The Best Credit Cards of January 2022
Finding the best credit card that supports your financial goals doesn’t have to be hard.
What is the best credit card? It depends on what matters most to you.
Balance transfer? Business credit card? Fewer fees, better rewards, or lower interest rate?
Narrowing your search for the best credit card is as easy as matching the credit card features that matter most to you with the card that will help you achieve your goals.
MoneyRate’s list of the most popular and best credit cards can help you narrow your options, evaluate perks, and compare features to arrive at the best credit card offers for you.
LIST OF WINNERS FOR JANUARY 2022
Citi® Double Cash Card - 18 month BT offer
The Citi® Double Cash Card - 18 month BT offer
It’s 1% cash back for every dollar you spend and 1% for paying your credit card bill. (Of course, payment must be made on time to earn rewards.)
This card can also pull double duty.
With an intro 0% APR on balance transfers, you can transfer other amounts onto the card and work on getting out of debt without paying a ton in interest.
Keep in mind that balance transfers do not earn cash back rewards, and transfers must be completed within four months of opening your account.
After the introductory rate expires, the APR becomes 13.99% – 23.99% (Variable)
Cash Back Reward: The cash back reward is effectively 2% – 1% when you buy and another 1% when you pay your bill.
Intro Balance Transfer APR: 0% for 18 months
Ongoing APR: 13.99% – 23.99% (Variable)
Balance Transfer Fees: Intro fee 3% of each transfer ($5 min) completed within the first 4 months of account opening. After that, 5% of each transfer ($5 min).
Annual Fee: $0
Credit Needed: Excellent, Good
Chase Freedom Flex℠
The new Chase Freedom Flex℠
- 5% cash back on purchases made in rotating quarterly bonus categories (up to $1,500 spent each quarter; activation required)
- 5% cash back on travel purchases made through the Chase Ultimate Rewards® portal
- 3% cash back on dining and drugstore purchases
- 1% cash back all other purchases
The other perks and benefits are generous too.
Welcome Bonus: Earn $200 cash back after you spend $500 within the first three months of account opening.
Intro APR: For a period of 15 months, enjoy 0% APR on purchases and balance transfers. Then the ongoing APR is 14.99% - 23.74% Variable
Annual Fee: $0
Credit Needed: Excellent, Good
Blue Cash Preferred® Card from American Express
The Blue Cash Preferred® Card from American Express
- 6% back at U.S. supermarkets up to $6,000 spent annually (1% beyond that).
- 6% on select streaming subscriptions.
- 3% back at U.S. gas stations and on eligible transit.
- 1% cash back on your other purchases.
Welcome Bonus: Earn a $300 statement credit after you spend $3,000 in purchases on your new card within the first six months.
Intro APR: Enjoy 0% intro APR on purchases for 12 months from the date of account opening. Then the ongoing APR is 13.99% - 23.99% Variable
Annual Fee: $0 introductory annual fee for the first year, then $95.
Credit Needed: Good, Excellent
Citi® Diamond Preferred® Card
If you’re looking for a long payback period on a popular balance transfer credit card, the Citi® Diamond Preferred® Card
Intro Balance Transfer APR: 0% intro APR for 21 months from the date of your first transfer (when made within the first 4 months of opening your account); also, intro 0% APR on new purchases made in the first 12 months from account opening. After the intro periods, the APR becomes 13.74% - 23.74% Variable
Balance Transfer Fees: Balance transfer fee applies with this offer 5% of each balance transfer; $5 minimum.
Annual Fee: $0
Credit Needed: Excellent, Good
Ink Business Preferred® Credit Card
The Ink Business Preferred® Credit Card
Welcome Bonus: Earn 100,000 bonus Ultimate Rewards® points after you spend $15,000 within the first three months. It’s worth $1,250 in travel when redeemed through the Ultimate Rewards® protal.
Ongoing APR: 15.99%-20.99% Variable
Annual Fee: $95
Credit Needed: Excellent, Good
What Is a Credit Card?
A credit card is a convenient way to pay for purchases using a revolving line of credit. You might think of it as a short-term loan.
Some credit cards come with additional perks such as cash back, rewards points, purchase protections, and travel benefits.
You can pay your balance in full each month, or you can pay a lesser amount as long as it is equal to or more than the minimum payment owed.
If you don’t pay the balance in full, you will pay interest on the balance, as you would with any loan.
Credit cards are different than debit cards. When you use a debit card to pay for something, you are using money you have in the bank. It’s the same as writing a check.
When you use a credit card, you are borrowing money from your credit card provider to make the purchase.
