Want to Earn Some Extra Money?
- Survey Junkie: Earn up to $50 per survey with one of the highest-paying survey sites on the web. Join Survey Junkie Now
- Swagbucks: Make money watching videos, taking surveys, shopping online and more. Join Swagbucks Now & Get a $5 Bonus
- LifePoints: Quickly becomming one of the best survey sites out there. Earn up to $10 per survey in a short time. Join LifePoints Now For a 10 Point Bonus
- MobileXpression: Earn free money (passive income) just by leaving an app installed on your phone. Join MobileXpression Now & Get a Free Gift Card in One Week
Most people have always heard how bad credit cards can be and how easily your spending can become unmanageable by using them.
But, what most people don’t know is that when you use your credit card responsibly and choose the right card for your lifestyle, you can actually save a ton of money.
Perhaps you could even make some, too.
Not just a few extra bucks here and there, either, we’re talking potentially thousands of dollars that you could be regularly missing out on!
Credit Cards – Should You Have One?
When used responsibly, credit cards can be a fantastic way to reinforce your financial standing.
While credit cards have had a reputation in the past of encouraging over-spending, it’s more likely that they will help to improve your lifestyle overall.
In fact, money-savvy credit cardholders can save money by using a credit card.
They can also make extra money with their cards.
Whether you’re new to the world of frugal living or are looking for some new tricks, a credit card can be a fantastic way to make or save some extra cash.
Between sign-on bonuses, cash-back incentives, points and more, there is no shortage of ways to make your credit card work for you.
We’ve found the top 20 best credit cards that’ll help save you money.
Listed in no particular order, these cards are designed to help you enjoy financial freedom.
The Top 20 Best Credit Cards to Save You Money
1. Discover It Balance Transfer Card
The Discover It Balance Transfer Card will match all of the cashback that you’ve earned at the end of your first year.
This is done automatically and requires no signing up.
You’ll earn 5% cashback at a variety of places each quarter.
These places include Amazon, restaurants, gas stations, grocery stores and more.
Additionally, you’ll earn an unlimited 1% cashback on all other purchases.
These rewards never expire, and you can redeem your cashback at any time for any amount.
There is no annual fee for using this card and maintaining your account.
The customer service center is 100% US-based, and you can receive a free Credit Scorecard and FICO Credit Score, as well as an alert if your social security number is found on any Dark Web sites.
There is a 0% APR for the first six months from the date that your account is opened, and following that the APR rate is between 13.49% and 24.49%.
2. BankAmericard Credit Card
The BankAmericard has an introductory APR of 0% for 18 billing cycles worth of purchases as well as for any balance transfers made within the first 60 days.
Once that introductory period ends, a variable APR of 14.49% to 24.49% will apply.
Additionally, any balance transfers will have a fee of 3%, or a minimum of 10 dollars, whichever is greater.
There’s no annual fee or penalty APR.
Late payments won’t automatically raise your APR, and you’ll be able to access your FICO Score from a mobile banking app.
3. HSBC Gold Mastercard
This card has no rewards, but that doesn’t mean it can’t help you save money.
There’s no annual fee with the HSBC Gold Mastercard, and there’s also no foreign transaction fee.
There’s a 0% introductory APR on credit card purchases with this card or the first 18 months that your account is open.
After the introductory period ends, a variable APR of 12.49% to 20.49% will apply.
There is a $0 liability or unauthorized purchases and the card comes with late fee waivers and no penalty APR.
4. Chase Freedom Card
The Chase Freedom Card is the best for 5% back on rotating categories.
You’ll earn 5% cashback on up to $1,500 in combined purchases in bonus categories during each quarter after activation.
You’ll also get unlimited 1% cashback on all other purchases automatically.
There’s no annual fee, but there is a foreign transaction fee you should keep in mind.
Having this card gives you access to Chase’s Ultimate Rewards website, where you can earn even more cashback.
You’ll also be able to earn a $150 bonus after you spend $500 on purchases during your first three months after activating your account.
Your cashback rewards will not expire as long as your account is open and active, and there’s no minimum to redeem your cash back rewards.
5. Capital One Quicksilver Cash Rewards Card
Capital One has many fantastic credit cards that are made to help you save and even make money.
The Quicksilver Cash Rewards Card has a one-time cash bonus of $150 after you spend $500 on purchases within the first three months of activation of your account.
There are no rotating categories or sign-ups necessary to earn cash rewards, and the cash back won’t expire for the lifetime of your account.
There’s no limit to how much you can earn, and you can earn unlimited 1.5% cash back on every purchase.
