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We’re long past the days when the only ways to apply for a credit card were going to a bank branch or mailing in a paper application form. Now it’s standard to apply for credit cards online, where you can fill out the application, have your credit checked and get approved in just a few minutes. Easy.
One could argue, though, that it’s become almost too easy. When you can apply for a card with little effort, you can easily apply for a card that’s all wrong for you. Let’s walk through the process of finding and applying for the right card.
Know your credit score
Credit card issuers approve applications based on credit scores, among other factors. Don’t know your score? We can get it for you: Just create an account, answer a few questions, and see your credit score. Once you know your score, you can see which cards you may qualify for. Scores are on a scale from 300 to 850. The ranges are:
- Excellent: 720 to 850
- Good: 690 to 719
- Average: 630 to 689
- Poor: Under 630
If you have good credit, skip ahead to the next section. Otherwise, read on.
Even if you have poor credit, you still have options. You can apply for a secured credit card, where you deposit a certain amount of money with a credit card issuer to establish your line of credit. The deposit reduces the risk to the issuer, so these cards are available to many people with bad credit or no credit history. Secured cards are reported to the credit bureaus, so using one responsibly will build your credit history.
SOME NerdWallet favoriteS: SECURED
The Discover it® Secured is the rare secured credit card that offers rewards — 2% cash back at restaurants and gas stations on up to $1,000 in combined purchases each quarter, and 1% cash back on all other purchases. It has an annual fee of $0, and after eight months, Discover will review your account to see whether you’re eligible for an upgrade to an unsecured card.
The Capital One® Secured Mastercard® is another great option. It, too, has an annual fee of $0. You can get a $200 credit limit with a deposit as low as $49, for those who qualify. Make your first five monthly payments on time, and you could get access to a higher credit line with no additional deposit needed.
» MORE OPTIONS: Compare secured credit cards
Decide among low interest, 0% or rewards
In general, you can choose a credit card with a low ongoing interest rate, or you can choose one that gives you rewards. You’re probably not going to get both in the same card. However, some rewards cards will give you an introductory period at 0% interest, after which the usual rate kicks in.
The decision is fairly easy: If you expect that you’ll regularly carry a balance from one month to the next, choose a low-interest card. If you’ll be paying your balance in full each month, choose a rewards card. If you’re currently carrying a high-interest balance, think about transferring it to one with a 0% period to pay it off without interest.
If you think a rewards card is right for you, skip to the next section. Otherwise, read on.
Nearly all cards charge a balance transfer fee of 3% to 5% of the amount being charged.
The best balance transfer cards have a long 0% period, and in many cases the 0% APR applies not only to balance transfers but also to new purchases. Check the ongoing APR to see what interest rate you’ll be paying on any remaining balance or new purchases after the 0% period is up. The most cost-effective strategy is to pay off transferred balances before the no-interest period ends, and then pay your balance in full each month.
SOME NerdWallet favorites: 0%
The Citi Simplicity® Card - No Late Fees Ever has a long no-interest period: 0% on Purchases for 12 months and 0% on Balance Transfers for 21 months, and then the ongoing APR of 16.49% - 26.49% Variable APR. The annual fee is $0*.
The Discover it® Balance Transfer gives you a long 0% period for balance transfers — plus rewards that will make you want to keep using the card after the 0% period ends. You earn 5% cash back in rotating monthly categories that you activate, on up to $1,500 per quarter in spending, and 1% cash back on everything else.
Choose between cash-back and travel rewards
This decision may also be an easy one. If you travel a lot, want rewards you can redeem for travel or would like airline or hotel perks, you’re a good fit for a travel rewards card. Cash-back cards, on the other hand, give you the most flexible reward of all: cash, which you can use to reduce your balance or even receive as a check or deposit in your bank account (depending on the card). Travel rewards cards tend to charge an annual fee, whereas most cash-back cards do not.
If you want a travel rewards card, skip to the next section. Otherwise, read on.
Cash-back credit cards are the most popular type of rewards card, and they come in three basic varieties. Which one is right for you depends on how you spend money and how much appetite you have for actively managing your credit card rewards:
- Flat-rate cards pay the same cash-back rate — say 1%, 1.5% or 2% — on all purchases. They require no additional effort, since the same rate always applies.
- Tiered cards pay higher rates in specific categories, such as gas or groceries, and 1% everywhere else. With these cards, you need to remember which one to pull out depending on where you’re shopping.
