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Credit Cards, Reviews

Blue Cash Preferred® Card Review: The Perfect Cash Back Card for Grocery Shoppers?

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.

If you’re looking for a cash back program that will reward you handsomely for grocery shopping, the Blue Cash Preferred® Card from American Express is one to check out. Although this card has an annual fee, the amount of cash back you have the potential to earn can easily cover the fee.

Blue Cash Preferred® Card from American Express

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Rates & Fees

Blue Cash Preferred® Card from American Express

Annual fee
$95
Cashback Rate
6% at U.S. supermarkets on up to $6,000 per year in purchases (then 1%), 3% at U.S. gas stations and select U.S. department stores, 1% on other purchases
Regular Purchase APR
14.24%-25.24%

Variable

How to earn cash back with the Blue Cash Preferred® Card from American Express

1. Earn 6% cash back at U.S. supermarkets (up to $6,000 per year of purchases).

The supermarket category excludes superstores and warehouses. Specialty retailers like wine stores and convenience stores likely won’t earn 6% cash back either. The annual cap for the supermarket category is $6,000 - after you earn 1%.

2. Earn 3% cash back at U.S. gas stations and select U.S. department stores, 1% cash back on everything else.

There’s no annual spending cap for the 3% and 1% cash back categories. The following department stores are examples of those that qualify for 3%:

  • Bealls
  • Belk
  • Bloomingdale’s
  • Bon-Ton Stores
  • Boscov’s
  • Century 21 Department Store
  • Dillard’s
  • JCPenney (JCP)
  • Kohl’s
  • Lord & Taylor
  • Macy’s
  • Neiman Marcus
  • Nordstrom
  • Saks Fifth Avenue
  • Sears
  • Stein Mart

3. Earn a Welcome Offer.

You can earn a $200 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.

How redeeming cash back works

Cash back earned converts into Blue Cash Rewards Dollars. You can redeem Blue Cash Rewards Dollars for a statement credit in increments of $25.

Word of warning: A cash back statement credit does not get applied to your minimum payment. To keep your card in good standing, you need to make at least the minimum payment each month even if you redeem cash back.

Overview of card benefits

These are the American Express perks:

  • Car rental loss and damage insurance. You can decline the rental agency’s collision damage waiver because you’re covered if your rental car is damaged or stolen when you pay with this card, though some countries like Australia and Italy aren’t covered.
  • Global assist hotline. When traveling you get 24/7 access to legal, emergency, and financial assistance.
  • Travel accident insurance. You get coverage for accidental death or dismemberment during travel.
  • Extended warranty of up to an additional year after your manufacturer’s warranty expires.
  • Roadside assistance for emergencies if your car needs to be towed, you need to fix a flat, or you need a battery jump. Third-party service costs may apply.

What we like about this card

6% cash back at U.S. supermarkets up to $6,000 per year

Despite the annual fee and category restrictions, we’re still big fans of the Blue Cash Preferred® Card from American Express. You only need to spend $1,583 per year (or $132 per month) on groceries to earn enough cash back to cover the $95 annual fee.

Since the supermarket spending cap is a generous $6,000 per year, you still have plenty of room to earn cash back beyond this break-even point, and if you spend a full $6,000 at U.S. supermarkets in a year, you’ll earn $360 in cash back before the annual fee is deducted.

3% cash back at U.S. gas stations.

You’ll be able to earn 3% cash back in the gas category without any cap, which can serve you well on your commute.

No revolving categories.

This card is simple to use. You don’t need to enroll in the bonus categories quarterly or annually. You just need to remember to pull out this card when you shop at major U.S. supermarkets, U.S. gas stations, and select U.S. department stores.

What we don’t like about this card

Store restrictions in 3% and 6% categories.

Category restrictions are common for most cash back cards, but still a piece of fine print you should be aware of. American Express uses merchant codes to determine how much cash back you get on each purchase.

Stores like Amazon, BJ’s Wholesale Club, Target, and Walmart won’t qualify as supermarket spending.

Furthermore, you can’t earn 3% cash back by pumping gas just anywhere. You have to buy gas at places with a U.S. gas station merchant code. Gas purchases at U.S. supermarkets or U.S. warehouse clubs will not qualify unless otherwise noted.

This restriction on gas spending may be the biggest deal-breaker for savvy gas shoppers since supermarkets and warehouses often have competitive gas prices with minimal markup.

Before you apply for the card, contact American Express if you pump at discount locations to see if the spending qualifies. American Express has a short list of example stores that fall into each cash back category here.

Who the Blue Cash Preferred® Card from American Express is best for

Whether the Blue Cash Preferred® Card from American Express is or isn’t for you will depend on how much you spend in the bonus categories.

Here’s why:

The Blue Cash Preferred® Card from American Express has a sister card that comes with a $0 annual fee called the Blue Cash Everyday® Card from American Express.

The Blue Cash Everyday® Card from American Express gives 3% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%). 2% cash back at U.S. gas stations and at select U.S. department stores. 1% cash back on other purchases.

Pick the Blue Cash Everyday® Card from American Express ($0 annual fee) instead of the Blue Cash Preferred® Card from American Express ($95 annual fee) if you spend less than $3,200 per year on qualifying groceries (about $300 a month).

If you spend more than $3,200 on groceries per year (about $300 a month), the Blue Cash Preferred® Card from American Express with the $95 annual fee outperforms the $0 annual fee Blue Cash Everyday® Card from American Express.

Another thing to consider is where you do your shopping.

If you live in a city where major supermarkets are few and far between, neither the Blue Cash Preferred® Card from American Express nor Blue Cash Everyday® Card from American Express will serve you well. You won’t get 6% for food purchases at corner markets and specialty stores.

Shoppers who stock up for groceries at warehouse or superstores like Walmart will also get less use from these American Express cash back cards since that spending doesn’t qualify.

Consumers who’ll get the most out of the Blue Cash Preferred® Card from American Express are those who spend at places that are eligible for bonus cash back like Whole Foods, Safeway, and Kroger.

Approval chances

You have the best chance of getting approved for the Blue Cash Preferred® Card from American Express with good to excellent credit (a score that’s 670 or above).

Alternatives

You can find our ultimate roundup of cash back cards for every category in this post.

Here we’ll cover four alternatives to compare against the Blue Cash Preferred® Card from American Express:

  • Blue Cash Everyday® Card from American Express
  • Chase Freedom®
  • Citi® Double Cash
  • Alliant Visa® Signature

Blue Cash Everyday® Card from American Express

Annual fee

$0

Rewards Rate

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

Regular Purchase APR

14.24%-25.24% Variable

As mentioned, the Blue Cash Everyday® Card from American Express is the $0 annual fee version of the Blue Cash Preferred® Card from American Express. It offers 6% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%). 3% cash back at U.S. gas stations and at select U.S. department stores. 1% cash back on other purchases.

Again, this is the card to go with instead of the Blue Cash Preferred® Card from American Express if you spend less than $3,200 per year on qualifying groceries.

But, let’s be honest: $3,200 or $267 per month spent on groceries is a pretty small sum even for a one- or two-person household. For this reason, the Blue Cash Preferred® Card from American Express is what we prefer of the two supermarket cards.

Chase Freedom<sup>®</sup>

Annual fee

$0

Rewards Rate

Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories every 3 months. Unlimited 1% cash back on all other purchases.

Regular Purchase APR

16.24% - 24.99% Variable

A revolving category cash back card is an alternative if you spend pretty evenly across multiple areas. Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories every 3 months. Unlimited 1% cash back on all other purchases. The categories change quarterly on the Chase Freedom®.

There’s a $1,500 quarterly spending cap on the 5% category.  The bonus category for January through March 2018 includes Gas Stations & Internet/Cable/Phone Services, but categories change every quarter, and there’s no guarantee these will be a bonus category in the future.

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

Annual fee

$0*

Rewards Rate

1% cash back when you buy and 1% cash back as you pay for those purchases

Regular Purchase APR

14.74% - 24.74%* (Variable)

An unlimited flat-rate cash back card such as the Citi® Double Cash is good to pair with any of the category cards we discuss above. The Citi® Double Cash offers unlimited 2% cash back on all purchases with no fee, making this a great card to earn a consistent cash back rate. Citi® also does not charge an annual fee for this card.

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

Annual fee

$0 For First Year

$59 Ongoing

Cashback Rate

Unlimited 3% cash back during the first year; 2.5% cash back afterwards

Regular Purchase APR

11.49%-14.49%

Variable

The Alliant Visa® Signature offers 3% cash back on all purchases during your first year as a cardholder. After the first year, you will earn 2.5% cash back. There is an annual fee for this card, however it is waived the first year. A good rewards strategy is partnering a high cash-back rate category card with one of these unlimited cards for non-category spending.

FAQ

The acceptance of American Express is worse than for Visa and MasterCard - especially outside of the United States. However, the network continues to expand every year, and it is much more difficult to find places in the US that don't accept Amex.

Anything you spend over the $6,000 cap at U.S. supermarkets will earn only 1% cash back. Fortunately, there is the 3% cash back at U.S gas stations and select U.S. department stores, so you’ll always get bonus cash back for that spending.

