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Best of, Earning Cashback

10 Best 5% Cash Back Credit Cards for December 2017

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.

Cash Back Credit Cards for 2017
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Credit card reward programs come in so many varieties that it can be difficult find the best cards for your spending habits. A basic, flat-rate card that earns you a certain percentage cash back on all purchases is probably the simplest bet out there. Typically, rates range from 1-2%. Not shabby, especially if you use that card exclusively. But it’s not exactly something to call home about either.

There are even better cash back rewards offerings out there, some as high as 5%. But with these high rewards cards, there’s almost always a catch. Most of the cards don’t offer 5% cash back across the board. Every few months, they pick a few select shopping categories that can earn 5% cash back. Once those few months are up, the categories change. For example, a card could offer 5% cash back on groceries, gas and airfare from January to March, then switch those categories to whole sale stores, restaurants and gyms from April to June.

Additionally, there are sometimes caps on how much of your spending can qualify for the 5% reward. So if the cap is $1,500, for example, everything past that amount won’t qualify.

The key to maximizing these great cash back card offers is to find the cards that offer cash back in categories you use the most. We can help there.

We dug around and found 10 cards that offer at least 5% cash back in some of the most common spending categories including: gas, groceries and entertainment.

Access to Bonus 5% Categories: Chase Freedom®

Chase Freedom<sup>®</sup>

Annual fee

$0

Cashback Rate

5% on certain categories, 1% on everything else

APR

15.99%-24.74%

Variable

APPLY NOW Secured

on Chase’s secure website

How it works: The Chase Freedom® card offers 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. This translates to a maximum return of $75 per quarter on the 5% bonus category. You earn an unlimited 1% cash back on all other purchases outside of the bonus categories. You can also earn a $150 Bonus $150 Bonus after you spend $500 on purchases in your first 3 months from account opening.

The 5% category changes every quarter.

Another area where the Chase Freedom® shines is in how it allows customers to redeem their rewards. The cash you’ve earned converts into Chase Ultimate Rewards® points. Every $1 equals 100 points. You can easily use the cash and apply it to your monthly statement. Or you can convert them into points and use them on travel, gift cards, merchandise, and other services through the Chase Freedom® rewards dashboard.

They make it super simple to redeem points on the go through the Chase Freedom® Mobile app. While you’re shopping, you can pick the merchant from the list on of eligible merchants on your app (popular ones include Nike, Regal Cinemas, Lowe’s, Starbucks and Best Buy). Then tell the app how much cash you want to use. You’ll get a custom e-gift card that you can present at checkout to pay for your purchases.

chasefreedommobileapp

Plus, you can stack the points earned on your Chase Freedom® card with your points on other Chase rewards cards, like the Chase Sapphire Preferred® Card. That just increases the spending power of your points.

The Fine Print: You can’t beat 5% cash back for your spending, especially with no annual fee. The downside is you have to remember to activate the category each quarter by subscribing to the program. But, if you set a reminder to do so, you can earn money without too much effort.

The Original 5% Cash Back Card: Discover it® Cashback Match™

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

Annual fee

$0

Cashback Rate

5% on certain categories, 1% on everything else

APR

11.99%-23.99%

Variable

APPLY NOW Secured

on Discover’s secure website

Rates & Fees

How it works: With the Discover it® Cashback Match™ you 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. ($1,500 of spend). You need to activate every quarter to get the 5% cash back rate. All other purchases get 1% cash back.

Earn 5% cash back in these categories through the end of 2017:

  • January to March: Gas stations, ground transportation, and wholesale clubs.
  • April to June: Home improvement stores and wholesale clubs.
  • July to September: Restaurants.
  • October to December: Amazon.com and Target

Using your rewards: Cash back from the Discover it® Cashback Match™ is tracked in dollars and cents. You can immediately apply your cash back earnings to your bank account or as a statement credit toward your bill (note: your minimum payment will still be due).There’s also no minimum rewards value if you want to redeem them for charitable donations.

The fine print: You can only earn 5% cash back on up to $1,500 of spend each quarter you activate. Once you’ve hit that cap, you’ll earn 1% on the rest of your purchases. This adds up to a $75 maximum return on your rotating bonus categories. There is no annual fee.

Extra perks: As an Intro Offer, Discover will match ALL the cash back earned at the end of your first year, automatically..

Best for Gas and Restaurants in 2017: Nusenda Visa Platinum Cash Rewards

Cash Rewards Card from Nusenda CU

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

5% in revolving categories up to $1,500 and 1% on all other purchases

APR

12.00%-14.00%

APPLY NOW Secured

on Nusenda ’s secure website

How it works: The Nusenda Visa Platinum Cash Rewards card gives 5% in revolving categories up to $1,500 and 1% on all other purchases. Notably, it offers both gas and restaurants in two quarters. As a bonus in the first 90 days, new cardholders will earn 2% instead of just 1% on purchases outside of the 5% category.

Earn 5% cash back in these categories through the end of 2017:

  • January to March: Groceries and gas expenses.
  • April to June: Movies, restaurants and home improvement.
  • July to September: Gas and education expenses.
  • October to December: Restaurants, hotels, and airfares.

Using your rewards: This offer stands out as a decent companion card for maximizing cash back. When coupled with the Chase Freedom or Discover it, you can maximize cash back in different areas during one quarter.

For an example, you can turn to the Nusenda Visa Platinum Cash Rewards card for 5% on gas and school expenses in Q3. Then pull out the Discover it for home improvement purchases for another 5% the same quarter.

The Fine Print: Once again, you’ll need to monitor your spending habits to get the most cash back from a revolving category card. If you choose to use this card along with another one, a good practice would be labeling the cards in your wallet to ensure you use the right one for the right purchases in a given quarter.

One final caveat: While there is no annual fee, Nusenda is a credit union, so you will have to go through the process of applying for membership.

Pick Your Own Cash Back Categories: U.S. Bank Cash+ Visa Signature

U.S. Bank Cash+™ Visa Signature® Credit Card

Annual fee

$0

Cashback Rate

5% on your first $2,000 in combined eligible net purchases each quarter on two categories you choose, 2% on one everyday category, 1% on all other eligible net purchases

APR

14.99%-23.99%

APPLY NOW Secured

on US Bank’s secure website

How it works: The U.S Bank Cash+ card has a revolving cash back program that’s unique in comparison to the others above because you get options.

Earning cash back: You can earn 5% cash back in two categories of your choosing each quarter limited to the first $2,000 of spend. Then you can choose another category with no cap to earn 2% cash back. On all other purchases, you earn 1% cash back.

The categories for an unlimited 2% cash back (choose one each quarter) are:

  • Gas stations
  • Restaurants
  • Grocery stores

The categories for 5% cash back up to $2,000 (choose two each quarter) are:

  • Select clothing stores
  • Cell phones
  • Electronic stores
  • Gyms and fitness centers
  • Bookstores
  • Fast food restaurants
  • Sporting goods stores
  • Department stores
  • Furniture stores
  • Movie theaters

Using your rewards: You can redeem cash back for gift cards, statement credit or a deposit into a U.S. Bank Savings, Checking or Money Market account. The first time you redeem $100 in cash back in a single transaction, you get a $25 Cash+ Bonus.

The Fine Print: Same opt-in revolving category spiel applies here except you must also remember to choose your categories. There is no annual fee. The U.S. Bank Cash+ is another good example of a card you may want to couple with another that gives you higher cash back for necessities i.e. groceries. But, for diverse spenders who can benefit from the 5% category options, the U.S. Bank Cash+ is worth considering.

Ideal for Typical Business Expenses: SimplyCash® Plus Business Credit Card from American Express

How it works: The SimplyCash® Plus Business Credit Card* gives 5% cash back on office supply and wireless telephone provider services. You also get 3% cash back on the category of your choice from a list of eight**, including:

  • Airfare purchased directly from airlines
  • Hotel rooms purchased directly from hotels
  • Car rentals purchased from select car rental companies
  • U.S. gas stations
  • U.S. restaurants
  • U.S. purchases for advertising in select media
  • U.S. purchases for shipping
  • U.S. computer hardware, software, and cloud computing purchases made directly from select providers

**Terms and Conditions Apply.

Earning cash back: You have to choose your 3% category within two months of signing. If you don’t choose one, the default is gas stations. The combined annual cap for the 5% and 3% categories is $50,000. On all other purchases, you get 1% cash back.

Using your rewards: Cash back will appear as a credit automatically on your statement. This American Express card has no annual fee, so you’ll earn cash back with a generous cap at no cost (see Rates & Fees).

The Fine Print: You must remember to choose your 3% cash back category every year. If you select one this year and forget to do so next year, you’ll be locked into the same 3% category for another 12 months until you make a switch. There is no annual fee.

*The information related to the SimplyCash® Plus Business Credit Card has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card.

5% Cash Back for the Amazon Prime Enthusiast: Amazon Prime Rewards Visa® Signature Card

Amazon Prime Rewards Visa® Signature Card

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

5% back on all Amazon purchases, 2% back at restaurants, gas stations, and drugstores, 1% back on other purchases

APR

15.24%-23.24%

Variable

APPLY NOW Secured

on Amazon’s secure website

How it works: The Amazon Prime Rewards Visa® Signature Card is open to Amazon Prime Members, so it’s somewhat exclusive. The perks of this card is 5% cash back on eligible purchases made on Amazon.com. Buying items on other merchant websites that have the Amazon Prime Rewards Visa® Signature Card payment option enabled will not earn you 5% cash back.

Using your rewards: The cash back you rack up will apply as a credit to your statement.

Do the math: If you’re not already an Amazon Prime Member, it’s probably not worth signing up to become one just for the card unless you intend to spend big bucks on the site. You need to spend $1,980 per year at Amazon.com for the 5% cash back to cover the $99 annual membership fee.

