intro purchase APR : None

Intro balance transfer : None

BT fee : $10 or 3%, whichever is greater

Tip: Use this card for all dining, hotel and airfare purchases to maximize your rewards at the higher rate.

FULL REVIEW 

Do you spend a lot of money in other categories? You can find the best cash back credit cards for every category here.

Best Travel Credit Cards

If you would like to earn free travel, there are a number of credit cards designed specifically to help you earn free flights quickly. Here are the best travel rewards credit cards.

Best Credit Cards for U.S. Travel

Bank of America® Travel Rewards Credit Card

Best No Annual Fee Travel Card - Miles Can Be Used Anywhere

Bank of America® Travel Rewards Credit Card

With this card, you earn unlimited 1.5 points for every $1 you spend. There are no restrictions and no blackout dates. Every 100 points can be redeemed for $1 worth of travel. The rewards get even better if you have “Preferred Rewards” at Bank of America®. If you're a Preferred Rewards client, you could increase your points earned with a bonus of 25% - 75%.

There is no annual fee and no foreign transaction fees. You can use your points for a wide range of travel options, including flights, hotels, vacation packages, cruises, rental cars and even pesky baggage fees.

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  • Simple introductory bonus
  • No limit to the points you can earn
  • There is a range of interest rates. You won’t know yours until after you apply

Key Information

Credit Score Required : Good or Excellent

Purchase Interest Rate : 16.24% - 24.24% Variable

Annual Fee : $0

Sign-on Bonus : 20,000 bonus points after making at least $1,000 in purchases in the first 90 days.

Intro Purchase APR : 0% for 12 billing cycles

Intro Balance Transfer Offer : None

BT Fee : 3% or $10, whichever is greater

Tip: The Preferred Rewards program offers excellent rewards. If you rollover your old 401(k) or IRA to Merrill Edge®, you can get up to a 75% credit card bonus and ATM fee reimbursement with a Bank of America® checking account.

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on Bank Of America’s secure website

Best Credit Cards for International Travel

These are the best credit cards for use when traveling outside of the country. None of these cards have foreign transaction fees. And some of them even have chip and pin, helping to increase acceptance.

Platinum Rewards MasterCard® from First Tech FCU

No Annual or Foreign Transaction Fee + Chip and Pin Functionality

First Tech Credit Union Platinum Rewards MasterCard®

This card is a great companion for overseas travel with no annual fee or foreign transaction fee. Even better, the card offers chip and pin functionality. Most major credit card issuers in America have rolled out chip and signature, which can be problematic overseas. If you try to use your card at a ticket machine or with a waiter’s portable payment device, you have a good chance of being rejected.

It's easy to join the credit union —membership is free if you work for a sponsor technology company, work for the state of Oregon or live in Lane County, Oregon. Otherwise, you just need to join the Financial Fitness Association with a one-time fee of $8. There is a sub-par rewards program: 1 point for every $1 you spend.

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  • No annual fee or foreign transaction fees
  • You have to be a member of the credit union

Key Information

Credit Score Required : Good or Excellent

Purchase Interest Rate : as low as 10.99% Variable

Annual Fee : $0

Sign-on Bonus : $200 bonus cash back after you spend $500 on purchases in the first 3 months from account opening.

Intro Purchase APR : None

Intro Balance Transfer APR : 0% for 12 months

BT Fee : None

Tip: Use this card for foreign travel, not for rewards since you earn a very low rate.

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on First Technology Federal Credit Union’s secure website

Capital One® QuicksilverOne® Cash Rewards Credit Card

Best Foreign Travel for Fair Credit

Capital One® QuicksilverOne® Cash Rewards Credit Card

This card is designed for people with average credit. If you have defaulted on a loan in the past five years (but not more than once), or if you have had limited credit history (at least one account for less than three years), you would be considered “average.” With this card, you can earn 1.5% unlimited cash back. There is also no foreign transaction fee, but be aware of the $39 annual fee.

You can use this card to build your credit score by keeping your utilization low (ideally below 20%) and make your payments on time and in full every month. Capital One® provides free access to your FICO score so you can track your score and see when you are eligible for an upgrade to a no-fee card.

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Transparency Score
  • No limit to the cash back you can earn
  • No confusing categories or limits
  • No annual fee or foreign transaction fee

Key Information

Credit Score Required : Average

Purchase Interest Rate : 24.99% (Variable)

Annual Fee : $39

Sign-on Bonus : None

Intro Purchase APR : None

Intro Balance Transfer Offer : None

BT Fee : None

Tip: Use this credit card to build your score and avoid expensive foreign transaction fees.

 

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on Capital One’s secure website

FULL REVIEW 

How to Use

In order to maximize your cash back, make sure you follow these suggestions:

  • Use your chosen cash back card for ALL of your spending. Your goal should be to replace cash, checks, automatic debits and debit cards completely. For example, you can automate bill payments (like your cell phone) to be debited from your credit card. This will make your life easier (only one payment to make each month) and it will make budgeting easier (you can set a target for spending and track it easily).
  • Set up automatic monthly payments for the statement balance, not the minimum due. If you set up automatic payments, you will ensure that your payment will be on time every month. And if you set up the automatic payment for the statement balance, you will ensure that you are never charged interest and only charge what you can afford to repay.
  • Avoid cash advances. If you use your credit card to take out cash, most companies will charge a cash advance fee that averages 3%. The interest rate on cash advances is usually above 20%. And there is no grace period, which means interest starts accruing right away.

