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Best Cards of 2016: A Collaboration with Money Magazine

Sept. 11, 2018
Credit Cards, Rewards Credit Cards
Best Cards of 2016: A Collaboration with Money Magazine
NerdWallet adheres to strict standards of editorial integrity to help you make decisions with confidence. Some of the products we feature are from partners. Here’s how we make money.
We adhere to strict standards of editorial integrity. Some of the products we feature are from our partners. Here’s how we make money.

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The Chase Slate® is no longer available on NerdWallet. See NerdWallet’s best low interest and 0% APR credit cards.

For the fourth consecutive year, Money magazine and NerdWallet teamed up to identify the best credit cards. We analyzed 2,200 credit cards — comparing rewards, fees and benefits — to recommend the best cards for cash back, travel, low interest, small businesses, students and secured options. Among the winners …

Best cash-back credit cards

for simplicity: Citi® Double Cash Card – 18 month BT offer

Best for people who:

  • Don’t want to pay an annual fee.
  • Want a simple rewards program with a good rate.
  • Want to transfer a balance.

Not the best for people who:

  • Want the opportunity to earn bonus cash back in specific categories.
  • Are looking for a sign-up bonus.
  • Want extra rewards for airfare, hotels and other travel spending.

As its name says, the Citi® Double Cash Card – 18 month BT offer gives you cash back twice: 1% when you make a purchase and another 1% when you pay it off. For those looking to transfer a balance, it offers an interest break: 0% on Balance Transfers for 18 months, and then the ongoing APR of 15.24% - 25.24% Variable APR.

For Everyday spending: Blue Cash Preferred® Card from American Express

Best for people who:

  • Spend a lot at U.S. supermarkets and U.S. gas stations.
  • Want a welcome bonus.

Not the best for people who:

  • Do most of their grocery shopping at wholesale clubs, Target, Wal-Mart or similar stores.

As the saying goes, you get what you pay for. The Blue Cash Preferred® Card from American Express pays 6% cash back on U.S. supermarket shopping (up to $6,000 annually, then 1%), 3% at U.S. gas stations and select U.S. department stores, and 1% on all other spending. The annual fee is: $95. But spending more than $31 a week at the supermarket after the first year of holding the card would be enough to offset it. Be aware that the rewards apply only to qualifying U.S. supermarkets — not warehouse stores or superstores like Target or Wal-Mart.

In addition to the high rewards rates, this card has a good welcome bonus: $200 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months. Terms Apply. 0% Intro APR on Purchases and Balance Transfers for 12 months, and then the ongoing APR of 14.74% - 25.74% Variable APR.

For maximizers: Discover it® Cash Back

Best for people who:

  • Shop online frequently.
  • Spend in the bonus rewards categories.
  • Want a 0% interest period.
  • Don’t want to pay an annual fee.

Not the best for people who:

  • Want a simple cash-back rewards structure.
  • Travel internationally.

There are many reasons to recommend the Discover it® Cash Back. It has a $0 annual fee. It offers 0% on Purchases and Balance Transfers for 14 months, and then the ongoing APR of 13.74% - 24.74% Variable APR. It also has 5% bonus rewards categories that change every quarter, and earns 1% on all other spending. There is no limit on the amount of cash back you can earn, and rewards never expire. Here are the bonus categories for the year:

Discover bonus categories for 2018
Q1 2018 (Jan. 1 – March 31)Gas stations and wholesale clubs
Q2 2018 (April 1 – June 30)Grocery stores
Q3 2018 (July 1 – Sept. 30)Restaurants
Q4 2018 (Oct. 1 – Dec. 31)Amazon.com and wholesale clubs

Discover offers a unique bonus: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched. You can also ramp up your cash-back earnings by shopping in the Discover Deals online portal, which offers bonus cash back at many popular online retailers. One caveat: While this particular card doesn’t come with a foreign transaction fee, Discover cards aren’t widely accepted outside of the U.S.

Best travel credit cards

for simplicity: Bank of America® Travel Rewards credit card

Best for people who:

  • Want a simple travel rewards program.
  • Don’t want to pay an annual fee.
  • Want flexibility in planning travel.
  • Are Bank of America® customers.

Not the best for people who:

  • Want higher rewards.
  • Want to redeem points for cash.