The Fine Print: The fine print of what you can and can’t buy to earn 5% is the only gotcha here. But, if you shop on Amazon.com often and stick to the rules, you’ll see a nice return from this card. There’s not an annual fee for the card, but you must be an Amazon Prime member, which costs $99 a year.

Good Fit for the Regular Target Shopper: Target REDcard

Target REDcard™ Credit Card

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

5% at Target & Target.com

APR

23.90%

Variable

APPLY NOW Secured

on Target’s secure website

How it works: For Target shoppers, there’s the REDcard. It gives you a 5% discount on your purchases at Target (minus any other discounts or promotions). Purchases that won’t earn 5% cash back include:

  • Target eye exams
  • Target gift cards and prepaid cards
  • Previous purchases
  • Target credit account payments, Target Debit Card cash back and cash advances on the Target MasterCard
  • Gift wrap and shipping and handling on Target.com purchases
  • Wireless protection program purchases and deposits required by mobile carrier

Earning and using rewards: The program is pretty simple as far as how Target gives you money back. Your 5% will apply to eligible purchases in your shopping cart at checkout. In addition to 5% cash back, this program includes free shipping from Target.com and 30 extra days for returns.

The Fine Print: No red flags with the REDcard other than watching out for the purchases excluded from cash back listed above. For faithful Target shoppers, this no annual fee card with the 5% discount may be a no brainer.

Most Straightforward 5% Rewards Card Just for Gas: Fort Knox Visa Platinum Card

Fort Knox Federal Credit Union Visa® Platinum Card

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

5% back on all gas station spending, 1% on all other purchases

APR

10.25%-15.25%

Variable

APPLY NOW Secured

on Fort Knox Federal’s secure website

How it works: The Visa Platinum Card from the Fort Knox Credit Union makes our list with the most straightforward, no cap rewards program. You can earn an unlimited 5% cash back on gas and 1% cash back on all other purchases.

Using your rewards: Cash back will appear on your statement as a credit.

The Fine Print: This rewards program is offered by a credit union in Kentucky. You’ll have to take a few extra steps to qualify for membership. If you don’t live in Kentucky or have family in Kentucky, membership is open to anyone that joins the American Consumer Council. There is no annual fee for the card, but you will need to become a member of the credit union.

6% Cash Back for the Heavy Grocery Shopper: Blue Cash Preferred® Card from American Express

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

APR

13.99%-24.99%

Variable

APPLY NOW Secured

on American Express’s secure website

Terms Apply

Rates & Fees

How it works: The Blue Cash Preferred® Card from American Express is our top pick for cardholders that want to maximize cash back on groceries. With this card, you get 6% cash back at US supermarkets excluding superstores and warehouses up to $6,000 per year. You also earn 3% cash back at US gas stations and select US department stores and 1% cash back on everything else.

Welcome offer: $200 statement credit after you spend $1000 in purchases on your new Card within the first 3 months.

Using cash back: Cash back builds as Rewards Dollars you can redeem for statement credit in increments of $25.

The Fine Print: There is an annual fee of $95 per year.

Only Advantageous for Military Service Members Living On-Base: USAA Cashback Rewards Plus American Express® Card

USAA Cashback Rewards Plus American Express® Card

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

5% cash back on gas and military base purchases on your first $3,000 in annual purchases in these purchase categories combined (After that, earn 1% for the remainder of the year), 2% on groceries on your first $3,000 in annual purchases in these purchase categories combined (After that, earn 1% for the remainder of the year), 1% on all other purchases

APR

12.90%-26.90%

APPLY NOW Secured

on USAA’s secure website

How it works: The USAA Cashback Rewards Plus American Express® Card gives 5% cash back on gas and military base purchases including commissaries, exchanges, and shopettes. The cap for the 5% category is $3,000 per year.

Earning cash back: In addition to the 5% back on gas and military base purchases, you’ll also earn 2% cash back on groceries up to $3,000 annually. On everything else, there’s 1% cash back. You can redeem cash back in increments of $1 through the USAA Rewards Service Center online or over the phone.

The Fine Print: The USAA Cashback Rewards Plus American Express® Card is light on the fine print. Just remember, the 5% category cap is $3,000 for combined gas and military base purchases per year and not per quarter. There is no annual fee.

The Key to Earning from Any Cash Back Card

In closing, regardless of which cash back card you choose, be sure to pay off your bill in full each month. That’s one underlying trap of any card rewards program. If you carry a balance over time, adding interest into the equation means you may end up paying the credit card company more than what you’re making in cash back.

Taylor Gordon
Taylor Gordon |

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

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Best Cash Back Credit Cards for Gas – December 2017

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.

Gas in car_lg

Whether you’re hit by high gas prices in your area or you’re a heavy commuter, finding a credit card that offers a high rewards rate on gas purchases will definitely come in handy. There are cards that can earn you up to 5% cash back on eligible gas purchases, which can take the sting out of a stop to top off the tank.

Here are our top picks for gas credit cards.

Fort Knox Credit Union Visa® Platinum

Fort Knox Federal Credit Union Visa® Platinum Card

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

5% back on all gas station spending, 1% on all other purchases

APR

10.25%-15.25%

Variable

APPLY NOW Secured

on Fort Knox Federal’s secure website

The Fort Knox Credit Union Visa® Platinum card offers unlimited 5% cash back on gas purchases. This is a great rate that can earn you significant rewards. There is also no annual fee. Since Fort Knox is a credit union, you will have to join in order to obtain this card. Anyone can join for $15, of which $5 represents one share in the credit union; the remaining $10 covers your one-time membership fee. This card is great for big spenders in gas who don’t mind working with a credit union.

 

NRA Complete Rewards® Visa® Card

NRA Complete Rewards® Visa® Card

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

5% back at gas purchases and on sporting goods store purchases, 1% on other purchases

APR

16.99%-22.99%

Variable

APPLY NOW Secured

on NRA’s secure website

The NRA Complete Rewards® Visa® Card has a great unlimited rate for gas purchases at 5% cash back. Exclusions apply. Anyone can apply — NRA membership is not required, and there also is no annual fee. A gas purchase is any spending at service stations and automated fuel dispensers, as denoted by merchant category codes. You can redeem for cash, merchandise, gift cards and travel. There is a bonus of a $40 statement credit when you make your first purchase (which may take 6-8 weeks to post to your account).

Sam’s Club® Mastercard®

Sams Club MasterCard

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

5% cash back on gas (on first $6,000 per year in purchases, then 1%), 3% on dining and travel, and 1% on other purchases

APR

11.65%

APPLY NOW Secured

on Sam's Club’s secure website

The Sam’s Club® Mastercard® offers 5% cash back on gas purchases (on the first $6,000 per year in purchases, then 1%). You need to be a Sam’s Club member to have this card, and annual memberships start at $45. Qualifying gas purchases include spending at gas stations, Sam’s Club fuel stations and Walmart fuel stations located in the U.S. and Puerto Rico; however, there are exclusions: Purchases at fuel stations at wholesale clubs (other than Sam’s Club), certain supercenters and supermarkets won’t earn 5%. Instead, they’ll earn 1%. Take note that the cash back redemption is limited to an annual check mailed out in February. You then have to go to a Sam’s Club to redeem your check.

Costco Anywhere Visa® Card by Citi

Costco Anywhere Visa® Card by Citi

Annual fee

$0

Cashback Rate

4% on eligible gas worldwide, including Costco (for the first $7,000 per year and then 1%), 3% on restaurant and eligible travel worldwide, 2% on all other purchases at Costco and Costco.com and 1% on everything else

APR

16.24%

APPLY NOW Secured

on Citibank’s secure website

The Costco Anywhere Visa® Card by Citi offers 4% cash back on eligible gas worldwide, (including Costco) for the first $7,000 per year, and 1% thereafter. Most gas credit cards limit you to only U.S. gas purchases and often exclude wholesale gas purchases, but not this card. In addition, you’ll earn 3% cash back on restaurant and eligible travel purchases worldwide, 2% on all other purchases at Costco and at costco.com, and 1% on everything else. There is no annual fee for this card, but you need to have a Costco membership (currently $60). The main catch with this card is it’s not simple to redeem rewards — cash back will be provided as an annual certificate in February billing statements, redeemable for cash or merchandise at US Costco Warehouses.

Wells Fargo Propel American Express® Card

Wells Fargo Propel American Express® Card

Annual fee

$0

Rewards

3X points at U.S. gas stations, 2X points at U.S. restaurants, 1X point on other purchases

APR

13.99%-25.99%

APPLY NOW Secured

on Wells Fargo’s secure website

The Wells Fargo Propel American Express® Card earns 3X points at U.S. gas stations. There is no limit to the amount of rewards you can earn at this rate. In addition, earn 2X points at U.S. restaurants and 1X points on all other purchases. Points can be redeemed for cash by applying them to your qualifying Wells Fargo account or requesting a paper check. Keep in mind: Points expire after five years. You’ll also earn 20,000 bonus points after spending $1,000 in the first three months. Wells Fargo offers an annual relationship bonus of 10% on nonbonus rewards points if you maintain a qualifying consumer Wells Fargo checking or savings account, or Portfolio by Wells Fargo® product suite account.