It has a 0% introductory APR on purchases for the first 15 months, and then a variable APR of 15.74% to 25.74% afterward.
There’s a 3% fee on any amount transferred within your first 15 months, as well.
6. Capital One Venture Rewards Credit Card
Another of the great Capital One cards is the Venture Rewards Credit Card.
This is a great card to have to save you money if you’re a fan of traveling or do so frequently.
If you spend $3,000 on purchases within your first three months of having an account with this card, you’ll get a one-time bonus of 50,000 miles, which is equal to about $500 in travel.
You’ll also earn two times the miles on everyday purchases, and up to $100 application fee credit for Global Entry or TSA PreCheck.
There are no blackout dates, you can fly any airline and stay at any hotel whenever you want.
Your miles won’t expire for the life of your account, and there is no limit to how many miles you can accumulate and earn.
You’ll also be able to transfer your miles to over a dozen leading travel loyalty programs, giving you plenty of flexibility.
There are no foreign transaction fees, which is great for when you’re traveling with your accumulated points.
There’s no introductory annual fee during your first year, but it will cost $95 annually after that.
7. Discover It Cash Back Card
Discover has several great cards and options no matter what your credit score looks like.
Discover will match any and all of the cashback that you’ve earned at the end of your first year automatically, with no limit to how much is matched.
There’s no annual fee with this card, and any of your rewards can be used at Amazon.com’s checkout.
You’ll earn 5% cashback at gas stations, restaurants, Amazon, grocery stores and more up to a quarterly maximum.
Additionally, you’ll earn an automatic, unlimited 1% cashback on all other purchases.
8. Wells Fargo Propel American Express Card
You’ll need a 690 or better credit score for this card, but it’s well worth it.
The Wells Fargo Propel American Express Card has no annual fees or foreign currency conversion fees.
Additionally, when you spend $3,000 in purchases during your first three months, you’ll receive 30,000 bonus points.
That’s a cash redemption value of $300.
You’ll earn three times the points on food, whether you eat out or order in.
You’ll also earn three times the points on flights, car rentals, hotels, rideshares, transit, gas stations, and streaming services with this card.
9. The Blue Business Plus Credit Card from American Express
If you’re a business owner or regularly have business-related expenses, this is the best card for your needs.
It’ll help you save money while making money.
There’s a 0% introductory APR on purchases and balance transfers for the first 12 months.
After that, there is a variable APR rate that’s based on your creditworthiness and some other applicable factors.
You’ll get rewarded with twice the membership rewards points on everyday business purchases such as client dinners, office supplies, and more.
The double points will be applied to the first $50,000 in purchases that you make for the year, and you’ll receive a point per dollar afterward.
With the card’s Expanded Buying Power, you’ll be able to make purchases even beyond your credit limit, so your business will never have to do without.
This is not a limitless feature – the amount you can spend beyond your limit is determined by your payment history, card use, credit record, and other factors.
10. Capital One Platinum Credit Card
If you need to build your credit up to an above-average level, the Capital One Platinum Credit Card is perfect to suit those needs.
There’s no annual fee that needs to be paid, and you’ll have access to your account 24 hours a day, 7 days a week.
You’ll get access to a higher line of credit after making your first five monthly payments on time, which will provide you with more opportunities to spend as well as save.
There’s excellent fraud coverage if your card is ever lost or stolen.
You can use the online banking website or mobile app to monitor your account at any time.
In addition, you can pay your balance with checks by mail, at a local branch, or online with no fees.
You can also choose your monthly due date, so you won’t have to worry about overlapping bills.
This card is made to help you build your credit and promote responsible credit card use.
11. Discover It Secured Card
The best way to build up your credit is often said to be by using a secured credit card, and the Discover It Secured Card is one of the best to use for that purpose.
There’s no annual fee for this card, but you will have to establish the credit line by paying a refundable security deposit of at least $200 once you’re approved.
This card will earn you free cashback and will help you build your credit score and reputation with all three of the major credit bureaus.
Automatic reviews will start at eight months into your account’s activation and use.
These reviews are used to see if you can be transitioned to an unsecured line of credit, at which point your deposit would be returned to you.
You’ll receive 2% cashback at gas stations and restaurants for up to $1,000 in combined purchases each quarter.
Additionally, you’ll earn an unlimited 1% cashback on all other types of purchases.
This card also comes with an introductory offer, which is that Discover will match all of the cashback you’ve earned at the end of your first year.
12. Discover It Student Cash Back Card
Students often have to live frugally, and this cashback card will help you to do that.