Best Luxury Card

The Platinum Card® from American Express

Airline perks, entertainment benefits, rewards and more

The Platinum Card® from American Express

The The Platinum Card® from American Express is the best overall luxury card on the market, offering numerous benefits for cardholders. To name a few perks, you can receive: up to $200 in annual savings on Uber rides, Preferred Seating for select entertainment events, access to the American Express Global Lounge Collection? with over 1,000 airport lounges across 120 countries, a $200 Airline Fee Credit per calendar year in baggage fees and more at one qualifying airline, and numerous other benefits.

There is a rewards program great for frequent travelers — you get five Membership Rewards® points per dollar spent on flights booked directly with airlines or with American Express Travel and five Membership Rewards® points per dollar spent on eligible hotels booked on amextravel.com.

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Transparency Score
  • Good disclosure: they tell you what you need to know
  • Simple introductory bonus
  • High annual fee

Key Information

Credit Score Required : Excellent / good credit

Annual Fee : $550

Sign-on Bonus : Earn $6,000 Membership Rewards® Points after you use your new card to make $5000 in purchases in your first 3 months

Tip: To earn the most Membership Rewards® points, be sure to purchase flights directly with airlines or with American Express Travel and book hotel stays directly on amextravel.com.

 

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on American Express’s secure website

Terms Apply

Rates & Fees

Best Low Rate Cards

If you're someone who carries a balance month-to-month, a low rate credit card can be a great way for you to save money. Whether you want to complete a balance transfer, finance a large purchase, of simply have a low rate card in your wallet, there is a card for you. See below for our top picks.

How to Choose and Use a Low Rate Credit Card

When done properly, credit cards can be the cheapest way to borrow. Just make sure you choose the right credit card for your situation and automate a plan to pay off the debt as quickly as possible.

How to Choose

Best Balance Transfer Credit Cards

With a balance transfer credit card, you can transfer debt from a high interest rate credit card to a 0% introductory promotional rate. You can find no fee balance transfers for up to 15 months. If you are willing to pay a fee, you can find balance transfers for 18 or 21 months. The fee is usually worthwhile - if you want to do the calculation, you can use the calculator on our interactive tool.

Remember: You cannot transfer debt between two credit cards of the same bank.

Here are the best 0% balance transfer offers in the market today. All of these credit cards waive interest - which means there is no retroactive interest charge to worry about.

Chase Slate<sup>®</sup>

No Fee - introductory 0% on transfers for 15 months

Chase Slate®

With the Chase Slate® credit card you can enjoy an introductory balance transfer offer for 15 months and pay no balance transfer fee when you transfer a balance during the first 60 days your account is open. The intro $0 transfer fee is a great way to save money when completing your transfer. In addition to the balance transfer offer, you pay no interest on purchases for 15 months — great for those who want to pay off a large purchase over time without accruing interest.

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  • Interest is not deferred during the balance transfer period, which means if you do not pay off your balance by the end of the promo period, you will not be charged the interest that would have accrued during the deferral period.
  • Interest rate is not known until you apply.

Key Information

Credit Score Required : Good or Excellent

Purchase Interest Rate : 16.24% - 24.99% Variable

Annual Fee : $0

Sign-on Bonus : None

Intro Purchase APR : 0% for 15 months

Intro Balance Transfer Offer : 0% for 15 months

BT Fee : $0 Introductory balance transfer fee for transfers made during the first 60 days of account opening After, 5% of the amount transferred, with a minimum of $5, whichever is greater.

Tip: Compete your transfer within 60 days from account opening to take advantage of the intro $0 transfer fee.

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on Chase’s secure website

FULL REVIEW 

Citi Simplicity<sup>®</sup> Card - No Late Fees Ever

0% intro APR on transfers and purchases for 18 months; 3% balance transfer fee

Citi Simplicity® Card - No Late Fees Ever

Citibank has a strong intro balance transfer offer, with a long 18 months. In addition, the Citi Simplicity® Card - No Late Fees Ever has some added perks. There are no late fees, no penalty rate and no annual fee. Although you should always try to pay on time, it is nice that this card will not punish you for the occasional mistake. In addition to the balance transfer offer, you pay no interest on purchases for 18 months.

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Transparency Score
  • No late fee, no penalty APR and no annual fee
  • Interest is not deferred during the balance transfer period, which means if you do not pay off your balance by the end of the promo period, you will not be charged the interest that would have accrued during the deferral period.
  • There is a range of interest rates. You won’t know yours until you apply.

Key Information

Credit Score Required : Good or Excellent

Purchase Interest Rate : 15.24% - 25.24% Variable

Annual Fee : $0

Sign-on Bonus : None

Intro Purchase APR : 0% for 18 months

Intro Balance Transfer Offer : 0% for 18 months

BT Fee : 3% or $5, whichever is greater

Tip: Make sure you transfer your balance within 4 months of opening the card, otherwise you lose the promotional offer.

