Credit cards can help you improve your credit score or tally up points that you can turn into free gas, free travel and free money. Some people open new credit cards not to make purchases, but to transfer balances, a very useful strategy for taking pressure off of people with lots of high-interest debt.
In most cases, the simple act of opening a credit card account will improve your credit score. That’s because the new line will expand your available credit and shrink your credit-utilization ratio, which is one of the most important factors lenders use to gauge the risk of potential borrowers. Different cards, however, are good for different reasons. Some have no annual fee, others offer a generous points program. Some are great for balance transfers, others are designed with travelers in mind. Here’s a look at the very best cards across the most common and popular categories as you work toward financial freedom in 2021.
Last updated: April 26, 2021
Citi Double Cash Card
Category cards offer big-time cash back — as much as 6% in some cases — but earning it can be a headache. You have to keep track of which cards to use for which purchases in which months because the cards with the biggest incentives rotate categories throughout the year. If you’re a highly organized person who’s able to keep up with all that, good for you. If not, the best flat-rate cash back card on the market is the Citi Double Cash Card. It delivers 2% cash back — 1% when you make a purchase and another when you make a payment — on everything you buy all year with no restrictions. There’s no annual fee, no cap on points earned and points never expire.
Citi Rewards+ Card
The 1+1 cash-back system of the simple but generous Double Cash card is not Citi’s only innovation when it comes to unique payment structures. The Rewards+ card is the only card on the market, according to Citi, that rounds up points on every purchase to the nearest 10 points. If you make a purchase that earns you 23 points, for example, you get 30. It also comes with a zero percent introductory rate for 15 months, which makes it a good balance transfer card — but not the best.
US Bank Visa Platinum Card
The U.S. Bank Visa Platinum Card makes a strong argument for being the best balance transfer card. That’s because you’d be hard-pressed to find a card that lets you park high-interest debt for free for a longer period of time. It comes with zero-percent interest for 20 full billing cycles — two more months than even the Double Cash card. The 20-month offer gives more financial breathing room to people looking to move high-interest debt to a safe place while they tackle other financial obligations. Virtually all other balance-transfer cards on the market top out at 18 months — and this card has no annual payment.
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Capital One Venture Rewards Card
It appears that maybe — possibly, hopefully — travel will be a thing again at some point this year. If so, you’ll want to open a new travel rewards card so you can be ready to roll when you get the all-clear. The Capital One Venture Rewards card is a tough one to beat. It comes with unlimited double bonus miles that accumulate with every single purchase 365 days a year. Even better, cardholders who spend $3,000 in the first three months get 60,000 bonus miles. Designed with travelers in mind, the card comes with 24-hour travel assistance, no foreign transaction fees and more than a dozen other travel perks for things like car rentals and shopping.
Did You Know: How To Consolidate Credit Card Debt
If you’re one of the many people whose credit took a beating in 2020 — or if you’re just struggling with bad credit in general — the right card can be the perfect way to rebuild. Most cards designed for people with bad credit are secured. You deposit cash upfront and spend it the way you would with a debit card and then re-up when you run out. Then, the card issuer reports your progress to the credit agencies so you can start digging out. The Indigo Mastercard is different. First of all, prequalification won’t hurt your credit score. More importantly, however, it’s an unsecured card, meaning that no security deposit is required upfront and it works just like any other credit card. Also, while not as particularly important financially, the Indigo offers a bunch of snazzy card design options for free.
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