No, Blue Cash Rewards Dollars do not expire as long as your account remains open.

Yes, the minimum amount to redeem Blue Cash Rewards Dollars is $25.

Blue Cash Rewards Dollars can only be redeemed for statement credit. They can’t be redeemed for merchandise or gift cards.

Blue Cash Rewards Dollars are redeemable for statement credit, while Membership Rewards® Points are redeemable for statement credit, travel, gift cards, merchandise, or entertainment. With the Blue Cash Preferred® Card from American Express you receive Blue Cash Rewards Dollars. You would need a different American Express credit card, such as The The Amex EveryDay® Credit Card from American Express, to receive Membership Rewards® Points.

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.

Taylor Gordon
Taylor Gordon |

Taylor Gordon is a writer at MagnifyMoney. You can email Taylor at taylor@magnifymoney.com

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Credit Cards

How Many Credit Cards Should I Have?

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.

In today's overcrowded credit card market, issuers are constantly competing to win over consumers by offering various rewards and perks. Looking at all the cards available, you may wonder if there’s one card that can meet your needs, and odds are there isn’t a "perfect" card. That’s when having more than one credit card can be beneficial.

Not only do you have the potential to maximize rewards and savings, but you can also raise your credit score. However, keep in mind there are some pitfalls to watch out for and you should make sure you can responsibly manage multiple cards.

How many credit cards should I have?

There is no set number of credit cards for you to have, but a survey by Experian found the average number of credit cards Americans have is 3.1. This is a reasonable amount of cards to have and when managed responsibly can allow you to maximize rewards and savings. A key point to consider when deciding how many credit cards to open is your credit score.

If you have bad credit, you may not qualify for many cards and may have issues managing just one card. Since, adding several cards to your wallet has the potential to lower your score, it may be better to work on building credit before you open multiple cards. On the other hand, if you have a good or excellent score, you’re someone who has the hang of responsible credit management and can most likely manage several cards.

How do multiple cards affect my credit score?

Having multiple credit cards has the potential to both positively and negatively impact your credit score, depending on how you use your card. Below, we break down the key factors of your credit score, and the effects multiple credit cards have on each factor.

Utilization rate

Credit card utilization is the amount of your credit limit that you use across all of your cards, and makes up 30% of your FICO® Score. We consider a credit utilization below 20% ideal, but at least aim for 30% or under. If you have more than one credit card, your total credit limit will increase and you can more easily keep a lower utilization than if you had one card. But, a larger credit limit can be tempting for people who aren’t responsible with their credit and may lead to overspending, therefore negatively affecting their credit score.

The potential positive effect multiple cards have on your utilization is best explained in an example where Joe has three credit cards and Mary has one.

  • Joe’s total credit limit is $10,000 — $5,000, $3,000 and $2,000 for each card.
  • Mary’s total credit limit is $2,000 — on one card.

Now, if Joe and Mary spend $1,000 each a month, their utilizations would be:

  • Joe: 10%
  • Mary: 50%

As you can see, Joe can more easily maintain a lower utilization rate than Mary when spending the same amount of money. However, since he has a higher credit limit, he needs to practice responsible credit management and not overspend.

Average length of credit history

Each time you open a credit card, the average length of your credit history decreases. This can lower your credit score since length of accounts open makes up 15% of your FICO® Score. For example, if you have three cards opened in 2000 (18 years ago), 2016 (two years ago) and 2017 (a year ago), the average length of your credit history is seven years.

While if you only had the card opened in 2000, it would be 18 years. That’s a big difference and can lead to a slight decrease in your credit score until the average length of your accounts is greater.

Hard pulls to your credit

When you apply for a credit card — regardless if you’re approved or not, the credit card company performs a hard pull on your credit. This negatively affects your credit score, although it will bounce back in several months. The more applications you submit, the more hard pulls you’ll receive. A great feature many cards have is pre-qualification which lets you know if you may qualify for a card via a soft pull on your credit.

Soft pulls don’t affect your credit score and can be a good way to shop around for credit cards without hurting your score. Remember that once you submit an application, a hard pull will be done.

Payment history

Payment history is one of the most important factors comprising your FICO® Score, making up 35% of your score. Therefore, it’s important to pay each statement on time and in full so your credit score doesn’t drop and so you avoid late payment fees or penalties. Having more than one credit card may make it hard to do that, since you have to manage payments for several accounts with different due dates. However, there are some things you can do to potentially avoid any late payments — some credit cards allow you to choose a payment due date which can enable you to have all your bills due the same day, or you can set up autopay.

What are your goals?

Before you decide to open a credit card, it’s important to decide what you plan to use the card for so you can choose the one that best meets your needs. You may want to build credit, earn rewards or get out of debt, and there are cards for all those goals.

Building my credit score

If you’re someone with less than perfect credit or are new to credit, you may want to choose credit cards that help you build credit. There are secured cards that offer favorable terms and can provide you the resources to begin your credit journey or improve it. You can also consider asking for a credit limit increase on your current card to improve your utilization rate.

Taking advantage of rewards

When used responsibly, credit cards are a great alternative to cash and provide you with various options to earn rewards or cash back. You can be rewarded for everyday spending, meeting sign-up bonus requirements, adding authorized users and more depending on the card. The rewards or cash back you earn can be redeemed in a variety of ways from statement credits to lower your bill, to travel, merchandise and more. Whether you want to earn flat-rate rewards or higher rewards in certain categories, there’s a card for you to benefit from.

Getting out of debt

Some people may look at credit cards as a way to get out of debt, and they can be helpful with many cards offering 0% intro periods for long periods of time. With a 0% intro period, you can transfer a balance or make a purchase and not be charged interest for the given time period (note that terms apply). This is a great way to save on the typically high interest rates credit cards charge.

Cards to consider

Once you’ve decided to open a new credit card, you may become overwhelmed by the hundreds of options available. So, we’ve listed some of our favorite cards below that can be used for various reasons to make your decision a bit easier.

Balance transfers

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

Intro BT APR

0%* for 21 months on Balance Transfers*

Balance Transfer Fee

3% of each balance transfer; $5 minimum.

Regular Purchase APR

14.24% - 24.24%* (Variable)

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The Citi® Diamond Preferred® Card– 21 Month Balance Transfer Offer has the longest balance transfer intro period of any card in our database and provides you with plenty of time to pay off your debt. There is also a $0 annual fee and although there are no rewards, you can benefit from the potentially money-saving feature Citi® Price Rewind. Keep in mind good or excellent credit is needed to qualify.

Read our roundup of the best balance transfer cards and use our customizable tool to compare balance transfer cards here.

New purchases

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

Intro BT APR

0%* for 18 months on Balance Transfers*

Balance Transfer Fee

3% of each balance transfer; $5 minimum

Regular Purchase APR

15.24% - 25.24%* (Variable)

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on Citibank’s secure website

The Citi Simplicity® Card - No Late Fees Ever lives up to its name and is a straightforward and simple card with a $0 annual fee, no late fees and no penalty rate. The intro period for purchases is one of the longest we found and can provide you with the time needed to pay off any lingering balances before the intro period ends. Unfortunately, there are no rewards with this card, but you can save money via the intro offer. People with good or excellent credit may qualify for this card.

Read our roundup of the longest intro 0% purchase cards and use our customizable tool to compare 0% intro cards.

Travel rewards

 Chase Sapphire Preferred® Card

Annual fee

$0 Intro for the First Year, then $95

Rewards Rate

2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases

Regular Purchase APR

17.24% - 24.24% Variable

The Chase Sapphire Preferred® Card is a great choice for frequent travelers looking to maximize travel rewards. This card has a rewards program that is enhanced by the 25% more value points received when redeemed for travel with Chase Ultimate Rewards®. The annual fee ($0 Intro for the First Year, then $95) is also reasonable considering most travel cards have annual fees around $450, and this card still comes with a lot of the same perks, like no foreign transaction fees and baggage-delay insurance. To qualify for this card you need to have excellent credit.

Read our roundup of the best travel rewards cards here.

The information related to the Chase Sapphire Preferred® Card has been collected independently by MagnifyMoney and has not been reviewed or approved by the issuer.

Cash Back

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

Annual fee

$0*

Rewards Rate

1% cash back when you buy and 1% cash back as you pay for those purchases

Regular Purchase APR

14.74% - 24.74%* (Variable)

APPLY NOW Secured

on Citibank’s secure website

The Citi® Double Cash Card – 18 month BT offer is our top pick for a cash-back card with its competitive flat-rate rewards program that provides cardholders with a simple way to earn a high cash-back rate on all purchases. In addition, there is a long balance transfer offer at 0% intro for 18 months (after, 14.74% - 24.74% Variable APR) that also gives you the opportunity to get out of debt while continuing to earn cash back on new purchases. This card does require good or excellent credit to qualify.

Read our roundup of the best cash back cards and use our customizable tool to compare cash back cards.

Bottom line

At the end of the day, it’s ultimately your decision if you want to open additional credit cards. While they can be beneficial, you need to consider your financial situation and your goals to decide if you can manage another card.

Then, once you’re confident that you want to apply for another card, shop around to see which card can provide you the most benefit. We have several pages dedicated to rewards cards, cash back cards, balance transfer cards, and 0% purchase cards to help you find the right card.