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on Citibank’s secure website

FULL REVIEW 

Paying off credit card debt sometimes requires more than one balance transfer credit card. If you want even more choices, check out our full guide to the best balance transfer cards, or use our balance transfer calculator to see which cards will save you most.

Best 0% Purchase Credit Cards

With a 0% introductory purchase offer, you will not be charged interest for purchases made on the credit card during the promotional period. This is a great way to finance a purchase. Even better, none of these top cards charge retroactive interest if you don’t pay off the balance during the promotional period. (A lot of store credit cards offer 0%, but then hit you with a big penalty. But don’t worry - these recommendations don’t do that).

Citi<sup>®</sup> Diamond Preferred<sup>®</sup> Card– 21 Month Balance Transfer Offer

0% intro on Purchases for 21 Months

Citi® Diamond Preferred® Card– 21 Month Balance Transfer Offer

If you are looking to finance a purchase, Citibank offers the longest 0% intro purchase promotion of any credit card in the MagnifyMoney database. The intro APR on purchases will be 0% for the first 21 months after opening the credit card. This is a fantastic length of time for you to pay off your balance. Additionally, the Citi® Diamond Preferred® Card– 21 Month Balance Transfer Offer has a 0% intro APR on balance transfers for 21 months. There is also no annual fee and the ability to choose your payment due date from any available due date in the beginning, middle or end of the month.

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Transparency Score
  • Interest is not deferred during the balance transfer period, which means if you do not pay off your balance by the end of the promo period, you will not be charged the interest that would have accrued during the deferral period.
  • Interest rate is not known until you apply.

Key Information

Credit Score Required : Good or Excellent

Purchase Interest Rate : 14.24% - 24.24%

Annual Fee : $0

Sign-on Bonus : None

Intro Purchase APR : 0% for 21 months

Intro Balance Transfer Offer : 0% for 21 months

BT Fee : 3% or $5, whichever is greater

Tip: The 21 months starts from when you open the credit card, not when you make the purchase. So make sure you time your application with your planned purchase.

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on Citibank’s secure website

FULL REVIEW 

TruWest Visa® Signature Card

0% Intro on Purchases for 18 Months - Credit Union Membership Required

TruWest Visa® Signature

TruWest is a credit union with restricted membership. Unfortunately, you need to live in certain regions of Texas or Arizona, or work for a few select employers to join. You can learn about membership eligibility here. If you are able to join, you will find a long 18-month 0% intro APR period. Even better, the credit card has reasonable credit union interest rates after the promotional period ends. There is no annual fee on the card.

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  • Interest is not deferred during the balance transfer period, which means if you do not pay off your balance by the end of the promo period, you will not be charged the interest that would have accrued during the deferral period.
  • There is a range of interest rates. You won’t know yours until you apply.

Key Information

Credit Score Required : Good or Excellent

Purchase Interest Rate : 8.90% - 9.90%

Annual Fee : $0

Sign-on Bonus : Earn $100 when you spend $100 in the first 90 days of account opening.

Intro Purchase APR : 0% for 18 months

Intro Balance Transfer Offer : 0% for 18 months

BT Fee : 3%

Tip: Make sure you check your membership eligibility before you apply.

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on TruWest Credit Union’s secure website

Best Low Interest Credit Cards

Having a credit card with a rate that stays low is a good idea. In case of an emergency, you will always have access to a low cost way to borrow. Here are some great low interest rate options:

Langley Select Visa Platinum Card from Langley FCU

As Low as 8.00% APR from a Credit Union Anyone Can Join

Langley Select Visa® Platinum

Anyone can join Langley Federal Credit Union by joining an association during the signup process for $5. If you have excellent credit and just want a place for emergency spending with no rewards, consider keeping this card on hand. Although the rates start as low as 8.00% Variable, not everyone will get a rate that low. It’s more of a hassle than a regular bank card, but if you insist on the very lowest rate you may get it with this card.

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Transparency Score
  • Interest is not deferred during the balance transfer period, which means if you do not pay off your balance by the end of the promo period, you will not be charged the interest that would have accrued during the deferral period.
  • There is a range of interest rates. You won’t know yours until you apply.
  • You have to join the credit union.

Key Information

Credit Score Required : Excellent

Purchase Interest Rate : as low as 8.00% Variable

Annual Fee : $0

Sign-on Bonus : None

Intro Purchase APR : None

Intro Balance Transfer Offer : None

BT Fee : None

Tip: You need to have an excellent credit score in order to qualify for the lowest interest rate.

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on Langley Federal Credit Union’s secure website

You might get a lower rate from a credit union or bank near you that doesn’t accept nationwide applications, and you can check our full list of low interest credit cards to see if there is one that works for you.

How to Use

If you need to borrow money, credit cards can be an incredibly low cost way of borrowing. Just make sure you pay attention to the following tips:

  • Get that balance transfer done quickly! If you are transferring a balance, make sure you complete the transfer as soon as possible. The introductory offer starts from when you open the card, not when the transfer is completed. And you can lose the offer with most issuers if you wait more than 60 days to complete the transfer.
  • Automate your monthly payments. If you pay late, you can be charged a costly late fee. And, if your payment is 60 days late, you can lose the introductory offer entirely.
  • You cannot transfer debt between two cards of the same bank. For example, if you open a Citibank account you will only be able to transfer debt from credit cards other than Citibank.