You don’t need to have the money in the bank, but you will need to have money available to make your credit cards payments around the same time each month.
How Do Credit Cards Work?
To receive a credit card, you’ll fill out an application that asks for information such as your income and social security number. You can usually apply online.
Then, the card issuer will check your credit score to determine whether to approve your application.
If you’re approved, you’ll also be given a credit limit. Your credit limit is the total amount you are allowed to charge during the billing cycle.
Once you’ve been approved for a credit card, the card issuer agrees to pay for your purchases up to your credit limit amount.
In return, you make an agreement to repay the issuer for your purchases or at least make minimum payments each month on the amount you owe.
If you are unable to pay off your card’s balance each month, the card issuer will charge interest on the amount you haven’t repaid.
What Are Some Advantages of Credit Cards?
The best credit cards come with some advantages not found with other payment methods, including:
If your card is lost or stolen, and someone uses it to make fraudulent purchases, you legally can’t be held responsible for more than $50 worth of unauthorized purchases.
While some debit cards offer a similar level of liability protection, you risk having your bank account wiped out while waiting for fraudulent transactions to be reversed.
Cash and travel rewards
Many of the best credit cards offer rewards of some type.
Some of the best rewards credit cards may offer as much as 6% cash back on purchases or earn points or miles that can be redeemed for cash, travel, merchandise or gift cards.
Travel and purchase benefits
What’s more, many cards come with a long list of perks ranging from extended warranty protection for purchases to complimentary lounge access at airports or even free upgrades to first class on some flights.
Opportunity to easily finance large purchases
Rather than having to apply for a loan or save for months to make a larger purchase, you can instantly access your credit limit anywhere credit cards are accepted.
What Types of Credit Cards Are Available?
Credit cards are typically affiliated with one of four processing companies: Visa, MasterCard, American Express, or Discover.
Combined, they offer dozens of credit card options. These can broadly be broken down into the following categories:
A standard credit card may have few bells and whistles. It allows users to make purchases and pay them off over time. Some may have low credit card fees and introductory 0% APR offers for purchases and balance transfers.
Rewards credit cards can be broken down into numerous subcategories such as cash back, airline, hotel, travel, and gas cards.
These cards offer points, miles, or cash back for purchases and may offer additional protections such as trip interruption or delayed baggage insurance. In return for these rewards, card issuers may charge an annual fee.
What is a secured card? It’s a credit card intended to build credit for those with no credit or bad credit. They typically require a deposit that is equal to the card’s credit limit.
What is the easiest card to be approved for?
Secured cards are your best bet if you have a limited credit history.
Otherwise, many standard cards are available to those with average credit scores. Typically, the more lucrative rewards cards require very good or excellent credit.
What Is a Credit Limit?
A credit limit is the amount of money you are pre-approved to spend on your credit card. Once your balance reaches your credit limit, you can no longer make charges to your card.
For example, if you use your card to charge an item that costs $200, and your credit limit is $2,000, you could still charge another $1,800, minus interest, during that credit cycle.
If you pay your card balance in full when your bill comes, you can charge another $2,000.
If you make the minimum payment, you will still have a credit limit of $2,000, but the closer you are to your credit limit, the less you’ll be able to charge.
Your balance is not simply the amount of purchases you’ve made with your credit card.
Purchases, balance transfers, interest, and fees are all part of your credit card balance.
If you have made payments on time and aren’t too close to your credit limit, you may be able to request an increase in your limit after six to 12 months.
What Is APR?
“APR” stands for “annual percentage rate.” It’s how much interest you’ll pay on any balance you carry.
So, what is 24% APR on a credit card?
It means that over the course of the year, you will spend 24% more to pay off your card if you carry a balance.
For example, let’s say your balance is $1,000.
Assuming you don’t make any payments, you will owe $1,240 at the end of 12 months.
Of course, this is a simplified example; and if you didn’t pay anything for a year, your balance would actually be higher because of late and over-the-limit fees.
What Is a Credit Card Grace Period?
Credit cards provide a grace period before they start charging interest.
If you pay off your purchase within the grace period, you won’t have to pay interest.
Legally, credit card companies must provide a 21-day grace period, but some issuers offer longer grace periods, such as 25 days.
Credit Card Fees
Before you sign up for a credit card, you should understand the fees that may come with their use. Here are a few to know:
Credit card processing fees
These fees are usually paid by a retailer or merchant, but they may be passed on to you by some companies. Before making a large purchase with a credit card, ask if there is a fee to do so.
Cards that come with extensive rewards and perks are most likely to charge cardholders an annual fee.