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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Credit Cards

The Latest Smart Card on the Market Looks Surprisingly Promising

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.

There’s a new smart card on the market.

Dynamics Inc., a tech company that manufactures battery-powered interactive payment cards debuted their latest product, Wallet Card™, at the Consumer Electronics Show in January.

Wallet Card™ allows you to load multiple cards into a single card. Your credit and debit cards can be added to Wallet Card, and you can toggle between the cards depending on the transaction you are completing. You can pay using the card the same way you use a credit card, via EMV chip reader, swiping or contactless payment.

It was a massive hit with the CES audience, walking away with four CES Innovation awards, becoming the first association of banks, payments networks, and carriers to take home the Best of Innovation Award for Security Technologies.

It may feel difficult to get excited about yet another smart card. Past all-in-one cards that promised to make wallets obsolete have not fared well. Most notably, both Plastc and Coin closed their doors to customers within the past two years. We've covered the ups and downs of the smart card movement here before.

These two shuttered companies were launched as all-in-one smart cards where you could load any card you had onto a single card, but they never survived. Both Plastc and Coin took orders for cards and struggled to deliver products. Plastc infamously charged customers but never shipped any units before it was bailed out by Edge Mobile Payments, while Coin took two years to ship units before ending production and getting acquired by Fitbit.

In contrast, Wallet Card™ relies on banks to set up and issue their own Wallet Cards to customers. So, if you have accounts or credit cards with Bank ABC and Bank XYZ, you’d need a Wallet Card™ issued by both banks. This is perhaps the biggest issue for Wallet Card since the point of an all-in-one smart card is that you only need one, regardless of the cards you have.

It may not be the all-in-one dream smart card we’ve been waiting for, but the company says its relationships with banks is what makes its potential for success stronger. Dynamics has partnerships with leading global payment networks Visa, Mastercard and JCB, and global banks, issuers and carriers to improve the security and functionality of their products.

“You cannot release an EMV or contactless-enabled card without [the banks’] support,” Jeffrey Mullen, CEO of Dynamics, told CompareCards.

This level of partnership gives Wallet Card™ a leg up on those cards and new competitors, he argues. Also, the $110+ million in funding from investors that Dynamics raised provides needed funds to diversify Wallet Card™.

“Those trying to imitate us simply could never get their technology to work,” said Mullen. “We have been around for over 10 years and have volume and network-certified products in market.” Currently, Dynamics has two other products on the market for consumer use: LifeCode™ — a card that generates a code that emergency personnel can use to obtain your important health info and ePlate® Visa Card — a rewards card that lets you toggle between different rewards options.

Here are a few features that Dynamics offers with Wallet Card™:

  • Battery and organic recharging chip so consumers don’t have to charge the card.
  • Cellphone chip and antenna that transfers data between the card and the bank, which allows for updates and messages like discounts and rewards.
  • Data breach and replacement feature that allows a bank to instantly delete a compromised account number and replace it remotely. 

Next steps

You can expect to see some banks start issuing Wallet Cards™ later this year, Mullen said. Additional card features will be announced prior to launch, a company spokesperson said.

It’s not yet clear whether banks will charge customers a fee to use Wallet Card™, they added. It will be determined by the issuing bank.

On the plus side, they aren’t asking customers to pay a fee upfront like past smart cards.

Sign up to be notified when Wallet Card is available in your region.

Our take

We’re cautiously optimistic. We’ll definitely keep an eye on Wallet Card™ to see how it evolves and how consumers react, but we are a bit hesitant about the fact that this smart card isn’t truly an all-in-one card.

Currently, there are many smart card adjacent options for consumers to take advantage of, like Apple Pay®, Samsung Pay, and Android Pay™ — and all of these options are free to use. They are also simple to set up and don’t require you to carry any physical cards; your phone acts as your wallet. These services can be a great alternative to a smart card and conveniently come standard in your smartphone.

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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Credit Cards

5% cash back at Whole Foods on Amazon Prime Rewards Visa Signature Card: Is it worth it?

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.

Source: Whole Foods Market

Whole Foods customers are finally seeing more fruits of the company’s acquisition by Amazon, which was completed on Aug. 28, 2017. Amazon Prime Rewards Visa® Signature Card customers will now earn 5% cash back for purchases made at Whole Foods Market, the company announced Monday.

This makes the card a real contender among other grocery store rewards cards, but is it the best on the market?

It’s definitely an attractive option for Amazon fans who frequent Whole Foods. But we think you can still find better cash back deals out there, especially if you’re not loyal to either of these brands and are looking for a better all-around grocery cashback card.

Rewards breakdown

Amazon Prime Rewards Visa® Signature Card

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Amazon Prime Rewards Visa® Signature Card

Annual fee
$0 For First Year
$0 Ongoing
Cashback Rate
5% back on Amazon.com and Whole Foods Market purchases, 2% back at restaurants, gas stations, and drugstores, 1% back on other purchases
Regular Purchase APR
15.49%-23.49%

Variable

Credit required
good-credit

Good

The information related to the Amazon Prime Rewards Visa® Signature Card and Amazon Rewards Visa® Signature Card® has been collected independently by MagnifyMoney and has not been reviewed or approved by the issuer.

Other benefits of the card aren’t changing. Cardholders enrolled in Prime will still be able to get 5% cash back for Amazon.com purchases, 2% back at restaurants, gas stations and drugstores and 1% back on all other purchases. You’ll also earn 5 points for every $1 spent at Amazon.com, 2 points for every $1 spent at restaurants, gas stations and drug stores and 1 point for every $1 spent everywhere else.

Fees and fine print

The Amazon offering doesn’t technically come with an annual fee; however, you have to be enrolled in Amazon Prime ($99/year) to get the higher cash back rate. That means you’ll have to spend at least $2,000 per year to earn enough cash back to justify the fee, unless you think you’re getting enough Prime benefits like free 2-day shipping and video streaming to make up the expense.

How points work

Each 100 points accumulated equals $1. Points for eligible purchases can be redeemed at Amazon.com. You can also redeem your points for cash, starting at 2,000 points, or for travel, gift cards and products or services. Your points don’t expire as long as your account remains open.

Points can also be redeemed through the card provider Chase, which can be used for cash back, gift cards or travel. Those applying for the card will get a $70 Amazon.com gift card after being approved, which might take the sting out of that $99 annual Prime membership fee.

Pros & cons

Pros:

  • Not only do you earn good rewards for grocery shopping at Whole Foods, but you get cashback and points that can be used Amazon.com.
  • Although there’s no annual fee you still need to enroll in Amazon Prime, at $99 a year.
  • You can get a $70 (Amazon Prime Rewards Visa® Signature Card) or $50 (Amazon Rewards Visa® Signature Card) gift card right away to use for shopping after being approved.
  • There’s no foreign transaction fee, so this could be a good card to take on travels abroad.
  • There’s no cap on rewards earned and they never expire as long as your Amazon.com account remains open.
  • You also get travel and purchase protections and access to 24/7 Visa Signature Concierge Service.

Cons:

  • Because this card is issued by Chase, people with poor credit may have a hard time qualifying for it.
  • There’s a balance transfer fee of $5 or 5%, whichever is greater.
  • You can only get cashback on groceries purchased on Amazon or Whole Foods Market — not great for people who aren’t loyal to shopping at these two brands.

Alternatives to the Amazon Prime Rewards Visa® Signature Card

Now that the Amazon Prime Rewards Visa® Signature Card has added cash back for Whole Foods, it has competition in the groceries segment from four credit cards: the Amazon Rewards Visa Signature Card, the Blue Cash Preferred® Card from American Express, the Bank of America® Cash Rewards Credit Card and the Huntington Voice Credit Card®.

Amazon Rewards Visa® Signature Card

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

3% back on Amazon.com and Whole Foods Market purchases, 2% back at restaurants, gas stations, and drugstores, 1% back on other purchases

Regular Purchase APR

15.49%-23.49%

APPLY NOW Secured

on Amazon’s secure website

The Amazon Rewards Visa® Signature Card is for those who aren’t interested in paying $99 a year for an Amazon Prime membership. Like the Amazon Prime card, it has no annual fee and is in included in the new Whole Foods cashback deal. New cardmembers get a $50 Amazon.com Gift Card after approval. For those who don’t want to pay for Prime, but still want access to cashback rewards, this card could be a good alternative.

Blue Cash Preferred® Card from American Express

Annual fee

$95

Rewards Rate

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

Regular Purchase APR

14.24%-25.24% Variable

APPLY NOW Secured

on American Express’s secure website

Terms Apply

Rates & Fees

The Blue Cash Preferred® Card from American Express offers the best cashback deal for customers among the four cards, but there is an annual fee of $95. New cardmembers get a $200 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.

You should consider the annual fee and the cap on cashback rewards when looking at this card.