Best Cards to Help Build or Rebuild Your Credit Score

If you're someone who is new to credit or has poor credit history, there are credit cards designed for you. These cards are a great way to begin your credit journey, or to improve your credit score. See below for our top picks.

How to Choose and Use a Credit Card to Build or Rebuild Your Score

If you are looking to build or rebuild your credit score, a credit card can be the perfect tool.

How to Choose

If you have no credit, or your credit score is below 620, you should consider a secured credit card.

If you have limited credit history (less than three years) or you have only defaulted once on a credit card or loan (not multiple times), you should consider a credit card for fair credit.

Best Secured Credit Cards if You Have Bad or No Credit

Secured credit cards are the best option if you need to build or rebuild your credit score. The best secured credit cards have no annual fees. If you’re going to use a secured credit card, it will help you grow your score if you pay your balance on time every month, keep your credit utilization low, and you apply for an unsecured credit card after 12-18 months of regular use.

Need to know more? These are ways that you can build your credit without paying interest and spending just $10 a month, and these are tips for improving your credit score.

Discover it<sup>®</sup> Secured Card - No Annual Fee

No Annual Fee Secured Card with Free FICO Score; $200 Deposit Required

Discover it® Secured Card – No Annual Fee

This is our favorite secured credit card. There is no annual fee and you will get free access to your credit score. In order to open the card, you will need to deposit at least $200, depending upon your creditworthiness. If you have previously filed bankruptcy, you still have the chance to be approved. With this secured credit card, you will earn 2% cash back at restaurants or gas stations (on up to $1,000 in combined purchases each quarter) and 1% cash back on all other purchases.

Our favorite part of this card is the automatic monthly reviews starting at 8 months to see if you can be transitioned to an unsecured card. If you qualify, you will be graduated (and get your deposit back).

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Transparency Score
  • No annual fee
  • Free FICO credit score

Key Information

Credit Score Required : No credit, 670 or less

Purchase Interest Rate : 24.24% variable APR

Annual Fee : $0

Sign-on Bonus : Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically (new cardmembers only).

Intro Purchase APR : None

Intro Balance Transfer Offer : 10.99% for 6 months from date of first transfer.

BT Fee : 3%

Tip: This product reports to all three credit bureaus. It is a great tool to build your score. But, if you miss payments, you can do damage to your score.

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on Discover Bank’s secure website

Rates & Fees

FULL REVIEW 

Rate Advantage Secured Visa by Coastal FCU

No Fee Secured Card; Credit Union Membership and $100 Deposit Required

Rate Advantage Secured Visa

This card has no annual fee, and you only need to deposit $100 in a Collateral Savings Account to get started. If you’re not a member of Coastal Credit Union, you can join an organization for $18, which is deducted from your initial deposit, and become a member. So you’ll need $118 to get started. While the initial deposit is lower than the Discover it® Secured Card – No Annual Fee, you lose out on the rewards. This card takes more work to open, since it involves joining a credit union, but anyone can apply.

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Transparency Score
  • A single interest rate that you know up front, before you apply
  • You have to join a credit union

Key Information

Credit Score Required : Anyone can apply

Purchase Interest Rate : as low as 16.25% Variable

Annual Fee : $0

Sign-on Bonus : None

Intro Purchase APR : None

Intro Balance Transfer Offer : None

BT Fee : 3% or $5, whichever is greater

Tip: It is easy to join the credit union. Join an organization for $18 and you will become eligible.

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on Coastal Federal Credit Union’s secure website

We also have a list of several other no annual fee secured credit cards from both banks and credit unions anyone can join. Or browse our list of hundreds of secured cards to compare rates, fees, and deposit requirements.

Best Credit Cards if You Have Fair Credit

If you have fair or average credit, you might be able to qualify for an unsecured credit card. If you have more than one default in the last five years, you will find it difficult to get approved. In addition, if you are currently delinquent on any of your accounts it will also be hard to get approved, and you should try a secured card instead.

Here are some good cards for people with fair credit:

Capital One® QuicksilverOne® Cash Rewards Credit Card

1.5% Cash Back for People with Average Credit - with $39 Annual Fee

Capital One® QuicksilverOne® Cash Rewards Credit Card

Capital One® has created a credit card specifically for people with average credit. If you have defaulted on a loan (but not more than one) in the last five years, or you have limited credit history (at least one account for less than three years), you would meet the definition of average credit. With this card, you will earn unlimited 1.5% cash back on every purchase with no limit on how much you can earn, and no changing categories.

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Transparency Score
  • Interest is not deferred during the balance transfer period, which means if you do not pay off your balance by the end of the promo period, you will not be charged the interest that would have accrued during the deferral period.
  • There is an annual fee

Key Information

Credit Score Required : Average

Purchase Interest Rate : 24.99% Variable

Annual Fee : $39

Sign-on Bonus : None

Intro Purchase APR : None

Intro Balance Transfer Offer : None

BT Fee : None

Tip: Watch your credit score closely. As you pay down your debt, your score will improve. Once your score is above 700, you can find a lot of choices for credit cards with better rewards or no annual fee.