Bank of America® Cash Rewards Credit Card

Bank of America® Cash Rewards Credit Card

Annual fee

$0

Cashback 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

APR

13.99%-23.99%

APPLY NOW Secured

on Bank Of America’s secure website

The Bank of America® Cash Rewards card offers a good cashback rate for gas purchases. You’ll earn 3% on gas purchases and 2% at grocery stores and wholesale clubs for the first $2,500 in combined grocery/wholesale club/gas purchases purchases each quarter. All other spending will earn 1%. There is no annual fee and if you redeem your cash back into a Bank of America checking or saving account you can receive a 10% bonus. Cardholders who will have the most benefit are Bank of America Preferred Rewards clients. As a Preferred Rewards client, you can increase your bonus to 25-75%, making your gas cash back an effective 3.75%-5.25%. There’s a sign-up bonus that can kickstart your rewards: If you apply online and spend $500 in the first 90 days of your account opening, you also receive a $150 cash rewards bonus.

 

Which card is the right fit for me?

Since there are many credit cards for you to maximize your rewards from gas purchases, it can be confusing to choose a card. There are cards that offer high rates without caps. Others come with additional bonus categories to consider.

The table below breaks down which gas card may be a good fit for you when factoring annual gas spending, cashback rate and annual fee. (Sign-on bonuses are not reflected.) Keep in mind: This only factors in spending on gas purchases and doesn’t consider if you spend in other categories or at the other cashback rates.

Here are several key takeaways:

  • The Bank of America® Cash Rewards Credit Card will earn you the most cash back ONLY if you’re a Preferred Rewards member with at least $100,000 in a BofA checking/savings account. Otherwise, the Fort Knox Credit Union Visa® Platinum and the NRA Complete Rewards® Visa® Card will earn you the most cash back.
  • Although the Costco Anywhere Visa® Card by Citi doesn’t earn you the most cash back, it may be a better fit for Costco shoppers due to the other high-cashback categories
  • The Wells Fargo Propel American Express® Card earns you subpar cash back compared with the others we reviewed.
  • You won’t earn the best cashback rate with the Bank of America® Cash Rewards Credit Card unless you’re a Bank of America Preferred Rewards client with $100,000 in a checking or savings account — allowing you to benefit from a 75% redemption bonus
  • The Sam’s Club® Mastercard® is a good option for current members who fuel up at Sam’s Club and spend $6,000 or less a year on gas.
  

Card

Fort Knox Credit Union Visa® Platinum

Costco Anywhere Visa® Card by Citi

Wells Fargo Propel American Express® Card

Bank of America® Cash Rewards Credit Card: without a BofA checking / savings

Bank of America® Cash Rewards Credit Card: with $100,000 in a BofA checking / savings

Sam's Club® Mastercard®

NRA Complete Rewards® Visa® Card

Spending

$1,000

$50

$40

$30

$30

$53

$50

$50

$2,000

$100

$80

$60

$60

$105

$100

$100

$3,000

$150

$120

$90

$90

$158

$150

$150

$4,000

$200

$160

$120

$120

$210

$200

$200

$5,000

$250

$200

$150

$150

$263

$250

$250

$6,000

$300

$240

$180

$180

$315

$300

$300

$7,000

$350

$280

$210

$210

$368

$310

$350

$8,000

$400

$290

$240

$240

$420

$320

$400

$9,000

$450

$300

$270

$270

$473

$330

$450

$10,000

$500

$310

$300

$300

$525

$340

$500

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

7 Low Interest Rate Credit Cards – December 2017

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.

storecard - lg

Credit cards are notoriously known for having extremely high interest rates. In fact, the average interest rate for credit cards is 15% – that’s much higher than the interest rates you can get on a personal loan.

Unfortunately, these high interest rates can pack a big punch when it comes to paying back your consumer debt. If you only pay the minimum amount you owe, you’re paying a lot more toward interest and not making much progress toward your principle balance. Having a lower interest rate can help you pay off your debt quicker, especially if you tend to keep a balance on your card each month.

Luckily, not all credit cards have insane interest rates. There are quite a few out there in the 6% range.

If you’re unable to pay your entire credit card balance off in full each month, these low interest rate credit cards are a good alternative for you. However, many of these cards are offered by credit unions with strict memberships policies, so you may not be eligible.

One thing to note: all of these credit cards offer variable rates, which means your rate is subject to change. Many of these cards have a cap of 18% APR so your rate won’t go higher than that, but it’s something to check. Most cards also offer rates that vary based on the prime rate. The prime rate is the lowest interest rate at which banks are willing to lend money.

Apple Federal Credit Union Educator Credit Card

Educator Visa from Apple FCU

Annual fee

$0 For First Year

$0 Ongoing

APR

8.99%-18.00%

APPLY NOW Secured

on Apple Federal’s secure website

This credit card has an introductory rate of 3.99% APR for the first 12 months for qualifying members. Be aware this rate increases to between 8.99% – 18.00% APR after the promotional period expires. The rate you receive is determined by your creditworthiness, and the APR varies with the prime rate.

The maximum credit line is $35,000, and you have the option to skip a payment during July, August, and September if you meet the eligibility requirements. If you skip a payment, interest still accrues, so only skip if you can’t come up with your minimum payment.

There are no miscellaneous fees charged for regular use of this card – no annual fee, account set-up fee, cash advance fee, or foreign transaction fee.

You have a grace period of 25 days on purchases made, but if you’re late 15 days late (or more) making a payment, you’ll have to pay $25 or the minimum amount owed, whichever is less. There’s also a returned payment fee of $25 if your payment doesn’t go through.

Other fees to watch out for include a statement copy fee of $5 (you’ll receive e-statements for free), a $5 card replacement fee, and a $20 stop payment fee.

Because this is a credit card from a credit union, you must be eligible to become a member to apply for the card. According to the disclosure agreement, “Applicants must be currently employed by an Apple Federal Credit Union Select Employee Group School System: Clarke County, Fairfax, Falls Church, Frederick County, Loudoun County, Manassas City, Manassas Park, Prince William and Stafford AND have a minimum $1,000 Direct Deposit.” Apple Credit Union is based in Virginia.

Kitsap Credit Union Gold Card

Kitsap Credit Union Gold Card

Annual fee

$0 For First Year

$0 Ongoing

APR

7.15%

APPLY NOW Secured

on Energy Plus’s secure website

This credit card has a 7.15% variable rate APR. The maximum interest rate this card can have is 18%, and there’s no annual fee.

This card comes with a 25 day grace period on purchases, no fees for cash advances, travel accident insurance up to $400,000, and no balance transfer fees.

In order to qualify for the Gold Card (it offers Classic, Standard, and Platinum choices as well), you must have an annual income of $30,000.

To become a member of Kitsap Credit Union, you must live, work, worship, or attend school in Washington State. If someone you’re related to resides there, or has membership, you can also apply.

Abri Credit Union Visa Platinum Credit Card

Visa Platinum Credit Card from Abri CU

Annual fee

$0 For First Year

$0 Ongoing

APR

8.15%-17.15%

APPLY NOW Secured

on Abri Credit Union’s secure website

Abri’s Visa Platinum Credit Card also offers a 8.15% – 17.15% variable rate APR. These rates are subject to change monthly with the prime rate. Your rate is based on your credit score.

Abri also offers a balance transfer promotion: 1.99% APR for 6 months, after which time you’ll receive the normal variable rates.

The credit line ranges from $500 to $25,000, there are no balance transfer fees, there’s a 25 day grace period on purchases made, and there’s no annual fee.

There is a cash advance fee of 1.5% of the amount requested – this fee maxes out at $50. There’s also a foreign transaction fee of 1% of the amount of the transaction in U.S. dollars.

Late fees and returned payment fees are both $25, while a card replacement fee is $5.

To join Abri Credit Union, one of the largest Credit Unions in Illinois, you must live or work in DuPage, Will, Grundy, or Kendall Counties. Parts of Kane and Cook Counties are eligible as well. You can also become a member if a relative has membership.

Visa Gold Card by Educators Credit Union

Visa Gold Card from Educators

Annual fee

$0 For First Year

$0 Ongoing

APR

7.25%

APPLY NOW Secured

on Educators’s secure website

Educators Credit Union offers a Visa Gold Card at a current variable rate of 7.25% APR. It also doesn’t come with an annual fee.

Those with well-established credit can qualify for the Visa Gold Card.

The normal credit limit of this card ranges from $2,000 to $5,000 and over, and there’s a 25 day grace period.

If you’re late on a payment by 10 days or more, you’ll have to pay a fee of $10. If your payment is unsuccessful, you’ll have to pay a fee of $30.

There are no fees on cash advances or balance transfers, and there are no foreign transaction fees. There’s a rewards component to this card, and you earn one point for each $1 purchase.

Additionally, you’re eligible for $500,000 worth of travel accident insurance, rental car collision coverage, and extended warranties.

To become a member of Educators Credit Union, you must live and work in Southeastern Wisconsin. Special preference is given to those in education, healthcare, and government fields.

Visa® Platinum Credit Card by Whitney Bank

VISA Platinum Rewards Credit Card from Whitney Bank

Annual fee

$0 For First Year

$0 Ongoing

APR

13.99%-17.99%

The Visa® Platinum Credit Card from Whitney Bank  has a 13.99% – 17.99% variable APR. There’s an introductory offer of 0% APR for 7 months on purchases.

There’s also an introductory APR of 1.90% for 12 months for balance transfers.

If you’re late on making a payment after 10 days, a late fee of $15 will be incurred. If your payment gets returned, you’ll be subject to a $25 fee. Balance transfer fees are equal to 3% of the amount you’re transferring, up to a maximum of $50 for each transfer. Cash advance fees are equal to 3% of the amount requested.

Benefits of this card include $500,000 travel accident, auto rental, and baggage delay insurance. Additionally, new cardholders are automatically enrolled in the Whitney Points Plus program, so you’re eligible to earn rewards.

You must already have an account with Whitney Bank to apply for this credit card online. Otherwise, you can visit a branch to apply (it serves the Gulf South area). If you do have an account with them, you’ll be able to fill out the online application.

