Top Credit Cards of 2016
There is no shortage of credit cards on the market. It seems like each day credit card companies keep trying to outmaneuver each other by coming up with better rewards programs, lowering fees and generally trying to come up with the best benefits possible.
Heavy competition is a good thing for the consumer. It means there’s plenty to choose from as we allow companies to battle it out for our business. Here are some of the top credit cards of 2016.
Chase Sapphire Preferred®
The Chase Sapphire Preferred® credit card is just an all-around great rewards credit card for travel, which is why it makes our list of top credit cards of 2016.
Firstly, it usually offers one of the best sign-up bonuses on the market. The bonus may require some spending in the first 3 months, but the free travel is well worth it. When the bonus points are used to book travel through Chase, the reward travel costs 20% fewer points. Essentially, you’ll get a better trip without using as many points.
The other major feature is the ability to transfer the points to the loyalty programs from certain airline and hotel partners. United Airlines, British Airways, Marriott, and Ritz-Carlton are just a few of the partners. The points can be converted without any loss in value. Then, you can use them as you wish to get free flights on these airlines and free nights at hotels.
In addition to a rewards program that focuses on travel and dining, Chase Sapphire Preferred® comes with great benefits. Free personal concierge acts a personal assistant for shopping and travel. Various travel protections cover situations such as trip delays, lost baggage, and car rental accidents.
All these perks help to offset the cost of the annual fee, which is well worth it for the frequent traveler.
Citi® Double Cash
Citi® Double Cash is one of the best credit cards because it is a great cash back card for nearly anyone (as long as you pay off your balance every month). You can earn an effective 2% cash back rate on all your spending. There are no bonus categories or earnings limits to worry about. The simple cash back program makes the Citi® Double Cash card ideal for people who don’t have a noticeable spending pattern or who don’t care about bonus categories. It’s a card to can carry with you all the time knowing that you’re earning a better-than-average cash back rate.
The card also has friendly perks such as a waived late fee (first time only), free concierge service, and trip cancellation/interruption insurance.
The Chase Slate® makes the list of top credit cards because it is the best credit card for balance transfers. If you’re looking for a low cost way to finally pay off some high-interest credit card debt, you may want to consider doing a balance transfer with Chase Slate®.
The card typically comes with a long introductory period where you pay 0% APR on balance transfers. Furthermore, if you transfer balance during the first 60 days, you don’t have to pay a balance transfer fee. Most other credit cards charge such a fee that is equal to 3% of the transferred balance. The card offers a no-cost method of consolidating high-interest debt. You can work on paying off the balance without being charged interest at all.
Lastly, Chase Slate® does have an annual fee and you get a free FICO credit score every month. The credit scores allow you to track how your credit is improving as you pay down your debt.
Blue Cash Preferred® from American Express
The Blue Cash Preferred® from American Express is best known for its amazing cash back rates at grocery stores, gas stations, and department stores. Because these are among the common spending categories for Americans, it’s easy to earn plenty of cash back with this card.
A neat trick with this card is to buy branded gift cards at supermarkets for the 3% cash back. Therefore, you’ve effectively saved some money to shop at those brands.
Discover it® Miles
The Discover it® Miles card is one of the top credit cards of 2016 because it’s a travel rewards card with no annual fee, which is quite rare.
You get flat 1.5 points per dollar on every purchase. Each point is worth 1 cent when you redeem for statement credit toward recent travel purchases. Basically, you’re using the miles to erase a travel expense. The advantage of this reward system is that you can shop around for the cheapest trips on your own. You’re not stuck with using the miles with a particular airline.
With no foreign transaction fees, you are free to use Discover it® Miles during your international trips without paying extra for the privilege of using a credit card. The typical foreign transaction fee is 3% of the purchase.
BankAmericard Cash Rewards™ Visa Signature
The BankAmericard Cash Rewards™ Visa Signature card makes our list of top credit cards for 2016 because it’s a great cash back card with no annual fee. Additionally, you don’t have to worry about a rotating calendar. You’re getting a decent amount of cash back on at supermarkets, wholesale clubs, and gas stations. Again, these are very popular spending categories that’ll help yield high amounts of cash back.
If you happen to have a Bank of America checking or savings account, you’ll earn a bonus if you deposit the cash back into one of those accounts.
The Discover it® credit card is designed to help you earn a high cash back rate in various categories throughout the year. The 5% cash back categories change every quarter and they tend to match the typical purchases for the season. For instance, you can expect home improvement categories in the spring and shopping categories near the winter holidays.
The card has a slew of other convenient benefits that are useful for anyone. Discover it® waives the first late-payment fee in case a bill slips your mind. You get free monthly FICO credit scores to track your credit -- these normally cost around $20 each. Also, there are no foreign transaction fees, which means savings for those times you want to swipe your card on an international trip.
As with all credit card roundups, which card you choose really depends on what you’re looking for. Everyone has different needs to consider. The good news is there’s a card for everyone.
Pick the Best Credit Card for You
Every consumer has a different spending habit or different relationship with credit card debt. Therefore, there is no one credit card that is perfect for everyone. It’s important to know what you want from your credit card before applying for it.
If you’re able to pay off your balances on a monthly basis, you’d be ideal for a rewards credit card of some kind. You can identify your major spending categories from the past 6 to 12 months before choosing the best rewards credit card for your purchase behavior.
For frequent travelers, you should look at your loyalty to specific travel brands -- specifically airlines and hotel chains. A preference to any particular airline or hotel would justify a branded airline or hotel credit card. Otherwise, a general travel rewards credit card would be better.
Finally, those who are struggling to pay down their balances should avoid rewards credit cards. A low-interest credit card or one with a great balance transfer offer would be more appropriate.
The Annual Fee May Be Worth It
Annual fees are often considered unattractive to people who expect to get some value from their credit cards. But, not all credit cards with annual fees are bad.
Most airline credit cards, for instance, come with annual fees. They make up for it by offering travel benefits such as priority boarding, airport lounge access, free companion tickets, and more. Usually, if people use the benefits enough, they’ll get much more value compared to the cost of the annual fee.
Before signing up for a credit card with an annual fee, it would be wise to review the card’s features. You can analyze these features and their costs if you were to pay for them out-of-pocket. If you believe you’ll make good use of these features, then the annual fee could be worth it.
Prepare to Show an Excellent Credit Score
The best credit cards often require that you have good to excellent credit. Therefore, it may be difficult for some people to get one of these top credit cards as their first credit card.
Generally, your credit scores should be at least 700 before you try to apply. FICO credit scores are the standard credit scores used by the majority of credit card issuers when approving applications. The score ranges from 300 to 850 -- higher is better.
You may be able to qualify for one of the best credit cards if you’ve already had another credit line on your credit file. A student loan, car loan, or authorized credit card from a parent are usually enough to help you build a high enough credit score.