Choosing the best credit card in 2024 (2024)

Finding the best credit card can take a bit of thought and research, but you’ll find no shortage of options. Whether you’re trying to earn rewards, build your credit, streamline your debt or just have a line of credit for emergencies, there are credit cards that can accommodate your goals.

Before you start filling out applications, let’s take a look at how different types of credit cards meet different needs, and how you can determine which is best for your situation.

Credit card basics

A credit card gives you a revolving line of credit. The maximum amount you can charge to your card is called your credit limit. If your credit limit is $4,000 and you spend $1,500, your available credit becomes $2,500 until you pay back the $1,500.

Your card issuer will require you to make a minimum monthly payment toward the amount you owe. Generally, your card’s interest rate — also called the annual percentage rate (APR) — will be applied to your outstanding balance and factored into your minimum monthly payment.

You can avoid interest by paying off your balance in full before your statement’s due date. If you need more time for a larger expense, consider using a card with a promotional 0% APR.

Types of credit cards for different needs

You don’t have to limit yourself to just one type of credit card, but you’ll want to avoid applying for too many cards within a short period of time, as this can hurt your credit score. If you have multiple cards, you’ll also want to make sure you can keep track of all your accounts and avoid spending beyond your budget.

Cards for building credit

Secured credit cards, which require an upfront deposit, have more lenient credit requirements than unsecured credit cards. You may also find unsecured credit-building cards and student credit cards. Some of these cards even offer rewards and other perks, and many do not charge an annual fee.

Cards for paying down debt

The average credit card APR is over 20%, but plenty of cards can help you pay down debt by giving you a break on those steep interest costs. Look for 0% introductory APR offers, which often last anywhere from six to 21 months. This can be a great option for financing a large purchase or covering an unexpected expense. Just know that you will likely need good credit (minimum 670 on the FICO scale) to qualify.

Introductory 0% APRs can also apply to balance transfers, which let you move debt from one card — or sometimes even a loan or other line of credit — to another card. Card issuers often charge a fee of 3% to 5% of the transferred balance, so the process isn’t totally free. You also run the risk of ending up in more debt than when you started if you rack up fresh charges before paying down the transferred balance. Keep in mind that when the introductory period is over, you’ll start paying the regular balance transfer or purchase APR on whatever remains of your balance.

Low-interest credit cards

You may be able to find credit cards with below-average APRs from credit unions. Credit cards you already have may also occasionally offer lower APRs for a set period. Sometimes, issuers are willing to reduce APRs a little if you negotiate.

Rewards credit cards

If you want to get something extra for your purchases, rewards credit cards can add significant value to your spending. Rewards are essentially rebates on your spending and can come in the form of cash back, miles or points. The best rewards cards let you earn these rewards at a higher rate on certain types of purchases, such as groceries, dining or gas. They may also come with other benefits, including welcome bonuses, elite status with a particular hotel brand or airline, and statement credits to reimburse you for eligible spending.

Rewards cards run the gamut in terms of accessibility and costs. Some consider applicants with little or no credit while others require excellent credit to qualify. Some have no annual fee and offer a simple rewards structure while others charge hundreds of dollars a year and pack in a multitude of benefits (maybe more than you could ever actually use).

Comparing credit cards

If you want to determine which card is best for you, start by looking at its costs and benefits.

Rewards and benefits

Are you looking to earn rewards on your spending? If so, what kind? Cash back is simple to use and keep track of, but if you travel a lot, miles and points can bring a lot of benefits, whether you earn them with a general rewards card such as the Chase Sapphire Preferred® Card or a co-branded card such as the The World of Hyatt Credit Card*The information for the The World of Hyatt Credit Card has been collected independently by CNN Underscored. The card details on this page have not been reviewed or provided by the card issuer. .

Beyond rewards, credit card benefits can include rental car insurance and other travel protections, cell phone insurance, and airport lounge access. Benefits vary by card, with the highest-end perks often reserved for those with strong credit scores willing to pay annual fees.

Fees

If the card you’re considering charges an annual fee, do the math to make sure it’s worth it. If a hotel rewards card carries a $95 annual fee but awards you a free night’s stay each year (or an amount of points that covers one), that fee may be worth it. If a cash back credit card charges an annual fee, consider whether you’ll earn enough rewards to more than offset that yearly overhead.

Interest rates

It can be easy to get swept up in the rewards or other perks a card might offer and overlook something as crucial as the interest rate (also called the APR). Interest charges can weigh heavily on your ability to pay down your debt. Always check the purchase APR and any other APRs disclosed in a card’s terms and conditions. Credit card APRs are often disclosed as a range, say 20.49% - 29.24% Variable, and can vary with the prime rate. In general, the better your credit score is, the lower your rate will be within that range.

Applying for your ideal credit card

Once you have a clear idea of which card is best for you, get your ducks in a row before you apply. Here are a few key steps to take before applying for your credit card.

• Know where your credit stands. Check your credit score and review your credit reports so you have a good idea of what you may or may not qualify for. You can get your credit reports from each of the three major credit bureaus for free at AnnualCreditReport.com.
• Research the card. Read the fine print and make sure that, in addition to the potential benefits, you understand the card’s terms and conditions. You should also research the card issuer and familiarize yourself with any policies that might affect your application, such as age restrictions (many require you to be at least 21 years old) or Chase’s 5/24 rule.
• Gather your information. Make sure you’re prepared to submit your Social Security number (SSN) or individual taxpayer identification number (ITIN), gross annual income and employment status.
• Get preapproved. Many issuers offer online preapproval, which helps you understand your odds of qualifying without a hard credit inquiry.

Managing your new credit card effectively

Getting a new credit card is exciting, but it’s important to use it responsibly.

“One of the best ways to use your credit card responsibly is to make timely payments,” said Christopher Stroup, a certified financial planner with Abacus Wealth Partners in Santa Monica, California.

At the very least, you need to make minimum payments on time each month, as your payment history is a critical part of how your credit score is calculated. Setting up automatic payments is an easy way to ensure you don’t fall behind.

“Better yet, paying more than the minimum balance due each month helps you avoid unnecessary interest charges,” Stroup said.

Be careful not to charge too much and overextend yourself. Just because you have the available credit doesn’t mean you can afford the high monthly payment that follows. Also, be sure you don’t rack up charges beyond your credit limit. This can happen if you use most or all of your available credit and then allow interest charges or fees to pile on before you pay down the balance.

Frequently asked questions (FAQs)

*The information for the following card(s) has been collected independently by CNN Underscored Money: The World of Hyatt Credit Card*The information for the The World of Hyatt Credit Card has been collected independently by CNN Underscored. The card details on this page have not been reviewed or provided by the card issuer. . The card details on this page have not been reviewed or provided by the card issuer.