Lake Michigan Credit Union Prime Platinum Card

Platinum Visa Card from Michigan State FCU

Annual fee

$0 For First Year

$0 Ongoing

APR

8.90%-16.90%

APPLY NOW Secured

on Michigan State Federal’s secure website

Lake Michigan’s Prime Platinum Card has a 8.90% – 16.90% variable APR.

There’s no annual fee with this card, the maximum credit line is $25,000, and you’re eligible for free car rental insurance, 24 hour member service, a 25 day grace period, and emergency card replacement.

There are no balance transfer fees, although there’s a cash advance fee of 3% of the amount requested. There’s also a 1% foreign transaction fee.

If you’re late on a payment, you’ll incur a fee of up to $15 on balances less than $1,000, and up to $25 for balances of $1,000 or more. If your payment is returned, you’ll have to pay a fee of up to $25.

Anyone can become a member of the Lake Michigan Credit Union by donating at least $5 to in the West Michigan Chapter of the Amyotrophic Lateral Sclerosis Association. You are also eligible if you work, reside, attend school, or worship within any county in the State of Michigan’s lower peninsula. Finally, you can join if an immediate family member is a member.

VISA Platinum Credit Card by Fort Community

VISA Platinum Credit Card from Fort Community CU

Annual fee

$0 For First Year

$0 Ongoing

APR

8.90%-13.96%

APPLY NOW Secured

on Fort Community’s secure website

This credit card has an interest rate of 8.9% – 13.96% variable (it’s based on the prime rate + 3.99% APR), but it’s still less than half the average interest rate of most credit cards.

There’s no annual fee, no balance transfer fee, and no transaction fee for purchases.

The late payment fee is up to $10 if you’re late on your payment by 10 days or more, and the returned payment fee is up to $12. There’s also a cash advance fee of 3% of the amount requested, and a 1% foreign transaction fee.

To be eligible for membership to the Fort Community Credit Union, you must live or work in Dane, Dodge, Jefferson, Rock, Walworth, or Waukesha County in Wisconsin.

Always Get the Best Rates

Anytime you’re looking to borrow money, you should be making sure you’re getting the best rates possible. Otherwise, borrowing becomes a lot more expensive than it needs to be.

If you’re not eligible to apply for any of these cards, try checking your own local credit union to see what rates they offer. Aim to have an interest rate of less than 7% on your credit cards, but also make it a goal to pay off your balance in full every month to avoid every paying interest.

Find other options on our low interest rate credit cards comparison table here.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at erinm@magnifymoney.com

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Here’s What Really Happens When You Miss a Credit Card Payment

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

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Your phone rings — and rings, and rings some more. You know who’s calling. You know what the caller wants, too, but you can’t afford to give the money you owe on your credit cards. So, you let the debt collector leave a voicemail you have no intention of returning.

That’s the wrong way to deal with delinquent credit card debt, says Michaela Harper, debt counselor and director of the Community Education for Credit Advisors Foundation in Omaha, Neb.

“Don’t be afraid to talk to your creditor,” says Harper. “Avoiding them makes the problem worse because it sends it onto the next division” and brings your debt closer to being charged-off, which Harper says consumers with past-due debt should do their best to avoid. (More on that later.)

Credit card debts — or most debts for that matter — become delinquent the moment you miss a first payment. The events that follow the missed payment depend on how long the past-due debt goes unpaid. It begins with friendly reminder calls from the bank to pay your credit card bill, and can culminate in losing up to 25 percent of your annual income to wage garnishment.

The portion of consumers missing credit card payments has been on the rise since the lowest levels of delinquent credit card debt ever recorded were reached two years ago. About 2.47 percent of credit card loans made by commercial banks were delinquent in the second quarter of 2017, according to Aug. 23 figures from the Federal Reserve Economic Database.

Below is a timeline chronicling what happens when you miss a credit card payment, as well as tips from debt management experts on what you can do to mitigate the situation at each point. (You can jump to a specific time period by clicking on the milestones below.)

Zero to 30 days past due: Missed a payment

After you miss your first payment, your debt is delinquent and the clock starts ticking. Your bank should begin to contact you to remind you to make a payment. You are also likely to incur a late fee.

The first 30 days will sound more like courtesy calls, says Randy Williams, president and CEO of A Debt Coach. In reality, the bank is trying to verify your address and personal information to update the system in case your debt becomes more delinquent. (Williams used to work as a bill collector before switching over to debt consulting.)

What you can do

At this point, the bank’s agents may be more willing to provide customer service, so you can ask for an extension or create a payment arrangement to address the past-due debt before the missed payment begins to impact your credit report, which can be as early as 30 days past due. You may also try your luck at asking if the bank could waive any late fees already incurred, although the creditor is not obligated to extend this courtesy.

There’s only so much leeway a bank will give you, says Gordon Oliver, a certified debt management professional at Cambridge Credit Counseling. If you’ve asked for a late payment or interest charge to be waived in the past, you won’t have much leverage.

“There will be different reasons why a creditor may not extend those benefits at the time, but usually those terms are for borrowers who are in better standing,” Oliver adds.

30 to 90 days past due: Collection calls begin

Over the 30- to 60-day delinquency period, the bank will attempt to reach you to collect the past-due amount on your credit card bill.

“This is when they are trying to figure out what’s wrong. They are trying to collect the money,” says Williams.

“At this point it’s starting to affect your credit,” says Williams. He says the robo-collection calls may come as often as every 15 minutes. Borrowers with higher credit scores are likely to see a bigger drop than borrowers with lower scores. According to FICO data, for example, a 30-day late payment could bring a 680 credit score down 10 to 30 points and a 780 score down 25 to 45 points.

In addition to seeing your credit score drop, you will be charged late fees on the past-due account. After you have owed debt for two payment cycles, the CARD Act allows creditors to flag you in their system as a “high-risk” borrower, which means the interest you currently pay will rise to whatever the bank charges for customers at a high-risk status. That number varies from bank to bank but in some cases can get as high as 29.99 percent. The rate will stay that high at least until you have made six consecutive on-time payments, at which point the bank is required by law to reset the rate.

However, “the law doesn’t say they have to do it on their own,” says Harper. So, you will likely need to request a reset. You can find the APR charged to high-risk borrowers in your credit card terms.

What you can do

Harper says if you respond at this point, the bank may ask you to negotiate a payment arrangement.

“Never make a promise to pay that you can’t keep just to get someone off the phone,” says Harper. “If you are silent, you agree to the payment.”

Missing promised payments also gives the bank more leverage if the bill eventually goes to court, says Harper. “If they walk into court and they can point to all of the promised payments, it undermines your credibility.”

Harper advises debtors to be very clear if they cannot meet the bank’s proposed payment arrangements. You need to specifically tell them you cannot make the payments. If possible, take a look at your budget. If you find you are able to send them a small amount every month, tell them.

“That’s a valuable thing because it goes back to when the account charges off. You can slow down your progression toward charge-off by making the partial payments,” says Harper.

A charge-off happens when a creditor believes there is no chance of collecting your past-due debt, so the debt’s considered a loss. The debt gets written off the creditor’s financial statements as a bad debt and sold or transferred to a third-party collection agency or a debt buyer.

“If they feel like it’s a tough situation [you] are going through they will refer [you] to a credit counselor” around the 60- to 90-day mark, says Williams. Again, that benefit may not be extended to all consumers facing financial hardship.

90 to 120 days past due: Bank requests balance in full

After your bill is 90 days overdue, the bank will turn collection over to its internal recovery department to engage in more aggressive collection attempts. Williams says the bank will now be calling for the balance in full, not only the past-due amount.

The bank’s collectors will continue to call, but they may also send you multiple letters every day, or may attempt to reach you via social media, emails or emergency contacts.

Harper says the account may stay with the bank’s internal collections for another 90 days (180 days past due), but it’s important to note that at the 120-day past-due mark, your debt is at risk of getting charged off and being sold to a third-party collection agency.

That’s because the CARD Act states the past-due amount needs to be the equivalent of six months’ worth of your credit card’s minimum payment in order for the debt to be charged off. Including late fees and the amount added in higher interest payments, consumers may reach that figure in as little as four calendar months.

What you can do

If you can’t give them the entire past-due amount or balance in full, take a serious look at your budget. See if there is any room to make even a small payment. If you can find a few dollars, you may be able to enter a repayment plan with the bank, which will at least pause the collection calls. Don’t forget to leverage the collector’s insider knowledge. Explain your situation and ask if you can negotiate a solution with the bank.

“You want to pay off the debt, they want to pay off the debt. They may have solutions they can offer you that you don’t know about,” says Harper.

Once you’ve got an active repayment plan in place, the bank will pull you out of the collection list, Harper says.

120 to 150 days past due: Hardcore collection attempts

Watch your credit report carefully after your account becomes 120 days past due, as it may be charged off at any point. At this point, the collectors will continue to try every channel available to them to get in touch with you and collect on the debt. The attempts may get closer together and collectors may try more aggressive tactics to scare you into paying up.

“One hundred and twenty to 150 days, it is hardcore. Now they are going to offer you a settlement. They will do whatever they want to try and get to you to pay the debt off. It’s basically motivation to get you to pay now,” says Williams.

Debt collectors at this point may also take time to remind you of your rights under the CARD Act and Fair Debt Collection Practices Act as well as their right to collect on the past-due debt.

The bank’s collectors may not directly say they will proceed with legal action or wage garnishment if they do not intend to, as that is illegal under the FDCPA, but they may remind you of those possibilities if you do not pay and emphasize the bank’s right to collect on the debt owed to them, Williams says.

