Best Credit Cards for October 2019

A credit card can be a great way to build credit, earn rewards on every purchase, and even finance your purchases at APRs as low as 0%. But with thousands of cards to choose from, many people fall into a state of “paralysis by analysis,” unable to make a decision because there are simply too many choices and too many variables on which to compare one credit card to another. Here at The Ascent, we’re working to make selecting a credit card as easy as buying a new pair of socks. Below, we’ll explain the ins and outs of the credit card market, and show you how to pick a card that works best for your spending needs.

We at The Ascent want to help you climb to the top and conquer your money goals. That is why our top picks have a few features in common that can help your money work harder for you, cut out-of-pocket costs, or help you get out of debt faster. The most important factors in our rating methodology are as follows:

• Zero to low annual fees to cut-out-of pocket costs
  
• Big sign-up bonuses to make your money work harder for you
  
• High rewards rates in everyday spending categories
  
• Inclusion of 0% intro APR offers to help you get out of debt faster or defray the cost of a large purchase
  
• Competitive ongoing APRs to ensure debt balances are manageable

Though there are many different credit cards out there, virtually all card offers can be divided into five different categories based on their features and rewards programs. The first thing you should do when shopping for a credit card is to narrow the list of possible matches by picking a certain feature or functionality that is particularly important to you.

The five types of credit cards are as follows:

1. 0% APR credit cards -- These cards offer 0% intro APRs on purchases and/or balance transfers for periods as long as 21 months, allowing you to carry a balance without paying double-digit interest rates during the promo period. These credit cards are best for people who will carry a balance since a 0% intro APR card can potentially save you hundreds (or even thousands) of dollars in interest.
   
2. Cash-back credit cards -- These are the most common types of credit cards out there. Cash-back credit cards give cardholders rewards equal to a percentage of their spending, typically ranging from as low as 1% all the way up to 10% for spending in certain bonus categories. The beauty of cash back credit cards is that you can redeem your rewards for cash to use however you’d like. Many people redeem their rewards for statement credits, which reduce the card’s balance. You can think of a 1.5% cash back rewards card as a card that effectively gives you a 1.5% discount on everything you buy.
   
3. Travel credit cards -- These cards typically accrue rewards in terms of miles or points for every $1 you spend and can be redeemed for flights, hotels, rental cars, and more. Travel cards also tend to have other perks (such as no foreign transaction fees when used abroad) that 0% APR cards and cash-back cards are less likely to have. Frequent travelers, especially international travelers, would be wise to have a travel credit card, if only for the benefit of avoiding foreign transaction fees. The best credit card offers for new cardholders are typically travel cards for people who have high incomes and excellent credit histories, due to their lucrative sign-up bonuses.
   
4. Secured credit cards -- These are designed for people who have no credit history, or bad credit. A secured credit card acts just like an ordinary unsecured card, but it requires applicants to put up collateral to open the account. These cards report to the big three credit bureaus just like any other credit card, making them a great entryway into the world of credit. They’re also useful for rebuilding from a bad credit score.
   
5. Business credit cards -- Designed for business owners and managers, these cards typically offer higher credit limits and rewards programs that pay out bonuses on company expenses like online advertising, cable or phone bills, internet and utilities, office supply stores, and others. Business cards are great for small business owners who want to separate their personal expenses from their business expenses while building a relationship with a bank that will help their business qualify for other types of financing later.

Credit cards are about more than just borrowing money. A credit card is a useful payment option that offers more convenience and fraud protection, while helping you build the credit necessary to qualify for other loans at the lowest possible interest rate.

Here are a few reasons why it makes sense to use a credit card for your ordinary daily purchases:

• Building credit -- A credit card is a great way to help you build credit so that you can later qualify for financing to buy a car, home, or another large purchase. Most credit cards report to all three credit bureaus, so having an open credit card account is one of the best ways to start building up your credit report and credit score. (Did you know that your credit report can also affect whether you get a job, or the rates you pay on insurance? Having good credit is much more important than you might think.)
  
• Rebuilding credit -- Late payments or collections accounts can haunt your credit report for seven years, dragging down your credit score the whole time. But having an open credit card account in good standing can help you rebuild your credit by “diluting” the importance of the bad accounts. It also shows that you’re current on your newest obligations, which can help you show lenders that you’re managing your finances better today than you did in the past.
  
• Fraud protection -- It’s a simple fact that credit cards offer more fraud protection than debit cards. At the very worst, cardholders are only liable for up to $50 of losses if their credit card is used fraudulently, though most credit card companies simply eat the $50 loss rather than pass it on to their customers. In comparison, the worst case for debit card fraud is that you ultimately lose everything in your checking account (and potentially more if the account is overdrawn or linked to other accounts).
  
• Rewards -- When used responsibly, a credit card is simply a better way to pay than debit or cash. Think of rewards as an effective discount -- if you use a 1.5% cash back card to make purchases, it’s like getting a 1.5% discount on everything you buy. Over time, even small percentages really add up!
  
• Extra perks -- Many cards offer perks including free rental car insurance, extended warranties on the things you buy, and price protection, which can reimburse you if something you purchase is advertised at a lower price later. These little-known card perks can easily create hundreds of dollars of value for their cardholders. (You won’t find these perks on the average debit card.)

According to the Federal Reserve’s latest Consumer Credit Report, the average interest rate charged on credit card accounts in the United States is 15.13%, as of May 2019.

However, this is an overall average which includes accounts that charge no interest. For example, many credit cards have 0% intro APRs for 12 months or more, and many store-branded credit cards offer promotional financing deals.

When the data is narrowed down to only include those accounts that are assessed interest, the average is significantly higher at 17.14%. So this would be a more accurate answer to the question of “what is the average credit card interest rate?”

To illustrate what a high-interest form of debt credit cards tend to be, consider that the average APR on a 60-month new car loan is just 5.36% as of May 2019. Even an unsecured personal loan has a significantly lower 10.63% interest rate, on average.

The average credit card interest rate has increased dramatically over the past few years. Here’s a chart that shows the progression of credit card interest rates from 2014 to the most recently available data:

To recap, here are the best credit cards for 2019

Our best credit cards picks by category:

• Best balance-transfer credit cards
• Best cash-back credit cards
• Best cash back credit cards with no annual fee
• Best 0% APR credit cards
• Best travel rewards credit cards
• Best travel cards with no annual fee
• Best airline credit cards
• Best gas and groceries credit cards
• Best no-annual-fee credit cards
• Best credit cards for students
• Best credit cards for excellent credit
• Best credit cards for good credit
• Best credit cards for average credit
• Best credit cards for bad credit
• High limit credit cards
• Best low interest credit cards
• Best rewards credit cards
• Best sign-up bonus credit cards
• Best secured credit cards
• Best business credit cards

Our lists of picks by issuer:

• American Express credit cards
• Barclaycard credit cards
• Bank of America credit cards
• Capital One credit cards
• Chase credit cards
• Citi credit cards
• Discover credit cards
• Wells Fargo credit cards