Bank of America<sup>®</sup> Cash Rewards Credit Card

Annual fee

$0

Rewards Rate

1% cash back on every purchase, 2% at grocery stores and wholesale clubs, and 3% on gas for the first $2,500 in combined grocery/wholesale club/gas purchases each quarter

Regular Purchase APR

14.24% - 24.24% Variable APR

APPLY NOW Secured

on Bank Of America’s secure website

The Bank of America® Cash Rewards card offers a lower cash back rate and no annual fee. But if you redeem your cashback earned into a Bank of America checking or saving account, you can earn a 10% bonus that can be direct deposit into a checking or savings account, credited to your statement or sent to you by check.

If you’re a Bank of America Preferred Rewards client, that bonus rises to 25-75%, making grocery cash back a better 2.5-3.5% rate. If you apply online and spend $500 in the first 90 days, you also receive a $150 online cash rewards bonus.

Even with no annual fee on this card, make sure you’re OK with receiving lower cash back than the other cards. You may want to consider joining Bank of America’s Preferred Rewards to get a bigger bang for your buck when it comes to cashback rewards.

Huntington Voice Credit Card®

Annual fee

$0 For First Year

$0 Ongoing

Rewards

3X points in one of 13 categories (capped at $2,000 each quarter or 6000 points), and all other purchases earn 1X points

Regular Purchase APR

13.24%-27.24%

APPLY NOW Secured

on Huntington National Bank’s secure website

The Huntington Voice Credit Card® has no annual fee, but puts a cap on the rewards you can earn, at $2,000 or 6,000 points each quarter. And if you switch from grocery stores to another category, you’ll only earn one point for every $1 spent, which is less than what the other three cards offer. Plus the cap can hurt if you spend more than $2,000 a quarter on groceries.

How they compare on fees

Annual fees: The Bank of America® Cash Rewards Credit Card and the Huntington Voice Credit Card® don’t charge annual fees. Blue Cash Preferred® Card from American Express charges a fee of $95 a year. Although the Amazon Prime Rewards Visa® Signature Card doesn’t technically charge an annual fee, you have to enroll in Prime to be eligible for the card.

The Prime and Huntington cards don’t charge foreign transaction fees, while Bank of America card charges 3% and the Blue Cash Preferred® Card from American Express charges 2.7% of each transaction after conversion to US dollars.

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.

Benét J. Wilson
Benét J. Wilson |

Benét J. Wilson is a writer at MagnifyMoney. You can email Benét J. at benet@magnifymoney.com

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Credit Cards

Discover Credit Cards

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.

Discover offers eight credit cards for personal use that have a variety of purposes, like building credit, earning cash back or paying down debt at a low promotional rate. There are cards for people of all credit levels, from no credit to excellent credit, but there are no business credit card options.

All Discover cards come with certain benefits such as free access to your FICO credit score, 100% U.S.-based customer service and an unlimited, automatic dollar-for-dollar match of all the cash back or miles you earn in your first year as a cardmember. However, a key point to keep in mind with Discover cards is that they are not accepted as widely as cards that use other networks like Mastercard and Visa. This is due in part to the smaller network Discover has, especially overseas. This is an important factor to consider if you travel abroad often.

Below you’ll find an overview of all the credit cards Discover offers, as well as their key features.

Cash back cards

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

Annual fee

$0

Rewards Rate

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. 1% cash back on all other purchases.

Regular Purchase APR

13.24% - 24.24% Variable

APPLY NOW Secured

on Discover Bank’s secure website

Rates & Fees

What we like

  • Ability to maximize cash back: This rewards program offers a great rate. By using your card when making purchases in the active bonus categories, you can make the most of your regular spending.

What we don’t like

  • Low cash back rate for non-bonus categories: For non-bonus category spending you earn a low cash back rate that is below average. Consider pairing this card with a flat-rate card like the Citi® Double Cash Card – 18 month BT offer to earn more cash back on purchases outside the bonus categories.
  • Must activate bonus categories: Forgetful people may miss out on cashback earnings because you’re required to activate the bonus each quarter. Set reminders or allow Discover to send you emails or notifications so you remember to activate the bonus and can use the 5% rate.

Who should consider this card

The Discover it® - Cashback Match™ is great for people looking to maximize cash back in rotating bonus categories. You can pair this card with a flat-rate cash back card to see increased rewards across all your spending.

Rewards breakdown

The Discover it® - Cashback Match™ allows you to 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. Earn 1% cash back on all other purchases.

In addition to a cash back program, there is an intro offer where Discover will match ALL the cash back earned at the end of your first year, automatically.

Other rates & fees

  • Intro Purchase APR: 0% for 14 months; 13.24% - 24.24% Variable APR after that
  • Intro Balance Transfer APR: 0% for 14 months; 13.24% - 24.24% Variable APR after that
  • Balance Transfer Fee: 3%

The 0% intro APR periods for this card are slightly below average at intro 0% for 14 months on purchases and balance transfers. Once the intro period ends, 13.24% - 24.24% Variable APR applies. There is a 3% balance transfer fee, so transferring a $1,000 balance will incur a $30 transfer fee. Discover offers a balance transfer card, the Discover it® - 18 Month Balance Transfer Offer which is better for people looking to transfer existing debt.

Discover it<sup>®</sup> chrome

Annual fee

$0

Rewards Rate

2% cash back at restaurants & gas stations on up to $1,000 in combined purchases every quarter, 1% cash back on all other purchases

Regular Purchase APR

13.24% - 24.24% Variable

APPLY NOW Secured

on Discover Bank’s secure website

Rates & Fees

What we like

  • Good for restaurant and gas station purchases: Your transactions at restaurants and gas stations will earn the highest cash back rate for this card, which is great if you frequently eat out and fuel up.

What we don’t like

  • Low cash back for everyday purchases: Spending outside of restaurants and gas stations will earn you a subpar rate. We recommend using a card with at least 2% cash back on other transactions.

Who should consider this card

People who frequently dine at restaurants or fuel up at gas stations will see the most benefit from the Discover it® chrome. Note that there are several other cards that offer over 2% cash back for restaurant and gas purchases.

Rewards breakdown

With the Discover it® chrome, you can earn up to 2% cash back at restaurants and gas stations on up to $1,000 in combined purchases every quarter - no sign-ups needed. Plus, 1% cash back on all other purchases.

There is an intro offer where Discover will match ALL the cash back earned at the end of your first year, automatically.

Other rates & fees

  • Intro Purchase APR: 0% for 14 months; 13.24% - 24.24% Variable APR after that
  • Intro Balance Transfer APR: 0% for 14 months; 13.24% - 24.24% Variable APR after that
  • Balance Transfer Fee: 3%

At intro 0% for 14 months for purchases and balance transfers, the Discover it® chrome offers a decent amount of time for you to carry a balance and pay off debt interest-free. There is a 3% balance transfer fee on all transfers. However, Discover does offer a longer intro period — see the Discover it® - 18 Month Balance Transfer Offer below.

Read our guide to the best cash back credit cards here.

Travel card

Discover it<sup>®</sup> Miles

Annual fee

$0

Rewards Rate

Unlimited 1.5x Miles per dollar on all purchases, every day

Regular Purchase APR

13.24% - 24.24% Variable

APPLY NOW Secured

on Discover Bank’s secure website

Rates & Fees

What we like

  • No foreign transaction fee: This is an important feature for a travel card to have, because foreign transaction fees are typically 3% of each purchase outside the U.S.
  • Competitive rewards: You earn unlimited 1.5x miles per dollar on all purchases, every day, with no annual fee. This is a great flat rate for miles and rivals some other travel cards that only offer high rates in select categories.

What we don’t like

  • Limited acceptance overseas: Unfortunately, people who travel outside the U.S. may have a harder time using this card because Discover has less worldwide acceptance than major issuers Visa and Mastercard.

Who should consider this card

Those who frequently travel within the U.S. will benefit the most from the flat-rate rewards program the Discover it® Miles offers.

Rewards breakdown

The Discover it® Miles earns a competitive unlimited 1.5x miles per dollar on all purchases, every day, with no annual fee. This card has an intro offer where Discover will automatically match all the miles you've earned at the end of your first year.

Other rates & fees

  • Intro Purchase APR: 0% for 14 months; 13.24% - 24.24% Variable APR after that
  • Intro Balance Transfer APR: 10.99% for 14 months; 13.24% - 24.24% Variable APR after that after that
  • Balance Transfer Fee: 3%

This card has a decent intro 0% for 14 months on purchases that gives you time to pay off anything you buy but don’t have the money to pay for right away. The balance transfer period isn’t that beneficial because it’s an intro 10.99% for 14 months (terms apply). Once the intro periods are over, you pay 13.24% - 24.24% Variable APR.

Read our guide to the best travel credit cards here.

Balance transfer card

Discover it<sup>®</sup> - 18 Month Balance Transfer Offer

Intro BT APR

0% for 18 Months

Balance Transfer Fee

3%

Regular Purchase APR

13.24% - 24.24% Variable

APPLY NOW Secured

on Discover Bank’s secure website

Rates & Fees

What we like

  • Long 0% intro APR period: The intro 0% for 18 months on balance transfers is one of the longest offers on the market, providing you a year and a half to rid yourself of debt. A 13.24% - 24.24% Variable APR applies after.
  • Cash back program: A great plus to this balance transfer card is that you can earn rewards on new purchases.