Williams adds, “They never say they are going to sue you; they say, ‘We have the right to protect our asset.’”

What you can do

Williams says at this point the debtor essentially has three options. Bring the account current by paying the entire past-due amount, arrange a debt settlement plan with the bank or try going to a credit counselor to create a debt consolidation plan.

“Near 120 days past due, they need to get some form of help to remedy the account before it goes to a charge off,” says Oliver, who adds that the timing the charge off will be difficult to predict.

For those who may be behind on several bills, Oliver also recommends getting some form of financial counseling to create a plan that addresses all your financial issues.

150 to 180 days past due: Last chance

At 150 days, collections efforts will remain aggressive and may even increase in frequency as the bank is now concerned about losing the debt to a charge-off.

Once your credit card payment is 150 days past due, you may start to hear the bank’s agents’ tactics shift as they may make a last-ditch effort to recover the debt, according to Williams.

What you can do

You will still have the options to pay the balance in full or reach a settlement with the bank, but you may have an additional option: Re-age your debt.

When your account is past due and you enter a re-age program, the late payments and collection activity are removed from your account. As a result, “your credit score may improve by 10 to 15 points if not growing every month from there,” according to Williams.

You will generally be asked to make at least three on-time payments on the debt before your account is re-aged. For example, the bank could ask you to pay $100 each month for three months before bringing your account back up to a current standing, but the bank will add the interest and fees you’ve already incurred to the total amount you owe. After the account is re-aged, you’ll go back to making minimum payments on the total amount of debt outstanding. Re-aging the account may also remove the “high-risk” stain from the account so your interest rate drops to to whatever it was before.

Williams says a re-age can be seen as a win-win for both parties: You are able to catch up on your delinquent debt and — in some cases — have its impact removed from your credit report, and the bank is able to recover the interest and fees that have accumulated since your account became delinquent.

Of course, the credit card company doesn’t have to allow you to re-age the debt and may not offer the option to you, but there is a possibility it will do so if you ask. Keep in mind you are only allowed to re-age an account once in 12 months and twice within five years, per federal policy, and re-aging is only an option on accounts that have been open for nine months or longer. Credit card issuers are allowed to set more strict re-aging rules for its accounts, as well.

After 180 days: Charged off to a third party

When you are about six months past due, it is extremely likely the bank will charge off your account and sell the debt to a third-party collection agency. If the bank does not charge off your account, it may take the matter to court.

If it goes to collection, third-party debt collectors may employ some of the same tactics the bank’s collectors did. Most collection agencies will push hard for the first 90 days, then at the end of that point in time they may decide to sue you, Harper says. Or they may sell your debt to another collections agency.

The third-party collectors will attempt to contact you using every channel available to them for the next 90 days or so, before they must decide to either charge off the debt or sue you. The collectors will likely demand you pay the full balance or ask you pay the balance in thirds, says Harper. If they can’t get a hold of you or get you to arrange a payment plan in that time, they may decide to turn it over to an attorney.

What you can do

You should try the same tactics that you would have used with the bank’s internal collections agency with the third-party agency, negotiating the price down and reaching a settlement with the third-party collector. If you don’t respond to the collection requests, you may be sued.

You may not be sued for some time. Companies can only sue you for unpaid debts within a certain period of time, called a statute of limitations — anywhere within three to 10 years, according to your state’s law. Your debt may be sold and resold several times before that happens. Check with the office of consumer protection at your state’s attorney general to find out what the rules are in your state.

If you are served with a lawsuit, you should check the letterhead to make sure the attorney or company filing the suit on behalf of the collections agency is licensed to practice law in your jurisdiction, says Harper, as you cannot legally be sued for credit card debt by an attorney outside your jurisdiction.

You should also be sure to respond to the lawsuit. If you don’t, you’ll likely lose. The court can automatically side with the lender if you don’t show up in court, also known as a default judgment. That may result in getting your wages or federal benefits garnished to pay the debt, not to mention the credit damage a judgment causes. Federal law states a creditor can garnish no more than 25 percent of your disposable income, or the amount that your income exceeds 30 times the federal minimum wage, whichever is less.

If you can’t afford to settle

If, given your current financial situation, the debt is unmanageable for you and you are not able to settle the account, you may want to consider bankruptcy. But you will have to file before a judgment is entered against you in court, which may be tricky to time, Harper says.

Given the difficulty in timing when the creditor will take your account to suit, you shouldn’t wait if you think bankruptcy is an option for you. Read here for more information on how and when to file for bankruptcy.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at brittney@magnifymoney.com

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I Got My First Credit Card One Year Ago – Here’s How I Already Have a Good FICO Score

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

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When I moved to the U.S. from my hometown, Hangzhou, an eastern Chinese city, in 2012 to pursue my undergraduate degree, the thought of establishing a credit history wasn’t even on my radar. I was, after all, an international student from China, where day-to-day credit card use has only recently caught on.  

It wasn’t until I returned to the U.S. a few years later to pursue my master’s in Chicago that I realized I’d need to establish credit if I planned to launch my career in the States.  

It’s been only a year since I opened my first card last September, and I already have a solid FICO score – 720, the last time I checked.  That’s not a perfect score by any means, but it lands me safely in the “good” credit range, meaning I probably won’t have trouble getting approved for new credit in the future. I still have work to do if I want to get into the “very good” credit category, which starts at 740, according to MyFICO, but for a credit card newbie I’m not disappointed in my progress so far. 

Here’s how I did it:  

I selected the right card for my needs
 

I wish I could say I diligently researched credit cards to choose the best offer and best terms, but honestly, I just got lucky: 

Shortly before graduate school started, I visited friends in Iowa. When we were about to split the bill after dinner at a Japanese restaurant, I noticed that all my friends had a Discover card with a shimmering pink or blue cover. The Discover it for Students card was known for its high approval rate for student applicants, and had been popular among international students. 

I thought, “Oh, maybe I should get this one, too.”  

One of the friends sent me a referral link that very night. I applied and got approved quickly. We both received a $50 cash-back bonus after I made my first purchase — an iPhone — using the card through Discover’s special rewards program. I even received 5 percent cash back from the purchase.  

Besides imposing no annual fee, the card has other perks, like rewarding me with a $20 cash-back bonus when I reported a good GPA, letting me earn 5 percent cash back on purchases in rotating categories, and matching the cash-back bonus I earned over the first 12 months with my account. For me, it was a great starter card, but there are plenty of other options out there.

Check out our guide on the best credit cards for students. 

I also could have explored other options of establishing credit, like opening a secured card, for example, which would have been a smart option if I hadn’t been able to qualify for the Discover it student card.

I never missed a payment

Despite my very limited financial literacy at the time, I attribute my current stellar credit score to the old, deeply ingrained Chinese mentality about saving and not owing. 

I never missed payments, and I always paid off my balance in full each month, instead of just making the $35 minimum payment. I didn’t want to pay a penny of interest. 

Credit cards carry high interest rates across the board, but student credit cards generally have some of the highest APRs. This is because lenders see students like me — consumers without much credit history — to be risky borrowers, and they charge a higher interest rate to offset that  risk. 

Best Student Credit Cards October 2017 

It wasn’t until much later when I learned that payment history is critical to credit establishment. In fact, it is the biggest factor there is. It accounts for as much as 35 percent of my FICO score. Naturally, I felt like I dodged a bullet! 

A Guide to Getting Your Free Credit Score 

I was careful not to use too much of my available credit

My friends with more experience advised me to use as little of my available credit as possible. They warned me that overuse had hurt their credit scores in the past. This didn’t much sense to me, but I followed their advice, for the most part diligently.. 

I later learned this is almost as important as paying bills on time each month. Your utilization rate is another 30 percent of the FICO score. Credit experts urge cardholders to keep their credit utilization ratio below 30 percent.  

That means if you have three credit cards with a total available limit of $10,000, you should try never to carry a total balance exceeding about $3,000. 

A Guide to Build and Maintain Healthy Credit 

I beefed up my score with on-time rent payment 

Keeping in mind the importance of not maxing out my credit card, I never considered paying my rent with the card. In fact, some landlords charge credit card fees for tenants who try to pay with plastic.  

But I did find a way to establish credit by paying rent using my checking account. 

I paid rent to my Chicago landlord through RentPayment, an online service. RentPayment gave me the option of having my payments reported to TransUnion, one of the three major credit-reporting agencies. Because I knew I’d always pay bills on time, I signed up for the program.  

This likely helped me improve my credit mix, another key factor influencing one’s credit score. The more types of accounts you show on your report, the better your score can be — providing you make all your payments on time.  

Yes, I made mistakes. This was my biggest one.

My first foray into the world of credit wasn’t completely blip-free.  

The only thing that hurt my credit, besides my short credit history, was that I had tried signing up for a Chase credit card and other ways to finance my iPhone just a few days before I applied for my Discover card.  

None of the other banks approved my applications, and my score went down from the very beginning due to the number of “hard inquiries” against my report. Hard inquiries occur when lenders check your credit report before they make lending decisions, and having too many inquiries in a short period of time can result in several dings to your credit score. 

I’ve learned my lesson, though. And I haven’t applied for a new credit card since. Today, as I said, my FICO score is a healthy 720, and I am on the lookout for a second credit card now that I’ve graduated and gotten a job. 

Shen Lu
Shen Lu |

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

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Balance Transfer

Capital One Balance Transfer Offer

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

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Balance transfer offers on credit cards can be an excellent way to reduce the cost of expensive credit card debt, helping you can get out of debt faster. Capital One only offers one card with a balance transfer intro period. Balance transfers are usually offered only to people with excellent credit, however you may qualify if you have good credit. It’s always a good idea to check if you’re prequalified before submitting an application.