Discover will match all of the cashback you’ve earned throughout the year at the end of your first year automatically, with no limit to how much is matched and no need to sign up.
You’ll earn 5% cashback at gas stations, Amazon.com, restaurants, and more up to a quarterly maximum.
You’ll also receive 1% cashback on all other purchases you make.
With no annual fee, no late fee on your first late payment, and no APR change for paying late, this is an extraordinarily forgiving card for any student.
Plus, there are rewards for maintaining good grades – you’ll receive a $20 statement credit each school year that your GPA is 3.0 or higher, for up to five years after activation.
Discover also offers the ability to freeze the account or reactivate it, which will prevent new purchases, cash advances, and balance transfers in the event that anything happens to your card.
13. U.S. Bank Visa Platinum Card
The U.S. Bank Visa Platinum Card is a great option for paying down your bills over time without accruing unneeded interest.
For the first 18 months, you’ll have a 0% introductory APR.
This card is great for spreading out your payments, but not ideal for racking up any points or getting cashback incentives.
But, being able to spread out your bills can help you avoid overage or late fees, which can help you to save money overall.
With no annual fee, you can spend without any worry, just make sure you pay down your debts to manageable levels before the 19th month, where a variable APR will kick in.
Otherwise, another great per of this card is the cell phone protection program, which offers $600 of coverage on broken or stolen phones.
This protection plan works for up to two claims per year and only has a $25 deductible.
14. Capital One SavorOne Cash Rewards Card
One of the best rewards cards is the Capital One SavorOne Cash Rewards Card.
This card primarily focuses on average, everyday purchases, but has a unique incentive structure that allows you to focus on larger purchases, as well.
If you spend $500 during the first 3 months that the card is activated, you’ll redeem a $150 cash reward.
This is a low, achievable threshold that most users can reach easily.
You’ll get 3% cashback on dining and entertainment, 2% back on groceries, and 1% on every other purchase.
There’s no maximum for cashback rewards, so you can earn as much as you want.
This card also offers a 15-month introductory APR rate of 0%.
15. Wells Fargo Cash Wise Visa Card
This Cash Wise Visa Card from Wells Fargo has a high rate of return and no annual fee, so it’s great for turning what you spend into extra money made.
Holders of this card enjoy 1.5% cashback on all purchases, no matter where or when they’re made.
There’s also an introductory bonus for spending, where you will receive an extra $150 cash reward for spending $500 during the first three months of activation.
There’s also a 0% APR rate during the one-year introductory period, though that will go up to a variable APR rate of 16.24% to 28.24% after that year is up.
This card also offers $600 of cell phone protection with a $25 deductible.
16. Uber Visa Card
The Uber Visa Card is hands-down one of the best available cashback credit cards out there.
This is especially for the average consumer.
Holders of this card can get 2% cashback when they use the card to pay for online purchases.
This includes purchases made on Amazon, Walmart, Best Buy, and more, and also includes streaming services like Pandora, HBO Now, and Netflix.
It’s also great for travelers.
For airfare and hotels, for example, you will get 3% cashback, and for restaurants and UberEats you can get 4% cashback.
If you spend $500 during the first three months of activation, you’ll receive $100.
Balance transfers and cash advances do not count toward the $500 threshold.
Uber Visa cardholders that have spent $5,000 or more on their card per year receive up to $50 in credit for online streaming services.
This credit will retroactively apply to any subscriptions that Barclays identifies from the previous year-long period and will be applied to the account.
Additionally, this card comes with phone protection of up to $600 with a $25 deductible.
17. Citi Simplicity Card
This card comes with an introductory APR of 0% for 21-months for balance transfers and for 12 months on purchases.
After the introductory period, your APR will be a variable between 16.24% and 26.24%, depending on your creditworthiness.
This kind of introductory offer makes it one of the best and most competitive for balance transfer purposes.
This is a great card for anyone hoping to get their credit card debt and spending under control.
It will help you lower your interest payments, and can even save you money as you pay down other credit card debts when you transfer the balance.
There are no late fees or penalty APRs with this card, but late payments may still cause damage to your credit score if they’re repetitive.
However, it should be noted that this is not a rewards card.
18. Citi Double Cash Card
If you want a great card that has all-around benefits, the Citi Double Cash Card might be perfect for you. Its reward structure is relatively simple.
You receive 1% cashback on all purchases and an additional 1% as you pay, totaling up to 2% cashback on all of your purchases.
You can use this card for every purchase that you make regularly without worrying about rotating categories.
Currently, there’s no sign-up bonus for this card.