What we don’t like

  • Balance transfer fee: There is a 3% balance transfer fee for all transfers, and although this is typical to balance transfer cards, you can find cards with no fee (most often with shorter 0% intro periods).
  • Must activate bonus cash back categories: In order to take advantage of the higher cash back rate in the bonus categories, you need to activate the categories each quarter. Set a reminder so you don’t forget. You can sign up to receive push alerts from the Discover app or an email reminder when it’s time to enroll in the new bonus category.
  • Low non-bonus category cash back rate: Purchases made outside of the bonus categories will earn a low cash back rate. If you’d rather earn a flat cashback rate, the Citi® Double Cash Card – 18 month BT offer is a good alternative.

Who should consider this card

If your primary goal is to rid yourself of debt, then consider the Discover it® - 18 Month Balance Transfer Offer
is a great option at intro 0% for 18 months on balance transfers (13.24% - 24.24% Variable APR after that).

Rewards breakdown

In addition to a long balance transfer intro period, you can 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. 1% cash back on all other purchases.

There is an intro bonus: Discover will match ALL the cash back earned at the end of your first year, automatically.

Other rates & fees

  • Intro Purchase APR: 0% for 6 months; 13.24% - 24.24% Variable APR after that
  • Intro Balance Transfer APR: 0% for 18 months; 13.24% - 24.24% Variable APR after that
  • Balance Transfer Fee: 3%

This has the longest 0% intro period of any Discover card with intro 0% for 18 months on balance transfers. The intro 0% for 6 months on purchases is very short and if you’re not looking to complete a balance transfer, check out the other Discover cards on this list that have longer 0% intro purchase periods. After the intro periods, the APR is 13.24% - 24.24% Variable.

Read our guide to the best balance transfer credit cards here.

Secured card

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

Annual fee

$0

Minimum Deposit

$200

Regular Purchase APR

24.24% Variable

APPLY NOW Secured

on Discover Bank’s secure website

Rates & Fees

What we like

  • Automatic monthly account reviews at eight months: Discover will perform automatic reviews of your account starting at the eighth month your account is open to see if you qualify for an unsecured card. This is a great feature that takes the guesswork out of wondering when you’re ready for an unsecured card. If approved, you will receive your security deposit back.
  • Refundable security deposit: As long as your account is in good standing and you pay your balance in full, you will receive your security deposit back upon closing your account or upgrading to an unsecured card.
  • Cash back program: It’s hard to find secured cards with a cash back program, but the Discover it® Secured Card - No Annual Fee has one.

What we don’t like

  • High APR: The ongoing APR for this card is high at 24.24% Variable. If you happen to carry a balance, you’ll incur high interest charges.

Who should consider this card

If you’re looking to rebuild your credit or establish credit, the Discover it® Secured Card - No Annual Fee is our favorite secured card. Not only can you raise your credit score with proper behavior, but you can benefit from great features like monthly account reviews and a cash back program.

Rewards breakdown

With this card you can earn 2% cash back at restaurants & gas stations on up to $1,000 in combined purchases each quarter. Plus, 1% cash back on all your other purchases. The intro bonus is a great way to increase cash back: Discover will match ALL the cash back earned at the end of your first year, automatically.

Other rates & fees

  • Intro Purchase APR: N/A
  • Intro Balance Transfer APR: 10.99% for 6 months (terms apply); 24.24% Variable APR after that
  • Balance Transfer Fee: 3%

The main goal of a secured card is to rebuild or establish credit. That’s why there is no intro purchase period and a subpar intro 10.99% for 6 months on balance transfers with 24.24% Variable APR after that (terms apply). If you have existing debt on a high interest card, work on improving your credit with this card so you can qualify for cards with 0% intro APR offers.

Read our guide to the best secured credit cards here.

Student cards

Discover it<sup>®</sup> for Students

Annual fee

$0

Rewards Rate

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. 1% cash back on all other purchases.

Regular Purchase APR

14.24% - 23.24% Variable

APPLY NOW Secured

on Discover Bank’s secure website

Rates & Fees

What we like

  • Good Grades Rewards: Discover incentivizes students to maintain a GPA of 3.0 or higher with a $20 Good Grade Reward given at the end of each school year (a school year for these purposes is September through August) for up to five consecutive years.

What we don’t like

  • Bonus categories require activation: As a student, you have a lot to juggle and this cash back program adds another thing for you to keep track of with bonus categories that require activation each quarter. Set a reminder or sign up for alerts so you don’t forget to activate.
  • Low cash back rate in non-bonus categories: When you make purchases that aren’t in the bonus categories, you earn a low cash back rate. To offset this, you can use another card like the Journey® Student Rewards from Capital One® that offers higher, flat-rate rewards when you pay your bill on time. But we recommend students (or anyone new to credit cards) start slow — having several credit cards can make it easy to lose track of your spending and fall into debt.

Who should consider this card

Students who have the time to keep track of the quarterly rotating bonus categories can take advantage of great cashback rewards with Discover it® for Students. Just remember to activate the bonus categories!

Rewards breakdown

The Discover it® for Students offers the same rewards rate as the Discover it® - Cashback Match™ with 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. Earn 1% cash back on all other purchases.

There is an attractive intro offer where Discover will match ALL the cash back earned at the end of your first year, automatically.

Other rates & fees

  • Intro Purchase APR: 0% for 6 months; 14.24% - 23.24% Variable APR after that
  • Intro Balance Transfer APR: 10.99% for 6 months; 14.24% - 23.24% Variable APR after that
  • Balance Transfer Fee: 3%

This card has a low intro period for a student card at intro 0% for 6 months on purchases and intro 10.99% for 6 months on balance transfers with a 3% fee (terms apply). Once the intro periods ends, 14.24% - 23.24% Variable APR applies. Most student cards don’t come with intro periods so this is a nice perk, but you can get a better deal with the Bank of America® Cash Rewards credit card for Students at intro 0% for 12 months on purchases and balance transfers (after, 14.24% - 24.24% variable).

Discover it<sup>®</sup> chrome for Students

Annual fee

$0

Rewards Rate

2% cash back at restaurants and gas stations on up to $1,000 in combined purchases every quarter--no sign-ups needed. 1% cash back on all your other purchases

Regular Purchase APR

14.24% - 23.24% Variable

APPLY NOW Secured

on Discover Bank’s secure website

Rates & Fees

What we like

  • Good Grades Rewards: You can earn a $20 Good Grade Reward for maintaining a GPA of 3.0 or higher during the school year (a school year starts in September and ends in August). This reward is available for up to five consecutive years and a great motive to keep good grades.

What we don’t like

  • Low cash back rate for everyday purchases: Spending outside of restaurants and gas earns comparatively little cash back. You can find student cards that earn a higher rate on everyday purchases.

Who should consider this card

Commuter students can benefit from the cash back program of the Discover it® chrome for Students since there is a higher cash back rate for restaurant and gas station purchases.

Rewards breakdown

Similar to the Discover it® chrome, the student version of that card, the Discover it® chrome for Students, offers 2% cash back at restaurants and gas stations on up to $1,000 in combined purchases every quarter - no sign-ups needed. Plus, 1% cash back on all other purchases. As an intro bonus, Discover will match ALL the cash back earned at the end of your first year, automatically.

Other rates & fees

  • Intro Purchase APR: 0% for 6 months; 14.24% - 23.24% Variable APR after that
  • Intro Balance Transfer APR: 10.99% for 6 months; 14.24% - 23.24% Variable APR after that
  • Balance Transfer Fee: 3%

The intro periods for this card are below average, but considering most student cards don’t have any intro periods, this is a decent added perk. The card has intro 0% for 6 months on purchases and intro 10.99% for 6 months on balance transfers with 14.24% - 23.24% Variable APR after the intro period (terms apply). There is also a 3% balance transfer fee. However, if you want a longer intro period, check out the Bank of America® Cash Rewards credit card for Students, which offers intro 0% for 12 months on purchases and balance transfers (after, 14.24% - 24.24% variable).

Read our guide to the best student credit cards here.

Sports card

NHL<sup>®</sup> Discover it<sup>®</sup> Card

Annual fee

$0

Rewards Rate

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. 1% cash back on all other purchases.

Regular Purchase APR

13.24% - 24.24% Variable

APPLY NOW Secured

on Discover Bank’s secure website

Rates & Fees

What we like

  • NHL discounts: NHL fans can save money on select purchases. Save 10% on purchases at Shop.NHL.com using code ITPAYS and when you use your card to pay for an NHL.TVTM subscription.

What we don’t like

  • Bonus categories require activation: Like all Discover cards with bonus rewards categories, each quarter you need to activate them. Set a reminder or sign up for alerts so you don’t miss out.
  • Non-bonus categories earn a low rate: Spending outside of the bonus categories earns a subpar cash back rate. That’s why for all non-bonus category transactions we recommend using a high flat-rate card like the Citi® Double Cash Card – 18 month BT offer.

Who should consider this card

The only things that make this card different from the Discover it® - Cashback Match™ are the discounts on an NHL.TVTM subscription and Shop.NHL.com purchases. If you’re a hockey fan, this card has nice, extra perks. If you’re not interested in the NHL discounts, the Discover it® - Cashback Match™ makes more sense.

Rewards breakdown

The NHL® Discover it® Card offers 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. Earn 1% cash back on all other purchases.