In this article, we will:

  • Review the balance transfer offer from Capital One
  • Provide details on who can be approved for the offer
  • Decode the fine print, so that you know how to avoid tricks and traps that could cost you

Note: If you are looking to get out of debt, you should consider downloading our free Debt Free Guide. It will show you how to slash your interest rates, boost your credit score, negotiate hard with creditors and become debt-free fast and forever. Balance transfers can be a great tool in your debt-free strategy, but everyone should have a strategy. And this guide can help you build one.

Offer Review

Capital One® Quicksilver® Cash Rewards Credit Card

Capital One® Quicksilver® Cash Rewards Credit Card

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The Capital One® Quicksilver® Cash Rewards Credit Card is best known for having no annual fee, and providing unlimited 1.5% cash back on all of your spend. Unlike many cash back credit cards, there are no rotating categories, no caps, and no minimums for getting your cash back. They really raised the bar on cash back credit cards, until Citibank created the Citi® Double Cash Card which does the same thing, except you earn unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.

Capital One® Quicksilver® Cash Rewards Credit Card offers 0% intro APR for 9 months on purchases and balance transfers, with a 3% fee. When compared to the rest of the market, this is a mediocre intro period. You can find cards with intro periods of 15, 21 and 24 months. We list all of the balance transfer options here.

Approval Criteria

Capital One markets this card for people with excellent credit. On their website, excellent credit is defined as someone who:

  • Has never declared bankruptcy or defaulted on a loan
  • Hasn’t been more than 60 days late on any credit card, medical bill, or loan in the last year
  • Has had a loan or credit card for 3 years or more with a credit limit above $5,000

If your credit score isn’t excellent, your options are much more limited. In fact, we recommend considering a personal loan to get a lower rate on your debt, where you will have a better chance of getting a higher loan amount.

 Fine Print Alert

Balance transfers can save you a lot of money. However, there are certain traps out there, and if you fall for those traps it could end up costing you a lot of money. Make sure you do the following:

  • If you are approved for your balance transfer credit card, complete the balance transfer right away. The 0% promotional offer begins the day your account is open.
  • Set up automatic payments so that you are never late. Even being late by one day can result in a steep late fee. And, if you are late by 60 days or more, you can see a big spike in your interest rate.
  • Don’t spend on the credit card. Although Capital One does offer 0% on purchases, they do that as a temptation. They want you to spend, so that you don’t use the promotional period to pay down your debt. If you are using a balance transfer, you should be doing it to get out of debt faster.

To learn more about balance transfers, you can visit our learning center.

Balance transfers, when used properly, can take years off your debt repayment. With proper credit behavior, the Capital One® Quicksilver® Cash Rewards Credit Card can save you money and help rid you of debt.

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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

What’s the Difference Between a Charge Card and a Credit Card?

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

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If you’re shopping around for your next credit card, chances are you might come across a charge card. It can sometimes be difficult to know the difference unless you know the telltale signs. And if you choose the wrong kind and don’t use it correctly, you could end up in a world of financial trouble.

Charge cards aren’t too much different from credit cards, but there are a few key things you need to know.

What is a charge card?

As with a credit card, you use a charge card to make purchases and pay the balance off later. Here’s the biggest difference: Unlike credit cards, which let you keep a revolving balance from month to month, a charge card requires you to pay off the balance in full by your bill’s due date. You cannot make a big purchase and pay it off over time.

Charge cards also have no preset spending limit. This doesn’t mean that it has no spending limit. Rather, your actual spending limit can change quite often depending on how much you’re using the card, if you have any late payments on your record, etc.

At MagnifyMoney, we recommend you always pay off your credit card statement balance in full each month. If that’s something you already do, you’d find using a charge card is pretty much the same as using a credit card. However, there are a few differences that might make you want to choose one type of card over the other.

Pros and cons of using a charge card

Pro: You’re required to pay off the balance in full

One of the biggest advantages of a charge card is that you are required to pay it off in full each month. If you’re the type of person who has a hard time maintaining the discipline to do this normally, using a charge card might force you to develop this good habit. And because you will pay off the balance in full each month, you’ll never pay any interest charges and you won’t rack up any debt.

Con: You’re required to pay off the balance in full

Paying off your bill in full each month is a huge advantage, but it can also be a disadvantage. Yes, it’ll keep you out of debt, and you won’t have to pay interest charges, but if you’re relying on the card as a source of emergency funds, you’ll be better served with a credit card that’ll let you carry a balance from month to month if a very expensive emergency pops up.

Pro: Many charge cards come with a smokin’ hot rewards program

For example, as of this writing, the Platinum Card® from American Express gives you $15 in Uber credits each month (plus a $20 bonus in December), a $200 airline credit each calendar year, and a 60,000-point sign-up bonus if you spend $5,000 within the first three months, among numerous other perks. There are, of course, credit cards that offer similarly attractive rewards.

Con: Charge cards often carry high fees

Again, we’ll use the Platinum Card® from American Express as an example: It carries a $550 annual fee. The cheapest card from Amex is the American Express® Green Card that has a $95 annual fee, though Amex waives it the first year. And if you make a late payment or fail to pay your bill in full? You could be slapped with a late fee of (up to $38 on the aforementioned Platinum Card), and it’ll go down as a negative mark on your credit report.

Con: There aren’t a lot of charge-card options

You may be sensing a trend — American Express is among the last major credit card issuers to offer charge cards. That means your choices of charge cards are already limited — you can choose from just three cards: American Express® Green Card, the Premier Rewards Gold Card from American Express, and the Platinum Card® from American Express. American Express isn’t as widely accepted as Visa or Mastercard, so you’ll want to make sure you have a backup when you’re out shopping, just in case it isn’t accepted.

Pro: A charge card helps you build credit

Charge cards can also help you build credit, and you don’t need to go into debt to do it. As long as you pay on time, the account will be listed on your credit report as an example of your positive payment history — the most important aspect of your credit score. And for newer scoring models, charge cards won’t affect your credit utilization ratio — the second most important factor in determining your credit score. That’s because American Express reports its charge cards as “open” lines of credit, as opposed to a revolving line of credit, and FICO does not factor open lines of credit into its credit utilization calculation.

But that’s not always the case. Rod Griffin, the director of public education at Experian (one of the major credit reporting agencies), said some credit scores treat open credit lines like revolving accounts. “Newer scoring systems are more likely to differentiate between the two than older credit scoring systems,” he said. “Your credit report almost certainly will not show a zero balance for the charge card if you use it and could affect your utilization rate.”

With newer scoring models that don’t factor open credit lines into your credit utilization ratio, that means making a big purchase (and paying it off at the end of the month) won’t have any effect on your credit score, nor will it lower your credit utilization ratio if you have other credit card debt. (A credit card also helps you build credit, but you may find yourself tempted to carry a balance.) Checking your credit score regularly will help you understand how your charge card use affects your credit standing.

Con: A changing spending limit can be bothersome

If you want to make a big purchase or it’s getting toward the end of the month, the only way to know for sure if you have any credit left is to log in to your account and check. Still, you shouldn’t be using your charge card willy-nilly to buy Learjets and mansions anyway, so as long as you keep your spending under control, it’s unlikely you’ll go over your limit.

The bottom line

Charge cards do have their quirks. But as long as you keep your spending within a reasonable range for your lifestyle and pay off your bill in full each month (as you should do with a normal credit card anyway), a charge card can be a useful tool in your financial arsenal.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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Credit Cards

Bank of America® Premium Rewards® Credit Card Review: Rewards for High Spenders with a BofA Relationship

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.

Updated October 5, 2017

Bank of America is joining the premium rewards card category with the new Bank of America® Premium Rewards® Credit Card. This card boasts a 50,000-point sign-on bonus and a much lower annual fee ($95) than comparable cards, making it a great way for consumers to earn rewards at a low yearly cost. There are additional perks for Bank of America account holders that will allow you to earn a higher rewards rate, making this card a great choice if you have an account with Bank of America and are looking for a premium rewards card.

We believe that everyone should be able to earn at least 2% cash back, without paying a fee (thanks to Citi® Double Cash Card). If you have over $20,000 in a Bank of America checking, savings, or investment account, you will be able to earn more than 2%. If you have less (or no relationship balance), it gets more complicated.

Bank of America® Premium Rewards® Credit Card

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Bank of America® Premium Rewards® Credit Card

Annual fee
$95 For First Year
$95 Ongoing
Rewards
2 points on travel, 2 points on dining, 1.5 points on all other purchases
APR
16.99%-23.99%

Variable

Credit required
excellent-credit
Excellent

Key insights

  • This card only works if you have a deep relationship with Bank of America. If you don’t have other assets (either in a savings account or investment account), you are better off with a flat-rate cash back card, such as the Citi® Double Cash Card
  • This card is probably not for you:
    1. If you have less than a $50,000 relationship with Bank of America and spend less than $2,000 a month on the card.
    2. If you spend a lot in travel and dining but have less than a $20,000 total relationship balance with Bank of America.
  • This card is for you – and you can earn more than 2%:
    1. If you spend at least $2,000 a month and have at least a $50,000 relationship balance with Bank of America
    2. If you have a relationship balance between $20,000 and $50,000 and spend a lot on travel and dining.
  • The biggest winners are people who have more than $100,000 at BofA (and that can include an IRA at Merrill Edge) and spend more than $3,000 a month on the card. People with this profile can earn up to 3% – which is hard to beat.

How the card works

This card charges a $95 annual fee, which is much less than competing premium rewards cards that have annual fees around $450. But this card competes on value (the amount of cash back you can earn) rather than luxury (you will not get access to swanky Amex lounges, for example).

