The Verdict: The BankAmericard® Credit Card is a very good tool for avoiding interest on credit card debt, whether you’re planning a big purchase or need a way to reduce the cost of an existing balance (Bank of America is a WalletHub partner). The stars of the show are BankAmericard’s $0 annual fee and its 0% introductory APRs, which apply to purchases and balance transfers for the first 15 billing cycles. If you transfer a balance, you just have to do so within 60 days of opening an account to get that rate.
Those features compare favorably to most competing offers. The average 0% purchase APR lasts for less than 10 months. And the average 0% balance transfer deal gives you about 11 months. But that is not to say BankAmericard’s financing offer is flawless. The most important imperfection for folks with expensive debt is the card’s 3% balance transfer fee. Not only is that above average for a balance transfer credit card, but it’s also a distinguishing factor between the BankAmericard Credit Card and its biggest competitors.
The Verdict: The Bank of America® Travel Rewards Credit Card is a very good option for people with excellent credit who want to reduce the cost of travel without paying an annual fee. But it’s only a truly great choice for fairly low-spending Bank of America banking customers with a lot of cash saved (Bank of America is a WalletHub partner).
The party starts with a 20,000-point initial rewards bonus, worth $200 in travel, when you spend $1,000 or more within 90 days of opening your account. That’s well above average for a card offering a points-based bonus. Still, if you’re someone who spends $1,000 per month, rather than every three months, you can get at least twice as much dollar value from competing offers.
The Verdict: The Bank of America® Premium Rewards® Credit Card is one of the best rewards cards for people with excellent credit who like to travel and dine out (Bank of America is one of our partners). In fact, it ranked 7th overall in WalletHub’s 2018 Credit Card Rewards Report for the net value that the average person can expect to earn in two years: $1,503.
The premium rewards start with an initial bonus of 50,000 points after you spend at least $3,000 within 90 days of opening your account. That’s worth $500. And the perks keep coming, with 2 points per $1 spent on travel and dining, plus 1.5 points per $1 on everything else. The average points card gives you just 1.17 per $1.
Once you get a credit card, you can build credit by using it every month, paying off your purchases on time and keeping a low credit utilization (less than 30%). But there are many ways to build credit with a credit card other than making purchases and payments. For instance, you could lock your credit card in a drawer, and your score would still improve.
Airline miles, also known as frequent flyer miles or just miles, are a type of travel reward that you get for making purchases through an airline or by using a miles credit card. Some credit cards are tied to certain airlines, while others offer general miles that can be used for all kinds of travel. You can use miles to buy airfare or, in some cases, exchange them for things like cash back or gift cards.
The standard Chase Ultimate Rewards points value is 1 cent per point, but it can vary based upon which card you have and what you spend the points on. Unlike some credit card companies, Chase (a WalletHub partner) doesn’t discourage certain types of redemption, such as cash back or gift cards, by making points worth less when you choose them (e.g. half a cent instead of one cent). Rather, Chase Ultimate Rewards points are always worth at least 1 cent apiece when redeemed through Chase, and certain cards offer extra value when used for travel.
Credit card points are one of the three main types of credit card rewards, the others being cash back and miles. Cardholders can earn points in many ways, including making purchases, spending a certain amount within a few months of opening an account, or referring a friend (some cards are from WalletHub partners).
Online store credit cards with guaranteed approval don’t exist. No credit card company can guarantee approval for every single person who applies for one of its cards, as there are always some minimum standards to meet (some cards are from WalletHub partners). You also need to be a U.S. resident with a U.S. mailing address and either a Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN) to be eligible, in most cases. Being in active bankruptcy will automatically disqualify you for most cards, too.
Credit card debt statistics speak to the financial health of American households. They can also foreshadow over-borrowing bubbles, changes to lending standards, and other trends with the potential to impact our wallets. That’s important because the latest news may seem encouraging, but the complete picture is not pretty.
Americans repaid $40.3 billion in credit card debt during Q1 2018 – the second-largest quarterly payoff ever. However, we began the year owing more than $1 trillion in credit card debt for the first time ever, after adding a post-Great Recession record $91.6 billion to our tab in 2017.
There are very few store credit cards for bad credit. Nearly all store cards require at least fair credit for approval, according to WalletHub’s database of 1,000+ credit card offers. But there are exceptions from time to time. Right now, the best store credit card for bad credit is the Fingerhut Credit Account. You can get it with a poor score and there’s no annual fee. Plus, it reports to the credit bureaus every month, which will allow you to build credit if you pay your bills on time.