There is an intro offer: Discover will match ALL the cash back earned at the end of your first year, automatically.

Other rates & fees

  • Intro Purchase APR: 0% for 14 months; 13.24% - 24.24% Variable APR after that
  • Intro Balance Transfer APR: 0% for 14 months; 13.24% - 24.24% Variable APR after that
  • Balance Transfer Fee: 3%

This card offers a slightly below average intro period for purchases and balance transfers at intro 0% for 14 months with 13.24% - 24.24% Variable AOR after. Balance transfers come with a 3% fee — so $45 on a $1,500 transfer. The Discover it® - 18 Month Balance Transfer Offer is the best Discover card for balance transfers, but if you’re looking to carry a balance on new purchases, this card, along with a few other cards on this list, has the longest intro period Discover offers for purchases.

Learn more about Discover

How to redeem your rewards

Cash back

Cash back can be redeemed for account credit, direct deposit, gift cards, eCertificates, charity and pay with Cashback Bonus. All redemption options start at a penny with the exception of gift cards and eCertificates, which start at $20.

Miles

You can redeem miles can for an account credit toward travel purchases made within the last 180 days, direct deposit and pay with miles at select merchants. All redemption options start at one mile. No matter how you redeem, one mile is the cash equivalent of one penny.

Key features of all Discover cards*

Discover cards all have select features that are consistent no matter which one of their eight cards you choose. Many of these features add significant value to your Discover card and may edge out cards from competing brands.

  • No annual fee
  • No foreign transaction fee
  • No late fee on your first late payment
  • Paying late won’t raise your APR
  • 100% U.S.-based customer service and live chat feature available 24/7
  • No overlimit fee: This means if you spend more than your available line of credit, you won’t be charged a fee.
  • Rewards never expire: Even if your account is closed, Discover will credit you the remaining cash rewards balance. This is a feature many cards don’t have.
  • Freeze it®: The ability to freeze and unfreeze your card with the click of a button on Discover’s mobile app or website. Freezing your card prevents new purchases, cash advances or balance transfers from occuring.
  • FICO® Score: You can receive your FICO® Score 8 for free with Discover Credit Scorecard.
  • Discover® Identity Alerts: Discover will perform a daily monitoring of your Experian® credit report and alert you if any new accounts are opened. It also monitors risky websites to see if your SSN is found.

*As of this writing.

How is Discover different than Visa and Mastercard?

When compared to other major issuers like Visa and Mastercard, Discover has a lower acceptance rate. Although Discover has a 97% acceptance rate and that seems like a lot, you are more likely to run into issues when using a Discover card compared to one backed by Visa or Mastercard. When traveling abroad, you can benefit from no foreign transaction fees on any of Discover’s eight cards — something not all Visa or Mastercards have; but you will have a hard time using your card at overseas merchants. Abroad, Discover relies on the Diners Club network which has low or nonexistent acceptance in many foreign countries, except China.

Discover’s customer service reputation

In a 2017 J.D. Power Credit Card Satisfaction Study, Discover had one of the highest customer satisfaction rankings of any credit card issuer at 827 points (out of 1,000), second only to American Express’s 835. The industry average is a ranking of 802. Customer service resources include a 100% U.S.-based customer service team that is available to answer any questions you have, 24/7. In addition to a phone line, you can live chat with Discover after signing into your account online. There's also a unique open-ended messaging feature in the Discover app called Messaging that allows cardholders to communicate with customer service agents whenever it’s convenient and the message history will be saved.

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

TAGS:

Advertiser Disclosure

Credit Cards, Featured, News

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

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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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.

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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 Amex EveryDay® Credit Card from American Express.

The key features of 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 14.24%-25.24% Variable APR
  • $0 balance transfer fee. Transfers must be requested within 60 days of account opening.
  • 2x points at US 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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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

The Amex EveryDay® Credit Card from American Express

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on American Express’s secure website

Terms Apply

Rates & Fees

Read Full Review

Annual fee

$0

Intro Purchase APR

0% for 15 Months

Intro BT APR

0% for 15 Months

Balance Transfer Fee

$0 balance transfer fee.

Regular Purchase APR

14.24%-25.24% Variable

Rewards Rate

2x points at US 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.

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. The transfers must be 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 US supermarkets, on up to $6,000 per year in purchases (then 1x), 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, then 1%)

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 6% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%). 3% cash back at U.S. gas stations and at select U.S. department stores. 1% cash back on other purchases. You'll earn a $200 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.

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

Key Information

Credit Score Required : Excellent/Good

Purchase Interest Rate : 14.24%-25.24% Variable

Annual Fee : $95

Welcome Offer : $200 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.

Intro Purchase APR : 0% for 12 months

Intro Balance Transfer : 0% for 12 months

BT Fee : Either $5 or 3% of the amount of each transfer, 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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  • 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 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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  • Good disclosure: they tell you what you need to know
  • Simple introductory bonus
  • High annual fee

Key Information

Credit Score Required : Excellent/Good

Annual Fee : $550

Sign-on Bonus : 60,000 Membership Rewards® points after you use your new Card to make $5,000 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.

 

APPLY NOW Secured

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 of 0% Intro APR on Balance Transfers for 15 months and pay an Intro $0 on transfers made within 60 days of account opening. After that: Either $5 or 5%, whichever is greater. 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 0% Intro APR on Balance Transfers for 15 months — great for those who want to pay off a large purchase over time without accruing interest.

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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 : Excellent/Good

Purchase Interest Rate : 16.24% - 24.99% Variable APR

Annual Fee : $0

Sign-on Bonus : No bonus

Intro Purchase APR : 0% Intro APR on Purchases for 15 months; then 16.24% - 24.99% Variable APR

Intro Balance Transfer Offer : 0% Intro APR on Balance Transfers for 15 months; then 16.24% - 24.99% Variable APR

BT Fee : Intro $0 on transfers made within 60 days of account opening. After that: Either $5 or 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.

APPLY NOW Secured

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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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.

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.

APPLY NOW Secured

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 a $0 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).

Transparency Score 25
Transparency Score
  • No annual fee
  • Free FICO credit score

Key Information

Credit Score Required : Please refer to issuer's website

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

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.

APPLY NOW Secured

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.

Transparency Score 27
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.

APPLY NOW Secured

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.

APPLY NOW Secured

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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Credit Cards

Unsecured Credit Cards for Bad Credit

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.

Unsecured cards are the most popular type of credit cards available — they are simply regular credit cards. The term “unsecured” means that you don’t need to deposit money or use any other collateral in order to receive a line of credit — credit card issuers extend credit based on your credit history and various other factors.

That’s why, if you have bad credit, it can be difficult to qualify for most good credit card deals. Poor credit is considered at or below a 579 credit score, and it signals to lenders that you’re a high-risk borrower.

Poor credit doesn’t make it impossible to access credit cards, however, but the key is to use credit responsibly so your credit score will improve and you’ll have a chance at qualifying for better deals.

We’ve put together this guide to help you understand the best options for people with bad credit.

The risks of unsecured cards for bad credit

The majority of unsecured cards that accept people with bad credit have numerous fees that can have you questioning if the card is really helping you.

Here are several drawbacks you may see with unsecured cards for bad credit:

  • High APRs: Typical cards have APR ranges that max out around 25%, but unsecured cards for bad credit can have APRs near 30%. Also, since you have bad credit, you most often will receive the highest APR listed in the terms and conditions.
  • Annual fee: Many credit cards in general have annual fees, but this can often be outweighed by the added benefits provided. However, unsecured cards for bad credit often lack the added benefits that cards for good credit offer.
  • Processing fee: Unsecured cards for bad credit often charge a processing fee that serves to open your account and lets you access your credit. This is something you won’t find with unsecured cards from major banks and credit card issuers.
  • Monthly service fee: This fee is characteristic of some unsecured cards and is another cost you have to keep in mind before applying since it can effectively lower your line of credit.

Credit card options when you have bad credit

Store credit cards

Odds are you’ve been asked to apply for a credit card while checking out at a store or online. The card offers often entices you with a rewards program or discount on your current purchase, and gets you thinking if you should apply. The card that you’re being offered is a store credit card and these cards can only be used at the issuing store. Since they are more likely to approve you compared with regular credit cards, they may seem like an easy way to establish credit, but there are some pitfalls to keep in mind.

Pros:

  • Good approval odds: Store cards are more likely to extend you credit than regular credit cards.
  • Rewards and discounts: Store cards often give you rewards for each purchase you make and send you card member discounts. This can be a great way to save money at stores where you frequently shop.

Cons:

  • Limited use: You most likely can only use your card in the issuing store. For example, a Target REDcardTM Credit Card can only be used for Target purchases.
  • High interest rates: Store cards tend to have higher interest rates than regular cards, so make sure you pay your statements in full and on time to avoid interest charges.