Additionally, if you like to travel, this may not be the best option for foreign use as there is a foreign transaction fee of 3%.
19. Amazon Prime Rewards Visa Signature Card
If you have Amazon Prime or are considering getting it, this is a great card to have, especially if you frequently make online purchases through Amazon’s website or app.
This card offers a 5% rewards rate on all Amazon purchases.
You also get a $70 gift card once you’re approved for the signature card.
Both the rewards rate and the gift card are great incentives to check this card out.
Don’t get this card mixed up with the Amazon Prime Store credit card, which is issued by Synchrony Bank.
That card also features 5% back through Amazon, but you can only use it on Amazon – the Rewards Visa Signature Card can be used anywhere Visa is accepted.
For all purchases that aren’t made on Amazon, you will receive a 2% rewards rate.
If you’re not a Prime member, you can still get impressive benefits from the Amazon Rewards Card.
20. American Express Blue Cash Everyday Card
This is another versatile card from American Express.
The Blue Cash Everyday card is exactly as it sounds.
For the first 15 months, the introductory APR of this card is 0% on purchases and balance transfers.
After that, a variable rate is applied, between 14.49% and 25.49% depending on your creditworthiness and other factors.
This card provides 3% cashback at U.S. grocery stores, for a maximum of $6,000 annually and then dropping to 1%.
You’ll also be able to enjoy a 2% cashback rate at gas stations and select department stores, and 1% cash back on other purchases.
Cash back rewards are received as reward dollars that can be redeemed for gift cards, statement credits, and merchandise.
There’s no annual fee for this card, either.
How Credit Cards Can Save Money
Many people don’t consider credit cards to be a way to save money, but they are.
And they are capable of saving you money or even making you extra money in several different ways, depending on the card.
Some of those ways can be found here, but let’s recap.
Cash-back rewards cards typically offer a return of anywhere from 1% to 5% on any number of purchases.
Typically, these purchases vary and can include many different types of purchases.
You can earn cashback from gas stations, restaurants, online stores, department stores, grocery stores, and more.
Some cards are tailored to specific retailers or companies and may offer an even larger incentive to buy from that particular place.
Bonuses are great, especially when they’re essentially free money.
Between strategic spending to earn bonus cash, to taking advantage of deals to earn miles or points for travel, you can save an impressive amount of money on everything from groceries to travel expenses.
Miles and points can be accumulated without actively flying or spending extra money, too.
Some credit cards come with extra offers that include incentives for travel, so keep your eye out for those kinds of deals.
Additionally, if you’re looking to earn extra cash by spending a certain amount of money within a timeframe, you can buy gift cards or money orders.
Your net profit may go down since debit gift cards and money orders both often come with their own fees, but you’ll still come out ahead overall.
Increased Credit Score, Which Saves on Future Loans
One of the best benefits of using a credit card is that your credit score will increase.
This is only true so long as you make your payments on time and don’t grossly go over your available credit limit with your purchases.
Each time you apply for a credit card or loan, it affects your credit, so use a free monitoring service to have an idea of what you can apply for and within what limits.
Additionally, your score can affect what you pay for services like car insurance.
Your score may also affect your likelihood to work for certain institutions, such as banks.
It will also impact your interest rates and APR, as well as your payments to repay loans or cover the costs of your credit payments each month.
Automatic Extended Warranties
Many people have taken advantage of extended warranties on products they’ve purchased with their credit cards.
You can save on repair or replacement costs for major appliances, cell phones, and more if you purchased those items with your credit card.
So long as the issuing credit card company has a protection policy or warranty on the electronic or appliance, you can enjoy extra coverage for repair or replacement costs.
Make sure to double-check your card before committing to a purchase, and if you’re unsure of the coverage options, call your company’s customer service center.
Extended warranties may also help to cover you in the event of theft of the covered items.
In the same vein as the automatic extended warranties that some credit cards offer, you should remember to look for price protection through your credit card.
Price protection will refund the difference in price that you spent between retailers.
So, if you find that a new washer you bought with your credit card is at another store for a lower price, you can recoup the price differential.
There is usually a limit on this kind of protection.
You must prove the price difference on the product within a certain amount of time.
Keep this in mind while you’re spending and you could save a lot of money.
Returns are also typically guaranteed with this kind of protection.
Cash Back Rewards, Point Redemption, and Cashing In
One of the biggest things that people look for when searching for the best credit card to save them money is their reward system, including the process of redeeming points or cashing in.
Some credit card issuers will automatically credit your account with your accumulated points, rewards, cashback, or miles.