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on Capital One’s secure website

FULL REVIEW 

You may also want to try and see if you are pre-qualified for a credit card before applying. Banks can perform a ‘soft’ pull on your credit file to give you a sense of whether you might qualify for one of their products. It leaves no mark on your credit score, and you can see a full list of ways to check if you’re pre-qualified here.

How to Use It

In order to build your credit score with one of these cards, you should follow our tips. By doing this, you should see real improvement in your score.

  • Don’t use more than 10% - 20% of your available credit. For example, if you have a $500 credit limit, never spend more than $50. That keeps your utilization low.
  • Use your card every single month. You should make sure you have a transaction every month, so that positive data is reported to the credit bureaus.
  • Automate and pay your statement balance in full and on time every month. Even just one late payment could crush your score. And by paying the balance in full, you will avoid any interest expense.
  • Watch your score closely. Keep an eye on your credit score. After 12 months, you should really start to see a big improvement. Once your score is above 650, you should try to get your secured card converted or apply for an unsecured credit card.

A Special Note: Beware Predatory Companies

Many lenders target consumers with FICO credit scores of less than 650. If you have searched for “credit cards for bad credit,” you will probably find offers from companies like First Premier. In addition to high interest rates, these lenders often require application processing fees, maintenance fees and more. You could be given a $300 credit limit and see a big portion of it eaten up with fees.

Stay away from these specialist subprime lenders. Instead, consider the following:

  • If you need to borrow, consider a personal loan instead. You can find much better deals. Search for options here.
  • If you want to build your credit score, use a secured credit card instead.

Other Benefits of Using a Credit Card

Not only can you use a credit card to earn rewards, borrow at low rates or build your credit score for free - but there are many other benefits available. Here are some of the benefits that you can find:

Available on Most Credit Cards

  • $0 Liability on Fraudulent Activity: Credit cards are the best way to protect yourself from fraud. So long as you report the fraud to your credit card company, you will not be liable for any losses on any major credit card.
  • Car Rental Collision Insurance: If you waive collision coverage when renting a car, your credit card may provide secondary coverage of $50K or more.

Available on Some Credit Cards

  • Retail Purchase Protection: Protects you from loss, theft, fire or accidental damage for a limited period of time after your purchase has been made. Not all cards protect you from loss, so look it up in the Purchase Protection Coverage Description Document.
  • Price Protection: If you buy something in stores and you see an advertised price, you will receive the difference between the two prices.
  • Extended Warranties: Duplicates both manufacturers and store warranties for a limited length of time and for limited dollar values (varies by card).
  • Travel Accident Coverage: If you are injured during travel, and you purchased the tickets via credit card, your company fully insures you.
  • Lost Luggage Coverage: You can receive compensation for lost, stolen or damaged luggage if you purchased flight or travel tickets using your credit card.
  • Trip Interruption Cancellation Coverage: If travel delays keep you from completing a trip, and you purchased the tickets on your credit card, the full value of the tickets will be refunded
  • Concierge Services: Certain cards offer free access to local concierge services that can help you make dinner reservations, purchase event tickets, and locate items while you are abroad.

Should You Get a Credit Card?

Credit cards are like knives. Used well, they are great (even essential) tools. But if you start playing with them, you can get into trouble quickly.

There are two big risks associated with swiping plastic:

  • You spend more than you should, because it is just too easy
  • You pay higher interest rates than you should, adding years to your debt repayment

Before using a credit card, you need to answer the following question honestly:

Do I trust myself with plastic? Can I exhibit the necessary self-control to spend only what I can afford to pay in full every month?

If you have the discipline and self-control, keep reading and we will help you find the best credit card for your needs. But, if you don’t, it is possible to live a long and fulfilling life without plastic cards in your pocket.

Which type of card is best for you?

Why do you want a credit card? The answer to that question will determine which type of card is best for you.

Just remember this critical rule when selecting a credit card:

You should have a Rewards Card for your spending. You should have a Low Rate Card for your borrowing. But you should avoid mixing the two. The best Rewards Cards tend to have higher interest rates. And the best Low Rate Cards often have no (or bad) rewards.

FAQ

The minimum payment calculation differs by credit card issuer. The most common is 1% of the principal balance plus any interest or fees that accrued in the month (or a set amount, like $25, if the minimum due is very low).

If you use your credit card at an ATM to take out cash, a few things will happen. First, you would be charged a cash advance fee, which is usually about 3%. Second, interest would start accruing immediately, because most issuers do not have a cash advance grace period. And the cash advance interest rate is usually much higher than the purchase rate. Don’t be surprised to see interest rates as high as 24% (or higher).

While there is no over-limit fee, having a credit card with a balance that is greater than the credit limit can have a very negative impact on your credit score. In general, you want to keep your credit card balance below 20% (ideally below 10%) of your credit limit.

We do not recommend closing credit cards, because it can reduce your credit score. Closing unused credit cards does two things. First, it reduces your total available credit. That increases your utilization, which is bad for your score. Second, the age of your open credit cards helps your score. If you close old accounts, you can hurt your score over time.

