What is the best credit card? There isn’t one—no single card is ideal for every cardholder, says Bottom Line Personal expert Ted Rossman of Bankrate.com. We asked Rossman to name today’s top credit cards for a range of different purposes and priorities…
Best balance transfer card: US Bank Shield Visa.* This card offers a best-in-sector 24-month 0% introductory rate on both balance transfers and new purchases. That’s two full years without interest payments—a huge savings for anyone carrying a hefty credit card balance in this era of relatively high interest rates. US Bank Shield Visa has a 5% balance-transfer fee, but that fee is money well-spent if the two interest-free years helps the cardholder pay down his/her debt.
Related: If you’re looking for a card that charges a low ongoing interest rate rather than a temporary 0% introductory rate, Houston Federal Credit Union’s Visa Prime Lock stands out—its interest rate matches the prime rate—as of August that was 7.5%—following a six-month 2.99% introductory rate. But: The card has a $50 annual fee, and membership in Houston Federal Credit Union is restricted to those who live in Houston or certain other parts of Texas or South Carolina and/or have family or other connections to those places.
Best straightforward cash-back card: Wells Fargo Active Cash. Several cards offer 2% cash back on all purchases, including this Wells Fargo card along with Citi Double Cash…US Bank Smartly Visa Signature…and Synchrony Premier World Mastercard. Any of these cards is a fine choice for consumers in search of a simple cash-back program that doesn’t require them to keep track of spending caps or categories. Wells Fargo Active Cash earns the top spot in this close race in part because it has the best sign-up bonus—new cardholders earn $200 for spending a modest $500 with the card in their first three months. Citi Double Cash offers an initial $200 bonus, too, but to earn it, cardholders must spend more—$1,500 in six months.
Also: There are a few credit cards that offer more than 2% cash back on all or virtually all purchases, but cardholders must jump through some hoops to earn those higher rates. Examples: Alliant Visa Signature Cashback Card offers 2.5% cash back on up to $10,000 in purchases per billing cycle, but cardholders must open a checking account with Alliant and follow other rules to qualify. Similarly, it’s possible to earn cash-back rates of up to 4% with US Bank Smartly Visa Signature, but only if the cardholder opens a particular type of savings account with US Bank and maintains a sizable average balance in it.
Best for category-specific cash back: Citi Custom Cash. Plenty of credit cards offer impressive cash-back rates in categories selected by the card issuer. Citi Custom Cash stands out because it offers 5% cash back in whichever of 10 spending categories the cardholder spends most during that billing period, and the cardholder doesn’t even need to choose that category in advance. Eligible categories include restaurants, gas stations, grocery stores, travel home improvement and more. The card’s 5% cash-back rate is capped at $500 in spending per billing period…all other purchases earn 1% cash back. New cardholders earn an additional $200 cash back by spending $1,500 on the card in their first six months.
Similar: Venmo Credit Card offers 3% back on the cardholder’s top spending category during each billing cycle…2% on the second largest…and 1% on everything else. That 3% cash-back rate obviously falls short of Citi Custom Cash’s 5%, but with the Venmo card, there are no spending caps, so it could be the better choice when spending four figures or more in a specific category during a billing period.
Best for spending on self-care, pet-care and much more: Wells Fargo Attune. This card offers a very credible 4% cash back on unlimited purchases in a quirky collection of spending categories that includes pet stores, pet services, spas, salons, public golf courses, tourist attractions, bicycle shops, marinas, RV rentals, sporting goods stores, tickets to live events, cable-TV providers, digital media, movie theaters, record stores, bookstores, antique shops, secondhand stores, public transit, EV charging stations, gym memberships, massage parlors, art-supply stores, camera stores, hobby-and-game shops, toy stores, sewing stores, gardening stores, florists, amusement parks, bowling alleys, campgrounds, trailer parks and much more. That’s an unusual list of spending categories, but if someone spends meaningful amounts at even a few of its 4% categories, this card could easily deserve a place in his wallet, particularly because many of Attune’s cash-back categories are areas that other rewards credit cards ignore. New cardholders also receive a $100 bonus for spending $500 on the card in the first three months. More great cards for people who spend a lot in specific categories…
Restaurants: Capital One Savor offers 3% cash back on restaurant, grocery, and some entertainment spending.