The Bank of America® Travel Rewards credit card has a simple rewards program: You earn 1.5 points per dollar spent on everything and can redeem for travel expenses on any airline or hotel chain at any time. There is no foreign transaction fee, and the annual fee is $0. It comes with a nice introductory sign-up bonus: 25,000 online bonus points if you make at least $1,000 in purchases in the first 90 days of account opening - that can be a $250 statement credit toward travel purchases.

If you already have a qualifying checking or savings account with Bank of America®, you get a 10% points bonus. Customers with at least $20,000 combined in accounts at Bank of America®, Merrill Lynch and Merrill Edge who enroll in the Preferred Rewards program can earn bonuses that range from 25% to 75%.

For first-year rewards: Discover it® Miles

Best for people who:

  • Want an unusual and generous sign-up bonus.
  • Want a simple rewards program.
  • Don’t want to pay an annual fee.

Not the best for people who:

  • Travel internationally.
  • Plan to use the card for a long time.

The Discover it® Miles has an innovative sign-up bonus: Discover will match ALL the Miles you've earned at the end of your first year, automatically. For example, if you earn 30,000 Miles, you get 60,000 Miles. That's $600 towards travel! You earn 1.5 miles per dollar spent on everything, and each point is worth 1 cent when redeemed to pay for travel expenses.

For travel, there are no blackout dates and no airline or hotel restrictions. Plus, you’ll get a $30 credit each year to cover in-flight Wi-Fi purchases. The annual fee is $0, and it has no foreign transaction fee. The downside is that Discover cards aren’t as widely accepted outside of the U.S. as Visa and MasterCard.

For maximizers: Chase Sapphire Preferred® Card

Best for people who:

  • Travel and dine out often.
  • Want to transfer points through travel programs.

Not the best for people who:

  • Dislike an annual fee.
  • Don’t travel a lot.

For frequent travelers, the Chase Sapphire Preferred® Card has been a go-to credit card for years. Its annual fee — $0 for the first year, then $95 — pays off with 2 points per dollar spent on travel and dining and 1 point on all other spending.

You can transfer your points on a 1:1 basis to nearly a dozen airline and hotel loyalty programs. But you get the best value, 1.25 cents per point, when you use them to book travel through Chase Ultimate Rewards. It has a generous sign-up bonus: Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®. It comes with no foreign transaction fees and no restrictions on travel dates.

Best cards for carrying a balance

For a FICO over 720: Lake Michigan Credit Prime Platinum Card

Best for people who:

  • Have excellent credit.
  • Want a low interest rate.
  • Don’t want to pay an annual fee.

Not the best for people who:

  • Want rewards.

If you have excellent credit — above 720 — and carry a balance, consider the Lake Michigan Credit Prime Platinum Card. The ongoing APR is as low as 6.5%, but there is no rewards program. This is a no-frills card to help you pay the least amount of interest.

For a FICO under 720: Your local credit union

Best for people who:

  • Have less-than-excellent credit.
  • Want a low interest rate.

Not the best for people who:

  • Want a robust rewards program.

Credit unions offer many of the same services as banks, including credit cards, but often with lower rates and fees. Plus, credit unions may have less-restrictive lending standards, so if your credit score isn’t the best, you still may be able to get a good deal. Check out NerdWallet’s Best Credit Union Credit Cards for 2016. Many credit union credit cards have no annual fee and offer modest rewards programs.

For balance transfers: Chase Slate®

Best for people who:

  • Want a long 0% APR period.
  • Don’t want to pay an annual fee.
  • Don’t want to pay a balance transfer fee.

Not the best for people who:

  • Want rewards.
  • Want to transfer a balance from a Chase card or loan.

When you look at the Chase Slate®, you come across a lot of zeroes. The annual fee is $0. The introductory APR is 0% on Purchases and Balance Transfers for 15 months, and then the ongoing APR of 16.49% - 25.24% Variable APR. And the balance transfer fee is $0 for transfers in the first 60 days. Unfortunately, there are also zero rewards. But if you need to transfer a balance and don’t want to accrue more interest on new purchases, the Chase Slate® is the top pick.

For financing a big purchase: Citi Simplicity® Card - No Late Fees Ever

Best for people who:

  • Want a long time to pay off a large purchase with no interest.
  • Don’t want to pay an annual fee.
  • Don’t want to worry about penalties for paying late.

Not the best for people who:

  • Want rewards.
  • Don’t want to pay a balance transfer fee.