For others, you will need to log into your account from your smartphone or computer and activate your rewards yourself.
Redeeming miles or points for travel may include booking a flight, hotel stay, or another kind of travel arrangement.
Every card and reward system is different, so make sure that you investigate to see which options are most convenient and beneficial for you.
Things to Consider When Choosing A New Credit Card
Along with the above-listed ways to save money that credit cards can offer, you should also consider the following factors when choosing your new credit card.
Some of these factors will also help you to save money, while others are geared more toward helping you manage your spending and costs.
Spending Limit and Current Balance
Your available spending limit for your credit card is something you should always be aware of.
Your spending limit is the amount of money you can charge to your credit card safely and within reason.
These limits can vary drastically based on your payment history, credit score, and current accumulated debts.
Even if your card comes with a high credit limit, it’s not always a good idea to spend all of that money or to try to push that limit.
You may wind up with a monthly statement that’s way out of your budget, and that’s when you can develop some serious debt problems if you aren’t careful.
APR and Interest
You’ve seen the abbreviation APR all throughout this article but may not know what it stands for.
More importantly, you may not know what it means when it comes to your credit card use or your efforts to save money.
The APR is the annual percentage rate on your line of credit.
The APR is started as the yearly rate for interest on your purchases.
Most cards will allow you to avoid paying the interest on purchases so long as you pay your balance in full each month by the agreed-upon due date.
Most of the cards on our list here have a 0% APR introductory period when you get a new credit card, though the duration of these periods may vary.
Annual fees aren’t uncommon when it comes to credit cards.
Not all credit cards have annual fees, of course, and those ones are the best for helping you to save money simply because you won’t be spending money to use the card.
Annual fees can span from as low as nothing to several hundred dollars, so always check before you apply for a card.
If you do get a credit card that has an annual fee, make sure that the rewards you earn exceed the cost of the fee.
Introductory rates are low-interest rates, sometimes as low as 0%.
These rates apply to your balance during the first few months following the activation of your line of credit.
The introductory rates might apply to only certain types of purchases and balances.
These may include balance transfers or general purchases made with your credit card.
It should be noted that usually, introductory rates for cash advances are rare.
By law, introductory rates must last for at least the first six months of your card’s activation, but some credit cards will offer it for longer periods.
What You’ll Use it For
There are many different uses for your credit card.
If you like to travel, you’ll likely want a credit card focused on saving you money on airfare, transit tickets and costs, hotel stays, and more.
If you want a card for everyday purchases, you may want something with cashback rewards that can apply to regular purchases such as gas and groceries.
Students and cardholders with low, damaged, or unestablished credit would benefit most from a secured card.
Knowing what kind of card you need will help immensely when choosing what kind of credit card you want to apply for.
Foreign Transaction Fees
If you plan on using your credit card to travel out of the country, foreign transaction fees should be something you pay attention to when choosing a credit card.
Foreign transaction fees may also be referred to as international transaction fees.
These fees are charged to a cardholder when items are purchased out of the cardholder’s country of origin, or when an overseas bank has to process a transaction.
This does sometimes also apply to online purchases.
This fee covers the costs of the bank having to convert your money from your country’s standard from the foreign country’s standard form of currency.
Keep in mind that some credit card companies may charge additional fees to withdraw from ATMs in foreign countries, or to transfer balances to the foreign country’s currency.
Rewards and Sign-Up Bonuses
We cannot stress the benefits of rewards and sign-up bonuses and incentives enough.
These are some of the best ways to not only save money with your credit card, but make it as well.
Find rewards programs that already fit into your spending habits to make the most of these incentives.
If you frequently shop online, some cards will give you points or cashback for online purchases.
Travel a lot or eat out frequently?
There are cards for that, too.
If you want a card that you can use for every kind of purchase you make regularly, there are a plethora of credit cards out there that you could easily use for everyday use.
Use them while earning rewards, accumulating points, and even earning discounts.
Benefits of Having a Credit Card
Aside from the sometimes-immediate gratification of cashback rewards and spending incentives, credit cards actually have a lot of perks.
These are things that you might not initially think of when you think of saving money, but they can definitely help.
Building Credit History and Improving Your Credit Score
This may be a more obvious benefit of having a credit card and keeping it in good standing, but you may not fully understand the implications of what that means.
Most people don’t – it’s often not explained outright.
Having great credit history will make it easier to get loans for homes, vehicles, and personal use, and will make your interest rates lower.
In theory, the longer you have an established credit history, the more accurately lenders can determine your level of loan risk when lending to you.