Store card options

Walmart Credit Card®

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

3% cash back on Walmart.com purchases (including purchases made on the Walmart app), 2% back on fuel purchases made at Walmart or Murphy USA (excluding Murphy Express) gas stations and 1% at Walmart & anywhere your card is accepted

Regular Purchase APR

23.90%

Variable

APPLY NOW Secured

on Walmart’s secure website

Target REDcard™ Credit Card

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

5% at Target & Target.com

Regular Purchase APR

24.15%

Variable

APPLY NOW Secured

on Target’s secure website

Lowe’s Advantage Card

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

5% off your eligible purchase

Regular Purchase APR

26.99%

APPLY NOW Secured

on Lowe’s secure website

Home Depot Consumer Credit Card

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

-

Regular Purchase APR

17.99%-26.99%

APPLY NOW Secured

on Home Depot’s secure website

Secured credit cards

A secured credit card requires you to deposit money upfront, which acts as collateral in case your account defaults. The amount you deposit typically becomes your line of credit. For example, if you put down a $200 security deposit, that means you likely have a $200 credit limit; deposit more and your credit limit will increase. Typical security deposits are $200, but you can be asked to deposit more or less depending on the card.

Pros:

  • Less chance of overspending: Since your credit limit is equal to the amount you deposit, it’s unlikely you will have a high credit limit. This can prevent you from charging large amounts and falling into debt.
  • Great way to build or improve: Secured cards are our favorite way to build or improve credit since you are more likely to be approved for a secured card with bad credit, and you can see your score rise with proper credit behavior and spending as little at $10 a month.

Cons:

  • Security deposit required: You may not have the money available for the required security deposit, therefore possibly ruling out your chances of a secured card.
  • Low credit limit: Your line of credit is equal to your security deposit and most people don’t have the money available to deposit hundreds or thousands of dollars, making your available line of credit lower than unsecured cards.

Secured card options

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

Annual fee

$0

Minimum Deposit

$200

Regular Purchase APR

24.24% Variable

APPLY NOW Secured

on Discover Bank’s secure website

Rates & Fees

The Discover it® Secured Card - No Annual Fee is our top pick for secured cards for numerous reasons — from the automatic monthly account reviews starting at 8 months to the cashback program, this card provides exceptional benefits for cardholders.

Pros:

  • Automatic monthly account reviews: Starting at 8 months, Discover will review your account to see if you qualify for receiving your security deposit back. If you have responsible credit management across all your credit products, you may be graduated to an unsecured card and recieve your security deposit back.
  • Cashback program: This card has a unique feature that’s uncharacteristic of secured cards — a cashback program where you can earn 2% cashback at restaurants or gas stations on up to $1,000 in combined purchases each quarter. Plus, 1% cashback on all your other purchases.
  • Free FICO® Credit Score: You receive your free FICO® Credit Score with Discover Credit Scorecard as well as other credit information, like recent inquiries and revolving utilization. This is a great way to track your credit progress and checking your score doesn’t affect hurt your credit.

Cons:

  • High APR: Most secured cards have high APRs, and this one does, too. But, if you pay your balance in full each month, you won’t be charged interest.

Read our review of the Discover it® Secured Card - No Annual Fee.

Capital One® Secured Mastercard®

Annual fee

$0

Minimum Deposit

$49

Regular Purchase APR

24.99% (Variable)

APPLY NOW Secured

on Capital One’s secure website


The Capital One® Secured Mastercard® is a good option for people who may not be able to afford a $200 security deposit since they also offer a $49 or $99 deposit — but take caution that you don’t choose your deposit, Capital One® does. So you may not receive the lower deposit.

Pros:

  • Potentially low security deposit: You may qualify for a $49 or $99 deposit instead of the $200 deposit depending on your creditworthiness. If you qualify for one of the lower deposits, you will still receive a $200 line of credit.
  • Access to a higher credit line: When you make your first 5 monthly payments on time, you receive a higher credit line.
  • Account reviews: Capital One® reviews your account to see if you can be transitioned to an unsecured card and receive your deposit back. However, there is no set time frame for when your account will be reviewed.

Cons:

  • High APR: Similar to other secured cards, this card has a high APR that can be an issue if you carry a balance. A good rule of thumb is to pay each bill in full and on time to avoid interest charges.

Read our review of the Capital One® Secured Mastercard®.

Credit builder loans

A credit builder loan is when a lender (typically a credit union) puts funds into a savings account or CD and a borrower makes monthly payments until the amount is paid off. Typically, the borrower cannot access the funds until the balance is paid in full. Your savings act as collateral for the lender, so if you don’t make payments they know they won’t lose money.

The monthly payments you make include interest fees and often occur over a 12-, 18- or 24-month term. Credit builder loans can be a good way for you to improve your credit score and act as a forced savings since you can’t withdraw funds until you repay the amount you borrowed.

Pros:

  • Report to the credit bureaus: Credit builder loans report to the major credit bureaus, allowing you to rebuild or establish credit history — as long as you follow the terms of your loan and make timely payments.
  • Source of savings: Since the funds are placed in a savings account or CD, you have a forced savings that is accessible at the end of the loan term.

Cons:

  • Funds are locked: You can’t withdraw money borrowed until your loan is paid off. So if you need money upfront, a credit builder loan isn’t a good option.

Options

Self Lender

Credit builder loans at Self Lender offer 12-month or 24-month loans where you pay back a loan of either $525, $545, $1,000 or $2,200. Funds are deposited into a CD that’s FDIC-insured and earns interest. However, you cannot access the funds until the loan is paid off. There is a $12 or $15 nonrefundable administration fee that you pay when you open your account. After that, you pay equal monthly payments for the term of your account (these payments include interest charges). Once you pay off the amount borrowed, you can access your funds plus interest earned.

Republic Bank

At Republic Bank, you can take out a credit builder loan for 12, 18 or 24 months with loan amounts of $500, $1,000 or $1,500. Your funds are placed in a CD that earns interest and is only accessible once the loan is paid. There is a $10 processing fee when you open your account. When you complete your monthly payments (which include interest), you can either withdraw your funds or leave them in a CD.

Unsecured credit card options for bad credit

Credit One

Credit One Bank® Platinum Visa® with Cash Back Rewards

Annual fee

$0-$99

Rewards Rate

1% cash back on purchases for qualified applicants, terms apply

Regular Purchase APR

17.24% - 25.24% Variable

APPLY NOW Secured

on Credit One Bank’s secure website


Credit One is hardly the best credit card out there, with a host of potential fees that make it expensive to carry. On the plus side, however, it is accessible to those with poor credit. It offers several cards that carry the potential for 1% cashback depending on your creditworthiness. People with bad credit will find it hard to qualify for credit cards and harder to qualify for cards with rewards. Therefore, the cashback feature is a good perk of Credit One cards. But remember — not everyone will qualify for a cashback card.

Terms

  • Regular purchase APR: 17.24% to 25.24% Variable
  • Cash advance APR: 19.15% to 26.15% Variable
  • Annual membership fee: $0 to $75 first year and $0 to $99 thereafter. Depending on your account, the annual membership fee will be divided into 12 equal portions and billed monthly or it will be billed yearly for the second and each following year your account is open
  • Authorized user participation fee: $19 annually (if applicable)
  • Cash advance fee: Either $5 or 8% of the amount of each Cash Advance, whichever is greater, or $10 or 3% of each Cash Advance, whichever is greater
  • Late payment fee: Up to $37
  • Returned payment fee: Up to $35

What to watch out for

The annual fee will hit your account right away — eating into your total available limit. The fine print of the terms and conditions explains:

NOTICE: If your Account has an Annual Membership Fee, it will be billed to your Account when it is opened and will reduce the amount of your initial available credit. For example, if your Account is established with a credit line of $300 and your First year Annual Membership Fee is $75, your initial available credit will be $225.

This is key to realize if you are charged an annual membership fee. You can quickly see your credit limit decrease when opening your account; especially if you are charged the highest annual fee.

Another term to be aware of is the authorized user participation fee at $19 annually. Most personal credit cards do not charge a fee for authorized users so this is an added fee Credit One charges if you decide to add an authorized user.

Total Visa®

Total Visa® Credit Card

Annual fee

$75 for first year, then $48 annually

Regular Purchase APR

29.99%

APPLY NOW Secured

on TOTAL’s secure website


The Total Visa® Credit Card is also accessible to those with poor credit, but it comes at a steep price —  a long list of fees. Apply with caution.

Terms

  • Regular purchase APR: 29.99%
  • Cash advance APR: 29.99%
  • Processing fee: $89 (one-time fee)
  • Annual Fee: $75 for first year. After that, $48 annually.
  • Monthly servicing fee: None for first year (introductory). After that, $75 annually ($6.25 per month).
  • Additional card fee: $29 annually (if applicable)
  • Cash advance fee: None for first year (introductory). After that, either $5 or 5% of the amount of each cash advance, whichever is greater.
  • Late payment fee: Up to $38
  • Returned payment fee: Up to $38

What to watch out for

The Total Visa® Credit Card has numerous fees that make this card quite expensive to use, and many fees are not typical of mainstream credit cards. The APR is one of the highest on the market at 29.99%, and typical credit cards have APRs that max out around 25%.

The $89 processing fee is something you won’t see with most credit cards and is a large amount to incur upon approval for the card.

