Credit Cards

A credit card is a plastic or metal payment card that allows people to make purchases without having the money upfront, then pay back the card issuer over time. In return for the ability to make purchases on credit, the cardholder may have to pay interest or fees. Those fees and interest charges depend on the card and how soon the cardholder pays the bill in full.

Using a credit card responsibly also is one of the most efficient ways to build credit. Having a solid credit history is crucial for things like buying a house, purchasing a car or getting approved for a personal loan in the future.

Overview of How Credit Cards Work

Credit cards require regular payments to keep the account open and in good standing. To that end, cardholders receive a credit card statement once a month, which details purchases and payments made during that billing cycle and notes when a payment is next required.

If you pay for your purchases within the window of the grace period on the account (typically between 21 and 25 days after the monthly statement is issued), you won’t have to pay more than you borrowed. If you carry your balance past that, however, you’ll generally have to pay the regular interest rate - or regular APR - on the amount you owe. Credit cards have higher regular APRs than most consumer loans, so it’s best to avoid carrying a balance.

Outside of interest charges, credit cards may come with fees. Late fees apply to nearly all credit cards when you don’t pay at least the minimum payment by the due date. Annual, monthly, and one-time fees may be charged just to have certain credit cards, too. The credit cards with the biggest benefits and perks - travel credits, free airport lounge memberships, and the highest rewards rates, to name a few - are usually the ones with annual fees.

Key Things to Know About Credit Cards

• Credit cards are rectangular pieces of plastic or metal measuring 3.4 inches by 2.1 inches. They are the same size as a debit card, prepaid card, gift card or driver’s license.
• Credit cards have a magnetic stripe as well as an EMV chip programmed with the information needed to complete a purchase. Some new credit cards also have an RFID chip for contactless payments.
• Making a purchase with a credit card enables the user to securely borrow money as needed and then repay the card’s issuer after the fact.
• Using a credit card responsibly is the easiest way to build a good credit score.
• Other benefits for credit card users include the opportunity to earn rewards on purchases, the flexibility to pay off large purchases over time, or the chance to reduce the cost of existing debt through a balance transfer.
• Banks and credit unions offer credit cards because they are a good source of income from fees and interest charges.
• To qualify for a credit card account, an applicant must be at least 18 years old with enough income to afford monthly bill payments.
• There is no minimum age to get a credit card as an authorized user.

In short, a credit card is one of the most valuable financial tools available to consumers, allowing them to make purchases and pay them back later, all while building a credit history.

The easiest credit cards to get approved for with no credit or bad credit are secured credit cards. These cards have annual fees as low as $0 and report monthly to the 3 major credit bureaus. Some even give rewards of 1% or more. To help people with no credit or bad credit maximize their odds of approval for a credit card, WalletHub’s editors compared the approval requirements for more than 1,500 credit card offers, along with their fees, rates and rewards.

Easiest Credit Cards to Get Approved For

• Best for No Credit Check: OpenSky® Secured Visa® Credit Card
• Best Unsecured: Credit One Bank® Visa® Credit Card
• Best for No Annual Fee: Petal® 2 Visa® Credit Card
• Best for Low Deposit: Secured Mastercard® from Capital One
• Best for Students: Journey Student Rewards from Capital One
• Best for No Bank Account: First Progress Platinum Elite Mastercard® Secured Credit Card
• Best for No Credit: Capital One Platinum Credit Card

It’s important to get a good credit card because credit cards are the best credit-building tools available to us. They all report information to the major credit bureaus on a monthly basis, and unlike loans, they don’t require you to incur any debt. Some credit cards are much easier to get approved for than others, though. You can learn all about the best easy approval credit cards below.

This content is not provided or commissioned by any issuer. Opinions expressed here are the author’s alone, not those of an issuer, and have not been reviewed, approved or otherwise endorsed by an issuer. Please keep in mind that while some offers may come from WalletHub advertising partners, sponsorship status played no role in card selection. 

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The best credit cards of 2021 are offers with stand-out terms in at least one major category, such as rewards, rates or fees. To find the best credit card for your needs, you will need to determine which features are most important to you, based on how you plan to use the card, and then compare offers in search of the best deal. To help, WalletHub compared 1,500+ offers and picked the best credit cards in the most popular categories.

Best Credit Cards of 2021

This content is not provided or commissioned by any issuer. Opinions expressed here are the author’s alone, not those of an issuer, and have not been reviewed, approved or otherwise endorsed by an issuer. Please keep in mind that while some offers may come from WalletHub advertising partners, sponsorship status played no role in card selection.

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The average adult has 5.6 credit cards: 3.1 cards that can be used anywhere and 2.5 store cards, according to 2017 data from Experian. But there’s no golden rule for how many credit cards you should have, or how many credit cards is too many. It depends on personal preference as well as your credit standing and organizational skills.

Using more than one credit card can help you save by allowing you to get the best terms for every transaction that you make. No single credit card offers the best rewards in every purchase category, plus the lowest rates and fees. But you can achieve that effect with a collection of cards that each excel in a particular area. For example, you could get the best cash back credit card for everyday spending, the best travel rewards card to earn extra on airfare and hotel reservations, and a 0% credit card before making a big-ticket purchase.

Using multiple credit cards for the wrong reasons, however, can get you into big trouble. Numerous credit card applications in a short period of time can hurt your credit score, for one thing. And even more importantly, having too many credit cards can lead to overspending, expensive interest charges, missed payments and even more credit score damage.

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There is no minimum credit score to get a credit card, if any credit card will do. Some credit card companies don’t even check applicants’ credit history, and the main approval requirement is that you earn more money than you spend. So it’s certainly possible to get a credit card even if you have a very low credit score or no credit score at all.