The better your credit history looks, the more they’ll be willing to lend and at lowered rates.
Some things that are taken into account when determining your creditworthiness are:
- Credit history
- Payment history
- Your current unpaid debts including medical bills, student loans, and more
- Your credit utilization ratio
- Your mix of credit accounts, such as cards, loans, and bills
- How much new credit you’ve applied for
Your credit utilization ratio is how much of your available credit you use at any given time.
Typically, your credit utilization ratio and payment history have a larger impact on your FICO score than the age of your credit accounts.
Having a long history of on-time, consistent payments and low utilization ratio shows that you can responsibly manage your lines of credit and are a good or positive risk for lenders.
This means, essentially, that you are more likely to be approved for loans and credit cards.
Better credit cards and increased lines of credit mean that you can spend what you want or need to when you need to, and typically the better your credit, the more benefits your card can offer.
When you use your credit card, you do have to pay that money back.
If you need payment history, you can use the introductory 0% APR period available with most cards to draw out the payments outlined in your statement if you want.
This is because you won’t be charged additional interest in most cases.
If you’re passed your introductory period, though, it’s best to pay the full balance of your card every time you receive a statement.
This is a common tactic for people that are trying to establish or rebuild their credit.
Tracking Spending Habits
A great way to save money is to first identify how much you spend and how you spend it.
Better budgeting is essential to effectively and accurately save money where it matters.
A great way to track your spending habits is to frequently look at your credit card statements.
These statements are, essentially, a built-in expense tracker.
All of your purchases are recorded as they’re made and processed.
This includes where and when the money was spent, how much was spent, and how often you’re spending.
Some credit card companies will track these factors and keep your spending records around for years.
These records can be especially helpful during tax season, and will save you time and effort when you’re filing your taxes since you won’t have to hunt down all of your receipts – they’ll all be in one place.
Since you can use your credit card for everything from daily purchases to business expenses to charity contributions, having your spending habits automatically tracked and recorded can be extraordinarily useful.
Protection Against Fraud
Fraudulent charges, scams, and stolen identities can cost you hundreds or thousands of dollars if left unchecked with no protective measures in place.
Effective protection against fraud is one of the biggest advantages that credit cards have over debit cards.
If your credit card is ever physically stolen or misplaced, or the card information is phished online, you’ll be protected.
Even if the thief starts making purchases immediately, you won’t lose very much because credit card charges aren’t withdrawn immediately.
But that doesn’t mean you should waste time before reporting the card or information as missing.
The sooner you notify your credit card company of the theft (or potential theft, if you just misplaced it), the sooner they can put a hold on your card and account to investigate the situation.
You will not be held liable for any purchases made during the investigation.
This is due to federal laws that protect you from losing too much money due to fraud or theft.
At most, you may be liable for about $50.
If you report the card as missing or stolen before any purchases are made, or if your credit card company has a zero-liability fraud policy, you won’t actually lose any money at all.
This means that you won’t have to worry about paying for charges you never made.
You don’t have to worry about replacement card fees, account freezing fees, overage fees, or anything else that may have been accrued during the fraud incident.
This not only saves your money and protects it, but saves you time and stress as well.
What is a FICO Score and Why Does it Matter?
Your FICO Score is how lenders figure out how likely you are to repay a loan or credit line.
Depending on your FICO Score, you may qualify for a higher line of credit with a lower interest rate, or may not qualify for a loan or credit line at all.
Your FICO Score is based on your available credit reports, which include your credit history, debt history, and payment history.
This means that you can directly influence your score for the better by making good credit choices, paying off your debts and bills on time, and not carrying multiple or extensive lines of credit.
Having a high credit score will allow you to take out loans and credit cards with lower interest rates.
A higher FICO Credit Score means that when you need a home loan to buy or repair your home, you can get one without much hassle.
This applies to other loan types, like automotive loans and personal or business loans, as well.
It also means you can get credit cards with the best rates, perks, and rewards that will ultimately help you to save money.
Types of Credit Cards
There are many different types of credit cards to choose from.
Each type has its own benefits, and not all of them will save you money in the same ways or amounts.
It’s important to know what kind of credit cards there are so you can better determine what kind will work best with your lifestyle and save or make you the most money.
Rewards cards are cards that basically pay you back for a portion of what you spend.
These cashbacks can be in the form of cash, points, or miles, depending on the kind of card you have and the credit card company’s rewards program.
There are four distinct types of rewards cards, and some may overlap with one another depending on what you’re looking for.