- Rotating category cards pay 5% cash back in categories that change every three months and 1% on everything else. They require the most work: To get the high 5% rewards rate, you have to opt in to the bonus categories every quarter.
SOME nerdwallet favorites: CASH BACK
If you’re keeping things simple, go with a flat-rate card. The Citi® Double Cash Card – 18 month BT offer, for example, pays 1% cash back on every dollar you spend and then another 1% back on every dollar you pay back.
Several other flat-rate cards pay 1.5% upfront on every purchase, including the Capital One® Quicksilver® Cash Rewards Credit Card and the Chase Freedom Unlimited®.
When looking at tiered cards, choose those with bonus categories that align with your spending. If you spend a lot on groceries, for example, check out the Blue Cash Everyday® Card from American Express. It pays 3% cash back at U.S. supermarkets on up to $6,000 a year in spending (then 1%), 2% cash back at U.S. gas stations and select U.S. department stores, and 1% back on everything else. (Terms apply.)
If you’re a hardcore grocery shopper, check out the Blue Cash Preferred® Card from American Express, which gives you 6% back at U.S. supermarkets (on up to $6,000 a year in spending). It has a $95 annual fee.
In bonus category cards, the Discover it® Cash Back gives you 5% cash back in rotating categories that you activate, on up to $1,500 per quarter in spending, and 1% on all other purchases. The Chase Freedom® offers similar terms. With these cards, recent bonus categories have included such things as grocery stores, gas stations, Amazon.com and restaurants.
» MORE OPTIONS: Compare cash-back credit cards
Choose a general or co-branded travel card
There are two basic kinds of travel credit cards:
- General travel cards give you points that you can redeem for travel expenses. These cards are more flexible, since you can use your points to book with any airline or hotel, or redeem them for credit on your statement against any travel purchase.
- Co-branded cards give you points in a specific airline’s or hotel chain’s loyalty program. They’re not as flexible as general travel cards, but they usually offer perks that general cards can’t match.
Most travel cards — both general and co-branded — charge an annual fee. And most good travel cards offer sign-up bonuses worth hundreds of dollars.
SOME NERDWALLET FAVORITES: GENERAL TRAVEL
A longtime Nerd favorite, the Chase Sapphire Preferred® Card, gives you 2 points per dollar spent on travel and dining and 1 point per dollar on everything else. When you use points to book travel through Chase, points are worth 1.25 cents apiece. You can also transfer points to several major airline and hotel loyalty programs.
Another good option, the American Express® Gold Card. Among its perks: a $100 airline fee credit, 3 points per dollar on flights booked directly with airlines; 4 points at restaurants worldwide, 4 points at U.S. supermarkets (on up to $25,000 per year in purchases, then 1 point per dollar). Terms apply.
The Capital One® Venture® Rewards Credit Card gives you an unlimited 2 miles per dollar spent on every purchase. Miles can be used to book travel or redeemed for statement credit against travel purchases; in both cases, miles are worth 1 cent apiece.
» MORE OPTIONS: Compare travel credit cards
SOME NERDWALLET FAVORITES: CO-BRANDED
Airline credit cards
Depending on where you live, you might have a great deal of choice in which airline you fly, or you may have very little. Either way, if you travel frequently and can (or must) do so on a single airline, it can be worth it to carry that airline’s credit card. You’ll earn frequent-flyer points with every purchase (and usually extra points with airline purchases), and you may get free checked bags, upgrades or other perks. Cards for major carriers include (click on a link to learn more or apply):
- Citi® / AAdvantage® Platinum Select® World Elite™ Mastercard®
- Gold Delta SkyMiles® Credit Card from American Express
- Southwest Rapid Rewards® Premier Credit Card
- United℠ Explorer Card
» MORE OPTIONS: NerdWallet’s best airline credit cards
Hotel credit cards
With co-branded hotel cards, each purchase earns you points in a hotel chain’s loyalty program, and purchases at that hotel chain earn extra points. Points can be redeemed for free nights, and the card often entitles you to room upgrades and other perks. Co-branded cards for major chains include (click on a link to learn more or apply):
» MORE OPTIONS: NerdWallet’s best hotel credit cards
- Each year, the Nerds choose the best credit cards in each category. See our picks and apply here.
- NerdWallet also keeps track of the best current offers. Find them here.
- Our credit card comparison tool shows you cards in different categories and lets you sort by credit score, fees and other characteristics. Check it out here.