Foreign transaction fee
Most commonly set at 3%, a foreign transaction fee is charged by some, but not all, cards when you make a purchase in a foreign currency.
Balance transfer fee
If you are transferring a balance from one card to another, many cards charge a balance transfer fee (which is a percentage of the amount transferred).
Cash advance fee
This fee may be charged if you access money from a credit card using an ATM. Similar to a balance transfer fee, a cash advance fee is typically a percentage of the amount you withdraw.
Over-the-limit and late fees
If you go over your credit limit or pay your bill late, you could get hit with a flat fee that may be as high as $39.
Reasons to Use a Credit Card
All the advantages listed above are good reasons to get a credit card. However, if you need a few more, consider the following:
1. Ease of payment
Credit cards are accepted by most retailers nowadays. When you use a credit card, you don’t have to worry about losing cash or fumbling with change at the register.
Even better, your iPhone or android mobile phone have virtual “wallets,” where you can securely store your credit card information and use your phone to make purchases with your credit card.
2. Simplified recordkeeping
If you do most of your spending on a credit card, it’s easy to track expenses and manage your budget. It’s easy to categorize spending you do on a credit card to see where your money is going.
3. Chance to build credit
When used properly, credit card cards can increase your credit score and extend your purchasing power. This is valuable when it comes time to purchase a car or home.
How Many Credit Cards Should You Have?
There is no one right answer to this question. How many credits cards you have depends on your financial situation and spending needs.
However, most people benefit from having at least two cards, if not more.
If you plan to carry a balance
If you know you’ll be carrying a balance from month to money, it’s best to find a card with an introductory 0% APR.
If you can pay your balance off each month
For expenses that you can pay off each month, look for a rewards card that offers cash back or points for your purchases.
Note: If possible, you don’t want to carry a balance on a rewards card since they often have higher APRs, and interest charges can quickly offset the value of any rewards you receive.
If you plan to travel
If you travel frequently, it may also be a good idea to get cards affiliated with your favorite airline and hotel chain. These often come with complimentary elite status or other similar benefits.
If you’re a business owner
If you own a business, getting a business card is a smart way to ensure your company’s finances don’t intermingle with your personal accounts.
Another reason to apply for multiple cards is to receive the lucrative welcome offers available on many rewards cards.
These provide hundreds of dollars in cash back or thousands of bonus points or miles to new cardholders who spend a specific amount on purchases within a certain period of time.
How to Choose Your Main Credit Card
It can be confusing, because choosing the right financial resource to use depends on your circumstances and habits. However, here are some thoughts that should help you sort out which cards should be in the front of your wallet:
Use up gift cards as quickly as possible
Gift cards are notorious for assessing onerous fees that steadily whittle away at the value remaining on the card.
Some cards even expire after a limited time. So, if you don’t use these up promptly, it can be akin to throwing money away.
Only use store cards when significant discounts apply
Simplification can be a key to staying on top of personal finances, so in general, it is better to consolidate activity into one or two “go-to” cards rather than complicate your record-keeping by using a variety of individual store cards.
The exception is when those store cards offer a meaningful discount on purchases you were going to make anyway — then the money saved may be worth the extra effort.
Know your credit and debit card fee terms
Often the devil is in the details. Knowing what each card charges for withdrawals, cash advances and other transactions can be a key to deciding how to use these resources most efficiently.
Credit is better if you pay your balances in full
In addition to your transaction habits, your payment habits also factor in to deciding which type of card is better.
If you are in the habit of paying your credit balances off in full every month, a credit card can have some key advantages over a debit card.
You are essentially using money cost-free during the payment period, and rather than having to keep track of a series of transactions in your checking account, you can just make a single payment out of that account every month.
Credit cards also provide better fraud protection, so you don’t risk having your checking account cleaned out by information theft.
Prioritize credit cards differently depending on how you pay your bills
If you leave an unpaid balance at the end of the month, make sure you use the credit card with the lowest interest rate first.
If you don’t leave a balance, the interest rate is irrelevant, so prioritize based on which card offers the most useful rewards.
By the way, even though canceling credit cards carelessly can negatively impact your credit score, it still may make sense to periodically go through your wallet and consider closing the cards you rarely use.
After all, every card you keep open is a potential opening for financial fraud.
What is the easiest credit card to get approved for?
Start with one that has credit requirements matching your own score. As you browse credit cards on MoneyRates, you’ll find the credit requirements listed, and there are options for people with no credit all the way to those with excellent credit.
See Rates and Fees; terms apply for the Blue Cash Preferred® Card from American Express