The law requires that any payment amount beyond the minimum due must be applied to the highest APR balance first. The minimum due is at the discretion of the credit card companies. However, it is usually applied to the balance with the lowest APR first. Your goal is to eliminate high APR debt - so don’t be afraid to make much bigger payments on credit cards. The extra amount will always go to the most expensive debt first.

Each application for new credit can take 5-10 points off your credit score. If you are planning on applying for a mortgage or auto loan in the near future, you have to be very careful. Even just 5 points can be painful. However, if you are not going to be applying for a mortgage or auto loan in the next 6-12 months, you should not worry too much about your credit score. Instead, focus on getting out of debt quickly.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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Balance Transfer, Best of, Pay Down My Debt

9 Best 0% APR Credit Card Offers – February 2018

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities. This site may be compensated through a credit card partnership.

There are a lot of 0% APR credit card deals in your mailbox and online, but most of them slap you with a 3 to 4% fee just to make a transfer, and that can seriously eat into your savings.

At MagnifyMoney we like to find deals no one else is showing, and we've searched hundreds of balance transfer credit card offers to find the banks and credit unions that ANYONE CAN JOIN which offer great 0% interest credit card deals AND no balance transfer fees. We've hand-picked them here.

If one 0% APR credit card doesn't give you a big enough credit line you can try another bank or credit union for the rest of your debt. With several no fee options it's not hard to avoid transfer fees even if you have a large balance to deal with.

1. The Amex EveryDay® Credit Card from American Express - 0% Introductory APR for 15 months, $0 Balance Transfer FEE

The Amex EveryDay® Credit Card from American Express

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on American Express’s secure website

Terms Apply

Rates & Fees


This offer is a new addition to the list and edges out competitors with the longest 0% intro period and standout perks. The Amex EveryDay® Credit Card from American Express has increased value with a $0 balance transfer fee (for transfers requested within 60 days of account opening) and 0% for 15 months on purchases and balance transfers, then 14.24% to 25.24% Variable APR. In addition to the great balance transfer offer, you can earn rewards — 2x points at U.S. supermarkets, on up to $6,000 per year in purchases (then 1x) and 1x points on other purchases.

2. Chase Slate® - 0% Introductory APR for 15 months, $0 Introductory Balance Transfer FEE

Chase Slate<sup>®</sup>

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on Chase’s secure website

This deal is easy to find - Chase is one of the biggest banks and makes this credit card deal well known. Save with a $0 introductory balance transfer fee and get 0% introductory APR for 15 months on purchases and balance transfers, and $0 annual fee. Plus, see monthly updates to your FICO® Score and the reasons behind your score for free.

You can get this offer if you complete the balance transfer within 60 days of opening the account. So it's worth a shot to see how big of a credit line you get. If it's not enough, move on to the other options below.

3. BankAmericard® Credit Card - 0% Introductory APR for 15 billing cycles, $0 Introductory Balance Transfer FEE

BankAmericard® Credit Card

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on Bank Of America’s secure website

This card is available if you have excellent credit. There is a $0 intro balance transfer fee if you complete the transfer within 60 days of opening your account.

Bank of America has just recently launched a balance transfer with no intro balance transfer fee. Credit card debt on an existing Bank of America credit card is not eligible for this offer.

Tip: The remaining no fee cards on this list are deals for 12 months or less. You might be better off paying a standard 3% balance transfer fee for a longer deal, like 0% for 18 months from the Discover it® - 18 Month Balance Transfer Offer, one of the better deals with a balance transfer fee of 3%. If you're trying to transfer from Chase, consider a deal from Bank of America with $0 transfer terms.

4. Alliant Credit Union Credit Cards - 0% Introductory APR for 12 months, NO FEE

Visa<sup>®</sup> Platinum Card from Alliant CU

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on Alliant Credit Union’s secure website

Alliant is an easy credit union to work with because you don't have to be a member to apply and find out if you qualify for the 0% Introductory APR deal (after the introductory period, a low standard variable APR applies, ranging from 10.49%–22.49%).

Just choose 'Apply as New Member' when you apply and if you are approved you'll then be able to become a member of the credit union to finish opening your account.

Anyone can become a member of Alliant by making a $10 donation to Foster Care to Success.

If your credit isn't great, you might not get a 0% intro rate - rates for transfers are as high as 5.99%, so make sure you double check the rate you receive before opening the account, and they might ask for additional documents like your pay stubs to verify the information on your application.

5. Wings Financial Credit Union - 0% Intro APR for 12 months, NO FEE

Wings Financial Visa Platinum Card

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on Wings Financial Credit Union’s secure website

Anyone can join Wings Financial Credit Union by becoming a member of the Wings Financial Foundation with a $5 donation. WFCU offers 0% intro APR for 12 months on balance transfers and purchases with no balance transfer fee for both their Wings Financial Visa Signature Card and Wings Financial Visa Platinum Card. The Wings Financial Visa Signature Card has a regular purchase APR as low as 13.95% - 18.00% variable and the Wings Financial Visa Platinum Card is as low as 7.90% - 17.70% variable APR. An added benefit of the Wings Financial Visa Signature Card is 1% cash back rewards with 2% for first 3 months.

