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We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. SHARE: GaudiLab/Shutterstock.com March 18, 2022 Checkmark Bankrate logo How is this page expert verified? At Bankrate, we take the accuracy of our content seriously. "Expert verified" means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced. Their reviews hold us accountable for publishing high-quality and trustworthy content. Ted Rossman is a senior industry analyst at Bankrate.com. He focuses on the credit card industry and helps consumers maximize rewards, get out of debt and improve their credit scores. Mariah Ackary is a personal finance editor who joined the Bankrate team in 2019, excited by the opportunity to help people make good financial decisions. Send your questions to Cathleen's stories on design, travel and business have appeared in dozens of publications including the Washington Post, Town & Country, Wall Street Journal, Marie Claire, Fodor’s Travel, Departures and The Writer. Bankrate logo

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What s the best credit card to have

If you can avoid interest by paying your credit card bills in full, it’s hard to top a simple that gives you 2 percent cash back on every purchase. Examples include the (2 percent cash rewards on purchases), the and the (Technically, the Citi Double Cash gives you 1 percent when you buy something and another 1 percent when you pay it off.) I used to be afraid to give that answer. It’s a little boring, right? I used to name flashier cards like the and . People would always nod when I mentioned perks such as airport lounge access and first-class upgrades. And those are great cards—for some people. But even with all of their various credits and benefits, the fact is, they’re expensive. Most people can’t or won’t spend that much ($550 or $695 per year, respectively) for a credit card. Honestly, most of us don’t travel enough to maximize the benefits anyway (especially since COVID hit, but even before that, if we’re being realistic). An found just half of Americans had flown or stayed in a hotel for pleasure over the past 12 months. And just half of them (or a quarter of all Americans aged 18+) had done so more than once.

The multi-card strategy

If you’re a maximizer who’s willing to juggle different cards for different purchases, you can earn more than 2 percent cash back (or travel points/miles) on certain purchases. However, I’d argue you should still have a 2 percent cash back card as a foundation. For instance, I’m a huge fan of the . It gives 6 percent cash back at U.S. supermarkets (on up to $6,000 in annual spending, then 1 percent after that). Cardholders also get 6 percent cash back on select U.S. streaming subscriptions and 3 percent on U.S. gas station purchases and public transit. But other purchases earn just 1 percent cash back—that’s where your 2 percent card comes into play. There are so many examples of this. Figure out where you spend the most money and lean into those categories (groceries, dining, travel, gas or something else). Whatever it is, maximize it. But since most cards with lucrative bonus categories only give 1 percent cash back on “everything else,” your 2 percent cash back card is an excellent supplement.

Most people don t like annual fees

Only 44 percent of cardholders paid an annual fee in 2020, . For a limited time, it’s possible to get 3 percent cash back on every purchase without paying an annual fee. The USAllianceVisa Signature Card is offering this deal through at least the end of 2022. And the card gives 1.5 miles on each purchase and matches all miles earned within the first 12 months, for an effective earn rate of 3 percent that first year. If you’re only going to use one card over the long haul, then I’d vote for a card like the Wells Fargo Active Cash, Citi Double Cash or the PayPal Cashback Mastercard. If you’re willing to put up with some restrictions, such as redeeming into a separate account held with a particular financial institution, then the Fidelity Rewards Visa Signature Credit Card, the TD Double Up℠ Credit Card and the fit the bill, too.

The bottom line

Whether it’s the card you pull out for every purchase or part of a mix-and-match strategy, there’s a good place for a no-annual-fee 2 percent cash back card in every wallet. Have a question about credit cards? E-mail me at [email protected] and I’d be happy to help. SHARE: Ted Rossman is a senior industry analyst at Bankrate.com. He focuses on the credit card industry and helps consumers maximize rewards, get out of debt and improve their credit scores. Mariah Ackary is a personal finance editor who joined the Bankrate team in 2019, excited by the opportunity to help people make good financial decisions. Send your questions to Cathleen's stories on design, travel and business have appeared in dozens of publications including the Washington Post, Town & Country, Wall Street Journal, Marie Claire, Fodor’s Travel, Departures and The Writer.