The easiest way to see if you’re pre-approved for a credit card is to check a credit card company’s website. Most major issuers let you see which of their cards you’re preapproved for by simply entering your name, address and the last four digits of your Social Security number into an online form. This includes American Express, Bank of America, Capital One, Chase, Citi and Discover, just to name a handful. You can also go to a bank branch and ask if they have any offers for you. Or a pre-approved offer for a store credit card could pop up when you’re shopping online. And finally, you might receive a pre-approved credit card offer in the mail.
The average credit card interest rate for new offers is 18.88% as of the first quarter of 2018, according to WalletHub’s Credit Card Landscape Report. But existing accounts have an average interest rate of 13.08%. Both of those overall average credit card APRs have increased in recent years and will continue to do so as the Federal Reserve keeps hiking its target rate.
More than 7 in 10 0% balance transfer credit cards charge a balance transfer fee, according to WalletHub data. The average fee is equal to about 2.6% of the amount transferred. And that would cost the average household over $200, if they were to transfer their nearly $8,000 in credit card debt.
A good APR for a credit card is 14% and below. That's roughly the average APR among credit card offers for people with excellent credit. And a great APR for a credit card is 0%. The right 0% credit card could help you avoid interest entirely on big-ticket purchases or reduce the cost of existing debt. But you generally need at least good credit to qualify for such a card, and 0% APRs only last for a limited time. As a result, the very best APR for a credit card is one you don't need to worry about. If you pay your bill in full every month, your credit card's interest rate is irrelevant because it will never apply. And you don't need a certain credit score to accomplish that.
The Verdict: We gave the OpenSky® Secured Visa® Credit Card (Capital Bank is a WalletHub partner) an above-average rating not because of its fee structure or other account terms, which aren’t particularly impressive, but rather because it’s characterized by a very unique feature: no credit check. That means you can get it and thus begin the credit-improvement process no matter what storm clouds may be hanging over your finances. And in that sense, the OpenSky® Credit Card truly lives up to its name. In return for a chance at finding clearer financial skies, you’ll have to pay a $35 annual fee and place a security deposit of at least $200 — both reasonable but not exceptional price points.
A number of cheaper options are available, including a few with no annual fee, which means opening the OpenSky® Visa would require you to open your wallet a bit wider than necessary. With that being said, annual fees aren’t the only thing that you should take into account when comparing secured credit cards, so you’d be wise to check out the rest of this in-depth review, including how OpenSky® stacks up to its competition, below.
The Capital One® Quicksilver® Card - 0% Intro APR for 15 Months (Capital One is a WalletHub partner) offers terms befitting excellent credit despite good credit being all that’s needed for approval. In addition to its solid suite of rewards – buoyed by a base earning rate that’s 50% higher than average and supplemented by a more modest $150 initial bonus – Quicksilver won’t hit you with annual fees and tends to offer regular financing promotions. For example, new applicants currently get 0% introductory interest rates on both purchases and balance transfers for up to 15 months (14.49% - 24.49% (V) APR thereafter).
The Verdict: If you’re planning a big balance transfer and have good or excellent credit, you should definitely consider the Citi® Diamond Preferred® Card – 21 Month Balance Transfer Offer (Citi is a WalletHub partner). Diamond Preferred doesn’t charge an annual fee and offers 0% on balance transfers for the first 21 months your account is open, as long as you complete the transfer within the first four months. That’s just about the longest 0% term on the market, giving you ample time to get out from under your forthcoming debt before a regular APR takes effect. The bad news is you have to pay a 5% (min $5) balance transfer fee for the pleasure of avoiding interest for 21 months.
Citi Diamond Preferred also offers 0% on new purchases for the first 12 months your account is open. That’s a bit longer than the average 0% card gives you but still nothing special.
0% APR on purchases and balance transfers for 12 billing cycles
No annual fee
Potential for a very high regular APR
3% foreign-transaction fee
The Verdict: The Bank of America® Cash Rewards Credit Card is an attractive everyday spending vehicle for people with excellent credit (Bank of America is a WalletHub partner). Things begin on a positive note, with no annual fee to worry about and the ability to earn a $150 initial bonus for spending just $500 in the first 90 days after account opening. Plus, you’ll have access to 0% financing on new purchases and balance transfers for the first 12 billing cycles.
The Bank of America® Cash Rewards Credit Card even supplements its base 1% cash-back earning rate with 2% back on groceries and wholesale clubs and 3% back on gas. But there’s a catch. Those bonus earning rates apply to only the first $2,500 in combined grocery, wholesale clubs and gas purchases each quarter. So if you spend more than $833 a month on such everyday necessities, you will wind up hitting that limit and earning only 1% back — slightly less than the market average of 1.04% — on all your purchases for the rest of the quarter.
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