- Cash-Back Credit Cards: These cards will give you cashback when you make certain purchases or when you use them at certain businesses.
You can use this cash or credit to reduce your balance directly, but you can also have this money deposited into a bank account.
You may also have it sent to you as a cashable check.
- Airline Credit Cards: Airline credit cards tend to carry the name of a specific airline that you can use them with or for.
Using these cards allows you to earn miles.
The miles you accumulate can be used for free flights or upgrades on the named airline.
While these types of cards generally don’t offer much flexibility in how you can use their rewards, they provide a lot of value through exclusive perks.
Some of these include free checked bags, airport lounge access, priority boarding, and more.
- General Travel Cards: A credit card made for general travel will let you accumulate points that you can use to pay for all kinds of travel.
These rewards can be used on airplanes, trains, hotels, and more.
For travel purposes, these are the most flexible credit cards. You should make sure you check their list of benefits and perks.
While many consumers can likely benefit from these kinds of travel cards, some may feel that the airline cards will work better for their specific needs.
This can be especially true for business-related travels, whereas general travel cards may best be suited for leisure or vacation-based traveling expenses.
- Hotel Credit Cards: Like the airline credit cards, hotel credit cards are usually tied to a specific hotel group.
Points earned can be redeemed for hotel stays within that hotel group.
The perks can be fantastic, including free nights every year, automatic room upgrades, elite status, and more.
If you travel a lot and find yourself spending a lot of money on sleeping arrangements, these can be a great card for you to have.
Balance Transfer Cards
Balance transfer cards are great.
These cards will let you move debt from a high-interest credit line or card onto the new, lower-interest card.
Usually, you’ll have a year or more at a 0% interest rate to pay that debt off.
You should keep in mind that you may have to pay a transfer fee with some cards.
Typically, however, you’ll save more money even with the fee, as the savings you’ll have when accounting for the interest will be substantial.
Low-Interest and 0% Credit Cards
If you frequently find yourself carrying debts from month to month, these cards may be the best solution to help you get out of that situation.
0% credit cards give new cardholders a year or more of having no interest on purchases.
This makes them the most suitable for large expenses.
Even if these cards don’t come with a 0% period, they typically have a low ongoing rate that you can benefit from in the long-term.
They can ultimately help you reign in your month-to-month debt and get back in control of your spending each month.
Small Business Credit Cards
If you’re a small business owner or a budding entrepreneur, these kinds of credit cards may be just what you need to get your business off the ground.
The rewards and perks of these cards are often geared primarily toward businesses.
These might include tools to track expenses, payroll software, business cards for employees, and more.
They are not the same as corporate cards, however.
When you apply for a small business credit card, your creditworthiness is determined by your own personal credit score.
This is different for large, corporate business cards, which will use the business credit file to determine credit limits and rates.
Credit Cards to Build Your Credit
You may have noticed that the cards with the lowest interest rates, the best rewards, and longest 0% periods are only really available to those with good or excellent credit scores.
That’s because the lenders of these cards see a high credit score as a good risk to take for investment and loaning.
If you’re trying to build your credit or rebuild it after some unintentional mishaps, then you’ll want to apply for cards that will help to establish or fix your credit score before applying to any other kind of credit line.
The cards intended to help get your credit in good or excellent standing are often designed by banks.
They’re specifically tailored to help improve your credit.
Using these kinds of cards responsibly can go a long way to getting you a better credit rating.
- Credit Cards for Bad Credit: If your FICO credit score is below the 630-point threshold, then you’re considered to have bad credit.
What this means is that the best option available to help fix or establish your credit will be a secured credit card.
Secured credit cards require a deposit, but it is completely refundable when you upgrade your card after establishing a credit history.
The deposit will also be refunded if you choose to close the card, as long as you do so with the card being in good standing.
You can also find unsecured credit cards for bad credit, but usually, they will have higher fees.
- Credit Cards for Fair Credit: If you have what is considered to be fair credit, your FICO credit score is likely in the range of 630 and 690, roughly.
This scoring range identifies you as having average credit.
That means that you won’t get the best rates in the world, but you also won’t usually be outright denied a lower line of credit and can more easily manage an unsecured credit card.
There are many options on our list above that will encourage score growth while still saving you money.
- Secured Credit Cards: Secured credit cards were mentioned above.
They require a fully-refundable security deposit, which typically ranges from $50 to $300, depending on the credit card company.
Your deposit will determine your credit limit for the card.
The more you deposit upfront, the higher your credit limit will be.
That’s because your deposit is primarily in place to protect the lender if you do not or cannot pay your bill on time.