There is a 50,000-point intro bonus offer, available for qualifying customers. Customers must make at least $3,000 in purchases in the first three months of opening to earn the bonus. This is a feasible amount if you typically charge $1,000 a month.

The amount you earn depends upon your relationship with the bank. Your total relationship includes:

  • How much you have deposited in a checking and savings account. (But beware: interest rates are very low at BofA. Find the best savings account rates here).
  • How much you have invested at Merrill Lynch, which includes Merrill Edge (the self-directed brokerage account that has very competitive fees and commission).

As a cardholder you will automatically earn 2 points per dollar spent on travel and dining and 1.5 points per dollar spent on all other purchases. The more assets you have at BofA, the more points you can earn. Account holders must enroll in Bank of America’s Preferred Rewards program to benefit from these higher rewards levels. See the breakdown below.

We like the concept: BofA is trying to reward their most loyal customers with the best rewards.

The Bank of America® Premium Rewards® Credit Card is most beneficial to those who have $20,000 or more in a Bank of America account. This is a lot of cash for a savings or checking account with low interest rates. However, it’s possible to earn a higher interest rate from your Bank of America account if you roll over your IRA or 401(k) into a Merrill Edge® account. You can learn more here.

The table below shows your effective annual cash back rate depending on your monthly spending and relationship with Bank of America. This first table demonstrates the cash back rate earned for cardholders who are not big spenders in the bonus categories of travel and dining. Monthly spending was allocated at 40% toward travel and dining and 60% on all other purchases. The effective annual cash back rate deducts the annual fee, but does not factor in the sign-on bonus.

As you can see from the table, you won’t see significant return until you have at least a $50,000 relationship with Bank of America and spend over $2,000 a month. This will allow you to earn an effective annual cash back rate of over 2%. From this point on, you will start to see higher cash back earning potential.

Now if you’re a big spender in the bonus categories of travel and dining, you will see higher cash back earning potential at lower relationship levels. For the table below, monthly spending was allocated at 80% toward travel and dining and 20% on all other purchases. Again, the effective annual cash back rate deducts the annual fee, but does not factor in the sign-on bonus.

As you can see from this table, having at least a $20,000 relationship with Bank of America and spending over $3,000 a month allows you to earn an effective annual cash back rate of over 2%. From this point on, you will start to see substantial cash back earning potential.

In conclusion, the Bank of America® Premium Rewards® Credit Card is a good option if you are an affluent account holder at Bank of America and prefer to open a premium rewards credit card from the same bank as your savings account. If you plan on moving your IRA or 401(k) to Merrill Edge®, you will benefit from a higher interest rate.

How to qualify

To qualify for this card you will need excellent credit. The higher rewards levels for Bank of America checking, savings, and investment accounts with large amounts of money target affluent customers. Therefore, you will also need to have a steady job, which will show that you are responsible and can pay your bills.

What we like about the card

Large sign-on bonus

This card offers a 50,000-point sign-on bonus when you spend $3,000 in your first three months of account opening. This a reasonable amount of money to earn the large sign-on bonus, and lower than competing cards.

Reasonable annual fee

This card charges an annual fee that is significantly lower than competitors who can charge upward of $450 a year. The low annual fee allows you to enjoy more of the rewards you earn.

Bonus for Bank of America account holders

If you have a checking, savings, or investment account with Bank of America, you will benefit greatly from the additional points you earn. Higher tier points depend on the amount of money you have in your account and can increase your rewards potential significantly.

Unlimited higher rewards rates

You will benefit from the higher rewards rate for travel and dining without any caps. This means you don’t have to worry about hitting a predetermined dollar value and then being downgraded to a lower rewards rate.

What we don’t like about the card

Must be a Bank of America account holder for higher rewards rates

To earn more points per dollar spent you need to be a Bank of America account holder with a checking, savings, or investment account. If you don’t have an account, you will still earn the 2 points per dollar on travel and dining and 1.5 points per dollar on all other purchases, but can find a better deal with a flat-rate card such as the Citi® Double Cash.

Who the card is best for

This card benefits affluent Bank of America account holders with a checking, savings, or retirement account balance over $20,000 at the bank. If you fall in this category, your loyalty to Bank of America will be rewarded with the higher tiered rewards levels that allow for high rewards earning potential. In addition, this card has one of the lowest annual fees for premium rewards cards on the market and offers a large intro bonus.

Alternatives

There are multiple combinations of savings accounts and credit cards that you can use to maximize your savings. In the table below we compared the Citi® Double Cash Card, the Chase Sapphire ReserveSM card, and the Citi ThankYou® Premier card paired with a typical online bank savings account to the Bank of America® Premium Rewards® Credit Card.

Note that the Citi ThankYou® Premier card waives the annual fee in year one. Also, we listed the effective annual fee for the Chase Sapphire ReserveSM card; assuming you spend $300 in travel a month, the $450 annual fee would be an effective $150.

Savings Account

Typical
online bank

Typical
online bank

Typical
online bank

Bank of America

Credit Card

Citi® Double Cash

Citi® Double
Cash

Chase Sapphire Reserve®

Chase Sapphire
Reserve℠

Citi ThankYou®

Citi ThankYou®
Premier Card

Bank of America

Bank of America
Premium Rewards®

Average Deposit Balance

$100,000

$100,000

$100,000

$100,000

Average Monthly Card
Spending

$8,000

$8,000

$8,000

$8,000

Travel and Dining

$4,000

$4,000

$4,000

$4,000

Everything Else

$4,000

$4,000

$4,000

$4,000

Savings Account Interest
Rate

1.15%

1.15%

1.15%

0.06%*

Interest Earned on
Savings

$1,150

$1,150

$1,150

$60

Rewards Rate

Travel

2

3

3

3.5

Dining

2

3

2

3.5

Everything Else

2

1

1

2.6

Cash Back Earned

$1,920

$1,920

$1,680

$2,928

Bonus Offer

$0

$500

$500

$500

Annual Fee

$0

$150

$95

$95

YEAR 1: Cash Back +
Interest Earned + Bonus

$3,070

$3,420

$3,330

$3,393

YEAR 2: Cash Back +
Interest Earned

$3,070

$2,920

$2,735

$2,893

*.06% interest may be available if you roll over an IRA or 401(k) into a Merrill Edge® account.

From this table we can draw several conclusions:

  • The Citi® Double Cash Card paired with a typical online bank savings account will earn you the most money at year’s end.
  • A typical online bank earns you the most interest compared to the other savings accounts.
  • The Bank of America® Premium Rewards® Credit Card will earn you the most cash back, but coupled with the low interest rate from the Bank of America savings account, you will fall short of earning as much money at year’s end as Citi® Double Cash or Chase Sapphire ReserveSM cards paired with a typical online bank  savings account.

To sum it all up, if you want to earn the most money at year’s end, the best option would be the Citi® Double Cash Card paired with a typical online bank  savings account. The high interest rate that a typical online bank offers coupled with the card’s flat-rate cash back rewards are what make this the most profitable pairing. The Bank of America® Premium Rewards® Credit Card lures consumers in with the higher tier rewards levels for affluent account holders, but offers a low interest rate for those accounts that ultimately hinders your year-end earning potential. However, if you transfer your IRA or 401(k) to Merrill Edge, you will earn a higher interest rate than a typical Bank of America savings account and can make up some of the difference.

Here’s an overview of the alternative cards:

Citi® Double Cash Card – 18 month BT offer

Annual fee

$0*

Cashback Rate

1% when you buy, 1% when you pay

APR

14.49%-24.49%

Variable

The Citi® Double Cash Card is a flat-rate cash back card that will earn you a consistent cash back rate. You will earn 1% when you make a purchase and an additional 1% when you pay your bill. This card has no annual fee unlike the Bank of America® Premium Rewards® Credit Card or the other alternatives. Keep in mind this is a cash back card, so you will not be earning points that can be redeemed for travel. Cash back comes in the form of a statement credit, deposit, check, or gift card. Paired with a typical online bank savings account, this card will earn you the most money at the end of the year (excluding year one), beating the Bank of America® Premium Rewards® Credit Card by $177 in subsequent years. Refer to our chart above for a detailed comparison.

 Chase Sapphire Reserve<sup>SM</sup>

Annual fee

$450 For First Year

$450 Ongoing

Rewards

3X points on travel and dining, 1 point on everything else

APR

16.99%-23.99%

Variable

This card comes with several great perks that make it a stand-out favorite among frequent travelers. Each account anniversary year, Chase automatically gives you $300 in statement credits as reimbursement for travel purchases you make throughout the year on your card. This lowers the $450 annual fee to an effective $150. You will also benefit from a 50% rewards boost when you redeem for airfare, hotels, car rentals, and cruises through Chase Ultimate Rewards®. For example, 50,000 points are worth $750 toward travel. The Chase Sapphire ReserveSM is a great alternative if you are a frequent traveler and want a higher redemption value for your rewards.

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

Citi ThankYou® Premier Card

Annual fee

$95, waived for first 12 months*

Rewards

3X on travel, 2X on dining and entertainment, 1X on all other purchases

APR

15.49%-24.49%

Variable

This card is a good alternative if you want a card that offers a high rewards rate for travel, dining, and entertainment. If you’re not a Bank of America account holder, you will earn a higher rewards rate on travel and entertainment with the Citi ThankYou® Premier card. Citi also charges an annual fee, but this is waived the first year. Keep in mind that you will fall short of earning as much money at the end of the year with this card compared to the Bank of America® Premium Rewards® Credit Card (by approximately $63 in year one and $158 in subsequent years). Refer to our chart above for a detailed comparison.

FAQ

This card will be released in September 2017.

Yes, anyone can apply for this card. Keep in mind, an excellent credit score is needed to have the highest approval odds.