6. Edward Jones World MasterCard - 0% Intro APR for 12 months on Balance Transfers through 4/30/2018, NO FEE

Edward Jones World MasterCard<sup>®</sup>

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on Edward Jones’s secure website

You'll need to go to an Edward Jones branch to open up an account first if you want this deal. Edward Jones is an investment advisory company, so they'll want to have a conversation about your retirement needs. But you don't need to have money in stocks to be a customer of Edward Jones and try to get this card. Just beware that you only have 60 days to complete your transfer to lock in the 0% introductory rate. This deal expires 4/30/2018.

7. First Tech Choice Rewards - 0% Intro APR on Balance Transfers for 12 months, NO FEE

Choice Rewards World MasterCard® from First Tech FCU

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on First Technology Federal Credit Union’s secure website

Anyone can join First Tech Federal Credit Union by becoming a member of the Financial Fitness Association for $8, or the Computer History Museum for $15. You can apply for the card without joining first. This introductory 0% for 12 months on balance transfers and no transfer fee on balances transferred within first 90 days of account opening is for the First Tech Choice Rewards World MasterCard. You also get 20,000 Rewards Points after you spend $3,000 on the card in your first 2 months.

8. La Capitol Federal Credit Union - 0% Intro APR on Balance Transfers for 12 months, NO FEE

Visa Rewards Card from La Capitol FCU

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on La Capitol Federal’s secure website

Anyone can join La Capitol Federal Credit Union by becoming a member of the Louisiana Association for Personal Financial Achievement, which costs $20. Just indicate that's how you want to be eligible when you apply for the card - no need to join before you apply. And La Capitol accepts members from all across the country, so you don't have to live in Louisiana to take advantage of this deal on the Prime Plus card. The introductory 0% for 12 months on balance transfers applies to balances transferred within first 90 days of account opening.

9. Purdue Federal Credit Union - 0% Intro APR for 12 months, NO FEE

Visa Signature Credit Card from Purdue FCU

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on Purdue FCU’s secure website

This deal is only for their Visa Signature card - other cards have a higher intro rate. The Purdue Federal Credit Union doesn't have open membership, but one way to be eligible for credit union membership is to join the Purdue University Alumni Association as a Friend of the University.

Anyone can join the association, but it costs $50. The good news is you can apply and get a decision before you become a member of the Alumni Association.

10. Logix Credit Union Credit Card - 0% APR for 12 months , NO FEE

The Logix Platinum MasterCard

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on Logix Federal Credit Union’s secure website

Although this card isn't available for everyone, it can be a good choice if you live in AZ, CA, DC, MA, MD, ME, NH, NV, or VA. Residence in those states allows you to join Logix Credit Union and apply for this deal. Some applicants have reported credit lines of $15,000 or more for balance transfers, so if you have excellent credit, good income, but a large amount to pay off (like a home equity line), this could be a good option. You must transfer your balance within the first 90 days your credit card account is open qualify for the intro 0% APR for up to 12 months.

11. Navy Federal Credit Card - 0% Intro APR on Balance Transfers for 12 months through 2/28/2018, NO FEE

Platinum Card from Navy Federal Credit Union

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on Navy Federal Credit Union’s secure website

This is a limited time offer valid through 2/28/2018. Balance transfers made before the end of February can receive a 0% intro APR for 12 months. After that, a variable APR between 7.24% and 18.00% applies. This card isn’t available to everyone and you need to be affiliated with the Armed Forces, DoD, Coast Guard or National Guard. Click here for more details on eligibility.

12. Premier America Credit Union - 0% Intro APR for 6 months, NO FEE

Premier Privileges Rewards MasterCard<sup>®</sup> from Premier America CU

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on Premier America’s secure website

Premier America is unique because it has a Student Mastercard® that's eligible for the balance transfer deal, though limits on that card are $500 - $2,000. There's also a card for those with no credit history - the Premier First Rewards Privileges®, with limits of $1,000 - $2,000. If you're looking for a bigger line, the Premier Privileges Rewards Mastercard® is available with limits up to $50,000.

Anyone can join Premier America by becoming a member of the Alliance for the Arts. You can select that option when you apply.

Other 0% Intro APR cards to consider

13. Money One Credit Union - 0% Intro APR for 6 months, NO FEE

Visa Platinum Card from Money One FCU

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on Money One Federal’s secure website

Anyone can join Money One Federal by making a $20 donation to Gifts of Easter Seals. And you can apply without being a member. You'll see a drop down option during the application process that lets you select Gifts of Easter Seals as the way you plan to become a member of the credit union. Credit lines for the Visa Platinum card are as high as $25,000.

14. Andigo Credit Union - 0% Intro APR for 6 months, NO FEE

Visa Platinum Card from andigo

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on Andigo’s secure website

You'll have a choice to apply for the Andigo Visa Platinum or Visa Platinum Rewards. The Visa Platinum Cash Back card doesn't have this deal. The Visa Platinum without rewards has a lower ongoing APR, starting as low as 10.99%, compared to 12.90% for the Visa Platinum Rewards card, so if you're not sure you'll pay it all off in 6 months the Platinum without rewards is a better bet.