People with a low credit score or no credit history can often get these cards to establish or build credit.
However, some secured cards may reject people with heavily-damaged credit.
Student Credit Cards
A student credit card is designed with financially-vulnerable students in mind.
Most students are young adults that have no credit history to speak of, and these cards can help to develop and improve credit scores.
Additionally, they may help you to pay off student loan debts.
Applications often take extra factors into consideration, such as that students are less likely to have a credit history or high-paying jobs.
It should be noted that just being a student will not automatically qualify you for one of these cards, though.
Choosing Your New Credit Card: Putting It All Together
Following a few simple steps can help you find the credit card of your dreams that will save you money and provide impressive perks and rewards.
Check Your Credit Using Free Services
Service sites like Credit Karma, Credit Sesame, Experian, Nerd Wallet and more offer free credit monitoring that can help you to keep track of your credit score without negatively pinging your credit.
They may also suggest credit cards to help improve your credit and may offer additional services such as identity protection.
Things like medical bills, credit card statements, and more may be on your credit and negatively affecting your score without you fully realizing it.
If you can catch these factors early and pay them off, your credit won’t be adversely impacted.
Additionally, when you do get a credit card to help you save money or build your credit, you may be able to request regular credit updates through the lending company, or they may automatically provide them.
Alternatively, you can purchase your credit report from the three major credit bureaus.
You Should Identify the Type of Credit Card You Need
Above, we listed the main types of credit cards that are generally available to most people.
After checking your credit score, you should take those credit card types into consideration.
Figure out if you need a card to help you improve or establish credit, one that will save you money on the interest of big purchases, or one that you want to accumulate rewards with.
Since everyone’s needs are different, there are a variety of cards that may apply to you.
Find the one that best suits your needs, wants, and expectations that is also within the range of your credit score.
Ask the Right Questions and Narrow Down Your Choices
If you find more than one card that seems like it would fit well into your lifestyle and meet your money-saving needs, many sites will offer a comparison tool.
This will help you to see key differences between cards and pick out unique perks or rewards that may not have been clear before.
You should ask yourself the following questions while looking for the right credit card.:
- Will this credit card help to build or establish credit?
- Can you upgrade to a better card later, after establishing or improving your credit?
- Are there annual fees for this card?
- How much does it cost to open or activate an account?
- How long is the 0% APR period? What is the ongoing interest APR after that period ends?
- What is this card’s policy for balance transfers?
- How do you spend your money, and where?
- Does this card offer rewards for the places you spend most of your money?
- How complicated is this credit card to use for travel, gas, groceries, online purchases and more?
- How quickly can rewards be earned and used, and what are they really worth?
- Will your credit limit automatically increase with consecutive, on-time payments?
- Will interest be paid on your deposit for a secured card?
- Does the credit card company have a debt payoff planner?
- Are there late fees, penalty APRs, or reward expiration dates?
- Is there a sign-up bonus?
Asking these questions will give you a better idea of what credit card, specifically, will work best for you and with your lifestyle.
They can also help you to determine whether you’ll be saving money with that particular card, so be sure to pay attention to APR, interest rates, fees and more when considering your options.
Once You’ve Chosen a Credit Card That Offers You the Best Value, Apply!
When you’ve finally chosen the best card for you, apply for it!
On the application, you can include any and all income that you have access to, not just your personal income from your job.
This may help get you better rates or a higher line of credit, so keep that in mind.
If you use your card responsibly and in the right ways, you can save and make money while still paying your debts off.
If you’re trying to build or establish credit, don’t use the full availability of your credit line and make sure your payments are on time.
Want to pay off your debt?
Find a great 0% APR to help you eliminate your existing debt while improving your FICO Score.
If you’re looking specifically to benefit from perks and rewards, use your card every day for as many relevant purchases as possible without going over your available credit.
These sorts of strategies can help you to benefit the most from your new credit card.
No single credit card is better than every other card out there in all categories.
No single credit card will fit into everyone’s lives.
Understanding how credit cards work, from your credit score’s relevance all the way to your credit card application, will help you choose the best card for your lifestyle, spending habits, and money-saving goals.
Things like your budget, your credit score and history, the reasons you’ll be using the card, and more will separate the card that works best for you from one that may work better for a family member or friend.
Understanding your options and the factors that determine what you can work with is key.
When you’re looking to save, or even make, money by using your credit card, though, there are a plethora of options available to fit any lifestyle.
By using any of the cards on our list, you’re sure to save hundreds of dollars each year and may even make some money through rewards and perks.