Similar to Credit One, the annual fee for the Total Visa® Credit Card is deducted from your initial credit line, lowering your available credit until the fee is paid off:

Notice: The Annual Fee will be assessed before you begin using your card and will reduce the amount of credit you initially have available. Based on your initial credit limit of $300.00, your initial available credit will only be $225.00 (only $196.00 if you choose to have an additional card).

There is a monthly servicing fee of $75 annually ($6.25 per month) associated with this card that is quite steep and characteristic of cards for bad credit. Also, if you take out additional cards, you will be charged $29 annually. Considering the processing fee, annual fee and monthly service fees, you’re looking at a jaw-dropping amount of fees with this card. In the first year, if you’re only considering the processing and annual fee, you would be charged $164 and subsequent years would incur $123 in fees from the annual fee and monthly servicing fees.

On the plus side, one fee it doesn’t have is a credit limit increase fee. This is a fee some cards for people with bad credit charge when your credit limit increases, but the Total Visa® Credit Card does not charge this fee. So, going from a credit limit of $400 to $500 will not incur a fee.

Learn more

How to build credit

As someone with bad credit, it’s important to practice responsible credit behavior and follow several rules so you can improve your credit.

  1. Pay your bills on time: When you receive a bill, pay it as soon as possible and always before the due date. By paying on time, you won’t be charged a late payment fee and the lender won’t have to report your bad credit behavior to the credit bureaus. Use autopay features or set calendar alerts so you don’t forget.
  2. Pay your statement balance in full every month: Don’t carry a balance on your card because you’ll be charged interest on any overdue amounts and can fall into debt.
  3. Don’t max out your card: If you receive a $500 credit limit, don’t spend the full amount each month because that shows lenders you’re a risky client and negatively impacts your credit score. The amount of your available credit you use is known as utilization and the goal is to have a 20% or lower utilization rate — so spend $100 on a card with a $500 credit limit.

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

Credit Cards

Starbucks Rewards™ Visa® Card Review: The Catch to Earning 3 Stars per $1 at Starbucks

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.

Starbucks

The Starbucks Rewards™ Visa® Card just hit the market and coffee addicts may be wondering whether or not the retail giant’s card offering is worth the hassle of adding another card to their wallet.

After thoroughly reviewing the card’s terms and benefits, we can safely say you don’t need to run out and grab this card right away. It leaves a lot to be desired, especially if you’re only a casual patron of the Seattle-based chain.

But for people who are true die-hard fans and already members of the company’s loyalty program, you might find it an easy way to earn extra points each time you get your caffeine fix.

Cardholders are able to earn “Stars” – that’s Starbucks’ version of points — at a quicker rate than people who use the current (and might we add — free) Starbucks Rewards™ program. This comes at a price — a $49 annual fee. That’s a steep price for a card that has a tricky rewards program and limited redemption options.

Starbucks Rewards™ Visa® Card

Starbucks Rewards™ Visa® Card

Annual fee
$49 For First Year
$49 Ongoing
Rewards
Up to 3 Stars for every $1 you spend in Starbucks® stores, 1 Star for every $4 you spend outside of Starbucks® stores*
Regular Purchase APR
17.24%-24.24%

Variable

Cardholder benefits

The Starbucks Rewards™ Visa® Card builds off of the existing Starbucks Rewards™ program to give cardholders more ways to earn Stars as well as some additional perks. However, it isn’t as alluring as you may think. This card has a $49 annual fee and some tricky terms to look out for, so you have to take that into consideration to see if this card is worthwhile. The average person may find it more beneficial to stick with the free rewards program.

With the card, you’ll earn:

  • 1 Star per $4 spent if you use your Starbucks Rewards™ Visa® Card to pay directly for Starbucks purchases — or at other merchants. This is the same rate the card offers on all non-Starbucks spending. We find it odd that using your Starbucks credit card at a Starbucks store would give you the same rate as using it at their competitor, Dunkin’ Donuts.
  • 3 Stars per $1 spent at Starbucks so long as you 1) reload your registered Starbucks card using your Starbucks Rewards™ Visa® Card and 2) use that registered Starbucks card to pay for your purchase. This is a relatively high bar to meet, considering the ease of typical rewards cards, which usually require one step to capture points or rewards — swiping the card. But we suppose if you were already using a credit card to reload your Starbucks account directly from the app, it wouldn’t be too much of a hassle to swap out your current card for the Starbucks Rewards™ Visa® Card.

In addition to a rewards program, this card provides you with more opportunities to earn rewards and receive free food or beverage items:

  • New card member bonus: You’ll receive 2,500 Bonus Stars after you spend $500 on purchases in the first three months from account opening.* That’s 20 food or drink rewards which is a great perk and can be around a $140 value if you redeem rewards for eligible $7 items.
  • One-time reload bonus: You receive 250 Bonus Stars the first time you use your Starbucks Rewards™ Visa® Card to digitally load your registered Starbucks® Card in your app.* That’s equal to two food or drink rewards.
  • Instant Gold Status for Starbucks Rewards: Gold Status provides you with free same-day brewed coffee or tea refills, a birthday reward, monthly double-star days and more.*
  • 8 Barista Picks: Approximately every 6 weeks, you receive a coupon for a complimentary food or beverage item selected by Starbucks baristas. This lets you try specially curated items made just for card members. There’s a maximum of 8 coupons per 12-month period.*

*Terms and conditions apply.

Rewards breakdown

We wanted to find out how much you’d have to spend at Starbucks with this card to break even on the $49 annual fee.

For the sake of this review and the calculations done, we’re not factoring in the 2 Stars for every $1 spent with a registered Starbucks card since that is a feature that you can receive for free with the Starbucks Rewards™ program.

The Starbucks Rewards™ Visa® Card adds two other ways for cardholders to earn Stars:

  • 1 Star for every $1 you digitally load to your registered Starbucks card
  • 1 Star for every $4 you spend outside of Starbucks® stores. (Reminder, this rate also applies on Starbucks purchases made directly with your Starbucks Rewards™ Visa® Card, as a Starbucks rep stated.)

Yearly spending required to break even on the annual fee: $1,250

We crunched the numbers and found that for a cardholder to break even on the $49 annual fee — only factoring in Starbucks purchases — they would need to use their Starbucks Rewards™ Visa® Card to load an average of $1,250 a year onto their registered Starbucks card. For our calculation, we assumed that the price of a redeemed reward was $5.

If you redeem Stars for lower or higher value items, the annual amount you need to reload to then recoup the annual fee fluctuates between $875 to $2,125 a year. The wide range is due to food or beverage items typically costing $3 to $7 and everyone redeeming rewards differently.

Of course, the best way to maximize rewards is to redeem for high ticket items. For example, redeeming your rewards for $7 food or beverage items means you would only need to spend $875 a year reloading your registered Starbucks card. On the other hand, redeeming rewards for small $3 items means you need to spend $2,125 in reloads to make up the annual fee — big difference.

Redeeming Stars

The Starbucks Rewards™ Visa® Card can be used to earn Stars on all purchases, but you might not want to use it on spending outside Starbucks or directly at a Starbucks register.

When redeeming Stars, you have little flexibility and are restricted to food or drink items at participating stores (excludes alcoholic beverages, multi-serve trays or whole bakery loaves and multi-serve coffee presses). You need 125 Stars to redeem for one food or drink item. Stars can’t be redeemed for cash back, gift cards, merchandise or anything else — therefore limiting the freedom cardholders have in redeeming rewards.

Be aware that Stars expire pretty quick — the fine print states that Stars expire six months after the calendar month they were earned. So, people who want to stockpile Stars are out of luck. The Starbucks app does show you when rewards expire if you click on “Rewards details” then “Star Expiration.”

How to get the highest value

Using this card to reload your registered Starbucks card and then using that registered Starbucks card to make purchases at Starbucks will give your Stars the highest value. To receive one reward, it will cost you $125 reloading your registered Starbucks card with your Starbucks Rewards™ Visa® Card or $500 on non-Starbucks purchases and Starbucks purchases made with your Starbucks Rewards™ Visa® Card. That makes the value of points a high $0.024 to $0.056 for reloading your Starbucks card and a low $0.006 to $0.014 on non-Starbucks purchases. In comparison, some of the best credit card rewards programs give you on average $0.02 points per dollar spent.

Alternatives for occasional Starbucks customers

If you’re not someone who makes going to Starbucks a routine or spends a lot on purchases there, the most cost-effective and simple way to earn rewards is to use the free Starbucks Rewards™ program. To join, simply open an account and register a Starbucks gift card. Then, to fund your Starbucks card, you can use a credit or debit card to reload it. When you make purchases at Starbucks, use your registered Starbucks card or the digital app to pay.

The perks of earning rewards this way are you don’t have to worry about earning enough Stars to cover the annual fee and you’ll be rewarded with 2 Stars for every dollar you spend. You also have many of the same benefits as the Starbucks Rewards™ Visa® Card. Plus, by reloading your Starbucks card with a no-fee rewards card, like the Citi® Double Cash - 18 month BT offer or the Chase Freedom Unlimited® you also earn cash back as part of those cards’ unique rewards programs. The Citi® Double Cash - 18 month BT offer earns 1% cash back when you buy and 1% cash back as you pay for those purchases and the Chase Freedom Unlimited® earns unlimited 1.5% cash back on every purchase.

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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