Anyone can join Andigo by making a donation to Connect Vets for $15, and you can submit an application for the card without being a member yet.

15. Evansville Teachers Credit Union - 0% Intro APR for first 6 months on Balance Transfers, NO FEE

ETFCU's Platinum Rewards Credit Card

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on Evansville Teachers Federal Credit Union’s secure website

You don't need to be a teacher to join this credit union. Just make a $5 donation to Mater Dei Friends & Alumni Association. The Prime Plus has an ongoing rate as low as 7.25% variable, so you can enjoy a low rate even after the intro deal ends.

16. Elements Financial Credit Card - 0% Intro APR for 6 months on Purchases and Balance Transfers, NO FEE

Elements Financial Platinum Visa® Credit Card

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on ELFCU’s secure website

To become a member and apply, you'll just need to join TruDirection, a financial literacy organization. It costs just $5 and you can join as part of the application process. The ongoing rate is 10.24% variable which is lower than typical cards.

17. Justice Federal Credit Union - 0% Intro APR for 6 months on Purchases, Balance Transfers, and Cash Advances, NO FEE

Student VISA<sup>®</sup> Rewards Credit Card from Justice FCU

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on Justice Federal’s secure website

If you're not a Department of Justice, Homeland Security, or U.S. court employee (or a few others), you need to join a law enforcement organization to be a member of Justice Federal. One of the eligible associations for membership is the National Native American Law Enforcement Association. It costs $15 to join.

You can apply as a non-member online to get a decision before joining. And Justice is unique in that its Student credit card is also eligible for the 0% introductory rate on purchases, balance transfers, and cash advances, so if your credit history is limited and you're trying to deal with a balance on your very first card, this could be an option.

18. XCEL Platinum Visa - 0% Intro APR for 6 months, NO FEE

XCEL’s Platinum VISA® Credit Card

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on Xcel Federal’s secure website

Anyone can join Xcel by becoming a member of the American Consumer Council, and you can apply for the card as a non-member of the credit union, but not everyone who is approved for the card will get the low intro rate. Xcel advises you contact them to get as sense of whether your income, credit history, and employment history will qualify for the intro rate.

19. Michigan State University Federal Platinum Visa - 0% Intro APR for 6 months, NO FEE

Platinum Visa Card from Michigan State FCU

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on Michigan State University Federal Credit Union’s secure website

There is the option to apply for the Platinum Plus Visa or the Platinum Visa. The Platinum Visa has a lower ongoing APR starting as low as 8.9%, compared to the 12.9% for the Platinum Plus which can earn you rewards. Anyone can join the Michigan State University Federal Credit Union by first becoming a member of the Michigan United Conservation Clubs. However, this comes at a high fee of $30 for one year.

Are these the best deals for you?

If you can pay off your debt within the 0% period, then yes, a no fee 0% balance transfer credit card is your absolute best bet. And if you can't, you can hope that other 0% deals will be around to switch again.

But if you're unsure, you might want to consider...

  • A deal that has a longer period before the rate goes up. In that case, a balance transfer fee could be worth it to lock in a 0% rate for longer.
  • Or, a card with a rate a little above 0% that could lock you into a low rate even longer.

The good news is we can figure it out for you.

Our handy, free balance transfer tool lets you input how much debt you have, and how much of a monthly payment you can afford. It will run the numbers to show you which offers will save you the most for the longest period of time.

promo balancetransfer wide

The savings from just one balance transfer can be substantial.

Let's say you have $5,000 in credit card debt, you're paying 18% in interest, and can afford to pay $200 a month on it. Here's what you can save with a 0% deal:

  • 18%: It will take 32 months to pay off, with $1,312 in interest paid.
  • 0% for 12 months: You'll pay it off in 28 months, with just $502 in interest, saving you $810 in cash. That even assumes your rate goes back up to 18% after 12 months!

But your rate doesn't have to go up after 12 months. If you pay everything on time and maintain good credit, there's a great chance you'll be able to shop around and find another bank willing to offer you 0% interest again, letting you pay it off even faster.

Before you do any balance transfer though, make sure you follow these 6 golden rules of balance transfer success:

  • Never use the card for spending. You are only ready to do a balance transfer once you've gotten your budget in order and are no longer spending more than you earn. This card should never be used for new purchases, as it's possible you'll get charged a higher rate on those purchases.
  • Have a plan for the end of the promotional period. Make sure you set a reminder on your phone calendar about a month or so before your promotional period ends so you can shop around for a low rate from another bank.
  • Don't try to transfer debt between two cards of the same bank. It won't work. Balance transfer deals are meant to 'steal' your balance from a competing bank, not lower your rate from the same bank. So if you have a Chase Freedom® with a high rate, don't apply for another Chase card like a Chase Slate® and expect you can transfer the balance. Apply for one from another bank.
  • Get that transfer done within 60 days. Otherwise your promotional deal may expire unused.
  • Never use a card at an ATM. You should never use the card for spending, and getting cash is incredibly expensive. Just don't do it with this or any credit card.
  • Always pay on time. If you pay more than 30 days late your credit will be hurt, your rate may go up, and you may find it harder to find good deals in the future. Only do balance transfers if you're ready to pay at least the minimum due on time, every time.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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