But there is a difference between getting approved for a credit card in general and getting one of the better offers.

The credit score needed for credit card approval ultimately depends on which specific card you want to get. Most of the time, credit card companies have a credit score tier they’re looking for, and applicants will need a score in the required tier (or higher) for a good chance of approval. The tiers are bad, fair, good and excellent.

The thing is, credit cards require scores that are a bit higher than the traditional minimum for each tier in the overall credit score range, according to WalletHub’s research. So for each credit tier, you can see a “traditional” score range and a “WalletHub recommended” score range below.

Here is the credit score needed for a credit card at each level:

 One way to estimate your credit card approval odds is to check for pre-approval. Many major issuers will allow you to check for free. It won’t hurt your credit score. And you’ll get a pretty good idea of your chances. Plus, if you’re not sure what your score is yet, you can check your latest credit score for free on WalletHub. You’ll also get personalized credit card recommendations with high approval odds.

Just remember that having a qualifying credit score does not guarantee credit card approval. The credit card application process takes many other factors into account. Payment history, existing debt and income play big roles, too.

Credit card companies are the banks and credit unions that issue credit cards to consumers and small business owners. Credit card companies also service cardholders’ accounts by billing for purchases, accepting payments, distributing rewards and more.

See the Best Credit Cards of 2021

Credit card networks play a different role. They dictate where credit cards can be used, facilitate payment processing at the point of sale and administer secondary credit card benefits, such as rental car insurance, travel insurance and extended warranties. The four major card networks are Visa, Mastercard, American Express and Discover. The tricky part is that two of the world’s largest card networks – American Express and Discover – also issue credit cards.

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Credit cards for bad credit help people with credit scores from 300 to 639 rebuild their credit. The best credit cards for bad credit have annual fees as low as $0, and some even give rewards equal to 1% cash back or more on purchases. Plus, all major credit cards for people with poor credit report account information to the credit bureaus each month (some offers are sponsored). That’s why using the right credit card responsibly is the best way to rebuild damaged credit.

The right credit card for most people with bad credit is going to be a secured card. Secured credit cards charge the lowest fees and offer the best approval odds. But if you need a small emergency loan, you’ll have to compare unsecured cards for people with bad credit, which tend to be pretty expensive. If you’re not sure which card to get, you can’t go wrong with one of our editors’ best credit cards for bad credit, which were selected from 1,000+ offers.

Best Credit Cards for Bad Credit

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Credit cards for no credit offer high approval odds to people with limited credit history, even total newcomers with no borrowing experience. All major credit cards for people with no credit will also make everyday spending safer and more convenient, as well as help you build a good credit score. Plus, the best no-credit credit cards can help you save along the way, thanks to $0 annual fees and even some rewards (some cards are from WalletHub’s partners). To help point you in the right direction, WalletHub’s editors compared all of the credit cards for people with no credit in our database of 1,500+ offers, and you can check out their favorites below.

As you compare credit cards for people with no credit, it’s important to remember that responsibly using a credit card is the best way to build credit from scratch. Using a credit card doesn’t have to be risky, either. You don’t even need to spend any money to benefit. Simply having an open credit card account that’s in good standing will send positive information to the major credit bureaus every month. So if you don’t think you’ll be able to pay your bill on time every time, just lock your card in a drawer.

Best Credit Cards for No Credit

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The best credit cards to build credit with charge low annual fees, accept applicants with limited or bad credit, and report to the credit bureaus monthly. Using a credit card responsibly is the best way to build credit, as on-time payments add a track record of positive credit history. Unlike loans, credit cards can also be free to use if you get a card with no annual fee and pay the bill in full every month.
 

Best Credit Cards to Build Credit

This content is not provided or commissioned by any issuer. Opinions expressed here are the author’s alone, not those of an issuer, and have not been reviewed, approved or otherwise endorsed by an issuer. Please keep in mind that while some offers may come from WalletHub advertising partners, sponsorship status played no role in card selection.

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The best credit card for instant approval and use is the Blue Cash Everyday® Card from American Express. Applicants who get approved instantly for this credit card when they apply online will be able to get the card number immediately and start using the card to make purchases just a few minutes after they’ve applied.

Specifically, you’ll have a short period of time to write down your card information once you’re approved for this credit card. People who miss this window of opportunity will need to wait until they get the card in the mail.

The Amex Blue Cash Everyday card offers solid ongoing rewards of 20% cash back on Amazon.com purchases for the first 6 months (up to $150 back), 3% cash back at U.S. supermarkets (up to $6,000 spent per year), 2% back at U.S. gas stations and select U.S. department stores, and 1% back on all other purchases, earned as statement credits. It also has a $0 annual fee and requires a minimum of good credit for approval.

Best Instant Credit Cards for Approval and Use

• Blue Cash Everyday® Card from American Express: Best Overall
• The Platinum Card® from American Express: Best for Luxury Perks
• Blue Cash Preferred® Card from American Express: Best for Cash Back
• American Express® Gold Card: Best for Dining Purchases
• JetBlue Card: Best for No Annual Fee
• Southwest Rapid Rewards® Plus Credit Card: Best Airline Card

Instant approval is always possible when you apply for a credit card online or in person, but instant use is rare. Some credit card issuers don’t offer any instant use credit cards. Others have only a few. Each issuer has their own restrictions for when you can get instant use, too.

Instant Credit Card Approval and Use by Issuer

If you’re not able to get a credit card number for immediate use, don’t worry. Credit cards usually only take 7-10 business days to arrive after you’re approved. And many credit card companies provide expedited delivery for a small fee, or sometimes even for free.