No, there are no limits to the amount of points you can earn in each category. That means you will consistently earn the higher rate for travel and dining, regardless how much you spend.

Alexandria White
Alexandria White |

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

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Building Credit, Credit Cards, Reviews

Discover it® Secured Card Review: Rebuild and Establish 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.

Secured cards are great if you have little to no credit history or have poor credit history. With proper credit behavior they are a great way to build credit. The Discover it® Secured card is an excellent secured card that lets you build credit while also earning cash back. There is no annual fee associated with this card, making it easier to put your money where it’s needed.

Discover it® Secured Card - No Annual Fee

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Rates & Fees

Discover it® Secured Card - No Annual Fee

Annual fee
$0
Minimum Deposit
$200
APR
23.99% APR

Variable

Credit required
bad-credit
Bad

How the card works

The Discover it® Secured card is meant to help you rebuild or establish credit. You need to make a $200 security deposit that will become your credit line. If you want a credit limit that is higher than $200, you will need to put down a larger security deposit.

Discover reviews your account monthly starting at eight months to see if you can be transitioned to an unsecured card. This is a feature that makes the Discover it® Secured card unique. If you have responsible credit management, you may benefit from this feature and be transitioned to an unsecured card. If moved to an unsecured card, you will receive your security deposit back. This is hassle free and another reason the Discover it® Secured card is a great option.

This card offers 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. This is a great bonus, but the main goal of a secured card is not to earn rewards, but to be responsible and build credit. Don’t let the prospect of cash back lead you to overspending. That will only defeat the purpose of this card.

To get the most benefit from your secured card, keep a low utilization rate and pay your statements in full and on time every month. Utilization is the amount of your total credit limit you use. It is calculated by dividing your statement balance by your available credit. A low utilization is not spending more than 20% of your credit limit. So if you have a credit limit of $200, that means don’t spend more than $40.

By following these two practices, you will begin to see your credit score rise. You can even build credit with $10 a month using a secured card.

How to qualify

To qualify for the Discover it® Secured card, you need to be at least 18 years old, have a Social Security number, U.S address, and U.S bank account and provide all the required information in the online application. Be sure to have your bank routing number and account number ready when you apply as they will be needed for the $200 security deposit. Don’t worry if your credit history is nonexistent or unfavorable — this card is great for people who are new to credit or are looking to rebuild credit.

What we like about the card

Earn cash back

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. This is a great added bonus that most secured cards do not offer. Discover will automatically match all of the cash back you earned at the end of your first year as a cardholder.

Automatic monthly reviews after 8 months

Discover takes the guessing out of wondering when you will qualify for an unsecured card by reviewing your account monthly starting at eight months. If you have responsible credit management across all of your credit cards, you may be transitioned to an unsecured card. This is hassle free and another reason the Discover it® Secured card is a great option.

Free FICO Score

It is important to monitor your credit score and each month you will receive your FICO Score for free. If you practice proper credit behavior, you will see your score increase.

What we don’t like about the card

High APR

This card, like most secured credit cards, has a high APR. If you pay your statement balance in full and on time every month, the APR will not matter (because no interest will be charged). And if you do that every month, your credit score will improve over time — making it cheaper to borrow money (if you need to) in the future.

Who the card is best for

This Discover it® Secured card is best for people looking to rebuild or establish credit. In addition to an easy transition to an unsecured card when the time is right, the Discover it® Secured card provides a cash back program and has no annual fee. By using this card coupled with proper credit behavior you can see a boost in your credit score.

Alternatives

If you want a smaller security deposit

Capital One® Secured Mastercard®

Annual fee

$0

Minimum Deposit

$49

APR

24.99% APR

Variable

The Capital One® Secured Mastercard is made for people who want to rebuild credit. There are lower security deposit options than the Discover it® Secured card, making it a good alternative if you can’t afford a large security deposit. However, it’s important to note that the lower security deposit is not guaranteed. This card also has no annual fee and offers your free credit score; however, there are no rewards. Just remember: A lower security deposit also means a lower credit limit.

An unsecured card from a credit union

Visa® Classic from Georgia's Own Credit Union

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

-

APR

12.99%-17.99%

Fair Variable

The Visa Classic from Georgia’s Own Credit Union offers a competitive APR that is lower than Discover. There is no annual fee associated with this card and no rewards, making this card strictly for rebuilding credit. Keep in mind you will need to join the credit union, and the application process is more complicated compared to Discover. This card is a good alternative if you prefer to have an unsecured card and don’t mind working with a credit union.

FAQ

No, your cash back does not expire as long as your account remains open.

If you pay your balance in full and close your credit card account, your security deposit will be refunded. This can take up to two billing cycles plus 10 days. Also, during Discover’s monthly automatic reviews of your credit card account starting at eight months, they will see if they can return your security deposit while you continue to enjoy your card benefits.

The maximum credit limit is $2,500. This will be determined by your income and ability to pay. Keep in mind your security deposit must equal your credit limit, so you will have to deposit $2,500 if approved for this credit limit.

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, Reviews, Small Business

Capital One® Spark® Classic for Business Review: Unlimited Cash Back for Small Business Owners

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.

The Capital One® Spark® Classic for Business is a good card for small business owners with average credit. This card has unlimited 1% cash back and no annual fee, making it a great way to earn rewards from everyday business purchases. If you’re a business owner who frequently travels abroad, there are also no foreign transaction fees, which can save you money compared to other cards.

Capital One® Spark® Classic for Business

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Capital One® Spark® Classic for Business

Annual fee
$0
Cashback Rate
1% on all spend
APR
23.99%

Variable

Credit required
fair-credit

Average

 

How the card works

The Capital One® Spark® Classic for Business offers unlimited 1% cash back on all purchases; there are no changing categories to keep track of each quarter. To redeem cash back, you can request a statement credit or a check. You can also set up automatic redemption either at a set time each calendar year or when a specific threshold ($25, $50, $100, or $200) has been reached. This can be done online at capitalone.com or by contacting the Rewards Center. Cash back can also be redeemed for credits on previous purchases, gift cards, and more.

This card also offers credit-building tools that help you monitor your credit score. Frequently monitoring your credit score will allow you to build and strengthen credit for your business as long as you practice responsible credit behavior.

Capital One offers quarterly and year-end summaries of your spending that break down what you purchased. This simplifies planning, budgeting, and taxes. Your purchase records are also easily downloadable to multiple formats such as Quicken®, QuickBooks™ and Excel®, making accounting easier for your small business.

How to qualify

This is a small business credit card. But to qualify, Capital One will consider both you and your business. That means your personal credit score matters — and you need to have average credit to qualify. Capital One defines average credit as someone who has defaulted on a loan in the past five years or has limited credit history (having a credit card or other credit for less than three years). Your business will need to have an average credit score and an EIN. You will also need to provide details regarding your business’s revenue. Remember — even though this is a business credit card, you will be personally liable for any charges on the card — even if your business goes bankrupt.

What we like about the card

No annual fee

You won’t pay an annual fee with this card. Many small business rewards cards charge a fee, making this card unique.

No foreign transaction fees

There are no fees when you travel abroad and use this card. This is beneficial if you travel for business frequently or only on occasion, as you will avoid foreign transaction fees that most other cards have.

Unlimited cash back

This card offers unlimited 1% cash back on all purchases. There is no minimum amount to redeem cash back. This is a great way to earn rewards on your business purchases.

Free employee cards

Employee cards come at no additional cost. No longer do you have the hassle of reimbursing employees when they use personal cards. You will also earn rewards points from their purchases. Just remember — any spending by an employee on a small business card will be your personal liability.

You don’t need perfect credit

Capital One is willing to work with people and companies that have less than perfect credit.

What we don’t like about the card

High APR

There is a high APR for this card. Make sure that you pay all of your bills on time and in full in order to ensure you will not rack up debt. Keeping a balance on your card will defeat any cash back you earn.

Who the card is best for

The Capital One® Spark® Classic for Business is best for small business owners with average credit who want to earn rewards with minimal additional fees. We recommend this card for business owners who travel abroad and plan on having multiple employee cards, as you will not be charged any fees. With unlimited 1% cash back and no annual fee, this card is a great option for business owners.

Alternatives

If you frequently spend on gas

Sam's Club Business MasterCard<sup>®</sup>

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

-

APR

15.90%-23.90%

The Sam’s Club Business MasterCard® offers 5% cash back on gas purchases for the first $6,000 in a year (except when purchased from other wholesalers) and 1% cash back on all other purchases. This is a great added bonus for business owners who frequently spend on gas. Keep in mind that there is a $5,000 cap on cash back rewards you can earn each calendar year. Once you hit this cap, you will not earn any more rewards that year.

If you need to finance a purchase

Owning a small business can be overwhelming, and at times, though not ideal, you may have to carry a balance on your credit card. If this is the case, The Blue BusinessSM Plus Credit Card from American Express offers competitive interest rates and a 0% introductory offer on purchases and balance transfers for 15 months (See Rates & Fees). This can help you save money while you pay off your purchase. In addition, there are rewards points you can earn on purchases. Terms Apply. Keep in mind you need excellent credit to apply for this card.

All information about The Blue BusinessSM Plus Credit Card from American Express has been collected independently by MagnifyMoney and has not been reviewed or provided by the issuer of this card.

FAQ

No, cash back does not expire as long as your account remains open.

No, you can redeem your cash back for any amount, anytime.

You can get your cash back upon request in the form of a statement credit or a check. You can also set up automatic redemption either at a set time each calendar year or when a specific threshold ($25, $50, $100, or $200) has been reached. Just go online to capitalone.com or contact the Rewards Center. You can also redeem for credits for previous purchases, gift cards, and more.

Alexandria White
Alexandria White |

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

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