If you need a new refrigerator or computer, you may want to pay over time with as little interest as possible. Consider the Citi Simplicity® Card - No Late Fees Ever, which offers a long 0% introductory period: 0% on Purchases and Balance Transfers for 18 months, and then the ongoing APR of 15.74% - 25.74% Variable APR. In addition, the card has an annual fee of $0 and no late fees. Plus, if you do pay late, your APR won’t increase. Even so, make it a habit of paying on time. Late payments can damage your credit score.

If you’re transferring a balance, you’ll pay a fee of 5% of the amount transferred or $5, whichever is greater. But if you’re purchasing a big-ticket item, this is the card to use to pay no interest for nearly two years.

Best small-business credit cards

for simplicity: Capital One® Spark® Cash Select for Business

Best for people who:

  • Want a high rewards rate.
  • Don’t want to pay an annual fee.
  • Don’t want to pay foreign transaction fees.

Not the best for people who:

  • Want higher rewards for spending in specific categories.

The Capital One® Spark® Cash Select for Business pays a flat rewards rate of 1.5% cash back on all spending. Plus, a one-time $200 cash bonus once you spend $3,000 on purchases within 3 months from account opening. The annual fee is $0, and there is no foreign transaction fee. You can also give your employees cards at no additional cost and reap rewards on their spending for your business as well.

For carrying a balance: U.S. Bank Business Edge™ Platinum

Best for people who:

  • Want a long 0% APR on purchases and balance transfers.
  • Don’t want to pay an annual fee.

Not the best for people who:

  • Want rewards.
  • Have less-than-perfect credit.

If your business needs to make a big purchase, like new computers, the U.S. Bank Business Edge™ Platinum gives you a breather from interest: 0% for 12 months on purchases and balance transfers, and then the ongoing APR of 10.74% - 18.74% Variable. The $0. You can also get additional cards for employees at no extra charge.

For maximizers: SimplyCash® Plus Business Credit Card from American Express

Best for people who:

  • Want high rewards for business spending.
  • Don’t want to pay an annual fee.

The SimplyCash® Plus Business Credit Card from American Express earns 5% cash back on U.S.-based wireless services and office-supply stores, 3% in a category you choose (including airfare, hotels, U.S. restaurants, shipping, and computer hardware and software), and 1% cash back on all other spending. The 5% and 3% cash-back rates are capped at a combined $50,000 in purchases each year, and you earn 1% cash back after that.

There’s also an interest-free period — 0% on Purchases for 15 months, and then the ongoing APR of 13.99% - 20.99% Variable APR — that may help if you anticipate making a large purchase for your business.

Best secured credit card

Discover it® Secured

Best for people who:

  • Want to build or repair credit.
  • Want rewards.
  • Don’t want to pay an annual fee.

Not the best for people who:

  • Can’t deposit $200 to establish a credit line.

It’s hard to qualify for a regular credit card if you have damaged credit or no credit history. Enter the secured card. You deposit a certain amount of money to create your credit line. The activity is reported to the credit bureaus, and you’re on your way to building your credit.

Most secured cards charge fees and don’t offer rewards, but the Discover it® Secured is different. This card pays 2% cash back at restaurants and gas stations up to $1,000 in purchases each quarter (then 1%), and 1% cash back on all other purchases. The annual fee is $0. Plus, Discover matches all the cash back you’ve earned at the end of your first year. Discover provides your FICO score for free, so you can chart your progress. After eight months of card use, Discover will review how you’ve managed your credit and may approve you for an unsecured card.

Best credit cards for students

for simplicity: Northwest Federal Credit Union FirstCard

Best for people who:

  • Want to build credit.
  • Don’t want to pay fees.
  • Want a fixed APR.

Not the best for people who:

  • Don’t have a co-signer.
  • Want rewards.

The Northwest Federal Credit Union FirstCard Visa Platinum is a good starter card. You get all the travel and purchase protection benefits from Visa, with low fees and a fixed interest rate of 12.90%. There is no annual fee and no fees for balance transfers or cash advances. As part of the application process, you’ll have to take a 10-question online course called “Credit Matters,” so that NWFCU can judge whether you know how to handle credit.

Applicants under 18 must have a co-signer, and the credit limit will be only $250. Those over 18 but under 21 must show sufficient income or assets for a credit limit of $1,000. Otherwise, people under 21 will need a co-signer too.

Ellen Cannon is a staff writer at NerdWallet, a personal finance website. Email: ecannon@nerdwallet.com. Twitter: @ellencannon

Information related to the Chase Slate® has been collected by NerdWallet and has not been reviewed or provided by the issuer of this card. The card is no longer available on NerdWallet.