Gas: Sam’s Club Mastercard and Costco Anywhere Visa offer 5% and 4% back at the pump, respectively, and not just at those warehouse clubs’ gas stations. In fact, Costco offers 5% at its own pumps but 4% at others’. These elevated rewards are capped at $6,000 and $7,000 per year, respectively.
Groceries: American Express Blue Cash Preferred’s excellent 6% cash-back rate on supermarket spending can easily justify that card’s $95 annual fee. The 6% rate has a $6,000 annual grocery spending cap.
Best way to leverage a bank or investment or investment account into credit card rewards: Bank of America Customized Cash Rewards Card along with Bank of America “Preferred Rewards.” Cardholders earn an impressive 6% cash back on purchases in the spending category of their choice during their first year with this card—the list of eligible categories includes gas, online shopping, dining, travel, pharmacies, home improvement/furnishings and more. The card also offers 2% back at grocery stores and wholesale clubs and 1% on everything else. But: No more than $2,500 in spending per quarter qualifies for the cash-back rates above 1%, and that 6% rate drops to 3% after year one. Add it up, and this is a good-but-not elite cash-back program. What makes it stand out: TheBank of America program called “Preferred Rewards”—if the cardholder has $20,000 or more in Bank of America and/or Merrill Lynch accounts, his credit card rewards increase by 25%, 50% or 75%, depending on that cardholders’ account balances. This isn’t the only program that boosts credit card rewards for cardholders who have money in bank accounts offered by the card issuer, but with Preferred Rewards, bank accounts aren’t the only accounts that qualify—Merrill Lynch investment accounts count, too, including IRAs. Preferred Rewards can be used with a wide range of Bank of America credit cards, not only Customized Cash Rewards.
Best modest-annual-fee travel card: Capital One Venture Rewards. New cardholders earn 75,000 miles by spending $4,000 on this card in their first three months—those miles are worth the equivalent of $750 when used to offset just about any travel purchases. Cardholders also earn five miles for every dollar spent on hotels, vacation rentals and rental cars through Capital One travel…and two miles per dollar on everything else. Miles earned in this program can be redeemed on any travel purchase—unlike with many travel cards, cardholders are not restricted to a specific airline or hotel chain. Cardholders also receive a credit of up to $120 toward Global Entry or TSA PreCheck enrollment—a perk that could on its own cover this card’s $95 annual fee.
Alternative: Chase Sapphire Preferred and Citi Strata Premier are both worthy competitors to Venture Rewards at the $95 annual fee level, but neither currently match Venture Rewards’ new cardholder bonus. Sapphire Preferred currently has a very similar sign-up bonus to the Venture.
If you’re willing to pay a higher annual fee in exchange for numerous additional perks, such as airport lounge access, top options include Capital One Venture X Rewards ($395 annual fee)…Chase Sapphire Reserve ($795) and American Express Platinum ($695).
Best travel credit card linked to a specific travel chain: Marriott Bonvoy Boundless. New cardholders can earn three free nights at Marriott hotels by spending $3,000 on this card within the first three months. Three nights at a nice hotel could easily cost upward of $1,000, so this bonus alone justifies the card’s $95 annual fee many times over. Cardholders receive an additional one free night stay in each subsequent year with this card, as well as automatic Silver Elite Status in the chain’s loyalty program, plus other points and perks.
*Cards cited in this article have no annual fee unless noted. Credit card terms and promotions can change with little notice, so confirm that card offers are still appealing before applying.Bottom Line Personal interviewed Ted Rossman, senior industry analyst specializing in credit cards, credit scores and other personal finance topics at Bankrate.com
