Best Credit Cards of 2021
BY: Jolene Latimer | January 05, 2021
One of the major lessons for many consumers in 2020 is that the best financial products are ones that meet as many of your needs as possible. With many people experiencing new economic realities, having credit cards that work for you is essential.
Maybe you’re looking for rewards you can use on something other than travel, or perhaps you want to pay off some older debt more efficiently. Or, maybe you’re just looking for a way to get more cash into your monthly budget. These are all things you can do with the right credit card. Credit card issuers in a competitive market are offering perks and sign-up bonuses in order to outdo their competitors
With so many touting to be the best credit card out there, how do you find a credit card that works for you? Here are some of the best credit cards of 2020 for every purpose.
Overview of the best credit cards
| Issuer | Best for |
|---|---|
| Citi Double Cash Card | Flat-rate cash back |
| Discover it Cash Back Card | Cash back |
| Blue Cash Preferred Card from American Express | Cash back rewards at grocery stores |
| Chase Sapphire Reserve Card | Luxury travel |
| Capital One Quicksilver Cash Rewards Card | Starter card |
| Chase Sapphire Preferred Card | Travel rewards |
| Citi Diamond Preferred Card | Longest 0% APR for balance transfers |
| Credit One Bank Visa for Rebuilding Credit | Rebuilding credit |
| Blue Cash Everyday Card from American Express | Cash back on purchases with no annual fee |
| Deserve EDU Mastercard for Students | Post-secondary students |
Our top credit card picks
This are our top picks for credit cards in 2021.
Citi Double Cash Card
If you want to earn cash back on your purchases, one of the best cash back credit cards for doing so in 2020 was the Citi Double Cash Card. You could earn up to 2% cash back on very purchase — you get a minimum of 1% back on purchases when you buy, and another 1% when you pay, although you have to make sure you’re keeping up with your minimum monthly payments to earn the cash back.
Pros:
- 0% APR on balance transfers for the first 18 months.
- No annual fee
Cons:
- You don’t earn cash back on balance transfers
- No introductory specials
What to remember: If you’re passionate about getting cash back, this card is definitely worth your strong consideration. However, keep in mind that once you transfer a balance you’ll owe interest on the purchases. That is, unless you repay the entire balance of your card each month, including any balance transfers.
Discover it Cash Back Card
If you love cash back rewards and are looking for a card with an enticing introductory offer, this might be the card for you. Discover offers unlimited cash back matching — at the end of your first year, they’ll automatically match all of the cash back you’ve already received, doubling your cash back rewards. There’s no maximum, so if you have major purchases to make in 2021, consider using your Discover it Cash Back Card to boost the amount of money that comes back into your pocket.
You can earn up to 5% cash back from select retailers, such as Amazon and some grocery stores and gas stations.
Pros:
- Double your cash back at the end of the year (valid for your introductory year only)
- No annual fee
- Cash back incentives from certain retailers
Cons:
- Have multiple cash back rates could make it complicated for you to determine your cash back awards by yourself
- No travel rewards
What to remember: If you’re looking for a credit card with great cash back advantages, this could be it. However, you should keep in mind that Discover might not be the best card for travel. Not only are there no travel rewards associated with this card, but Discover does not have the widespread acceptance with merchants outside the United States that other cards do.
Blue Cash Preferred Card from American Express
If you prioritize rewards when making purchases with a credit card, then consider the Blue Cash Preferred Card from American Express, which is one of the most robust rewards credit cards out there for rewards programs on common purchases you probably make almost every day. For example, you can get up to 6% cash back on grocery purchases — up to $6,000.
Pros:
- Excellent cash back percentage
- Cash back incentives work for grocery stores and transit, categories that other cards don’t incentivize as heavily
- Intro bonus is a $250 statement credit after spending $1,000 in three months
Cons:
- Annual fee
- American Express might not be accepted by all merchants
What to remember: This card is all about rewards, rewards, rewards. Not only do you get excellent cash back at grocery stores, but on streaming services and transit — which includes ride shares. The introductory APR of 0% is good for 12 months, but remember — after it expires the interest will hike to anywhere between 13.99% and 23.99%, and you’ll owe interest from the date of your purchases, not from the expiration date of the introductory APR. So, if you do take advantage of this introductory rate, make sure you can repay it before the interest rate hikes.
Chase Sapphire Reserve Card
Do you have a taste for luxury when you travel? If so, the Chase Sapphire Reserve Card could be the right choice for you. This card is truly designed to appeal to luxury travellers, with flexible travel rewards points, priority lounge passes and $300 in travel credits annually.
Pros:
- Annual travel credit offsets a majority of the annual credit card fee
- Earn triple the points on dining
- Earn 50,000 bonus points (or $750 toward travel when redeemed through Chase Rewards) after spending $4,000 in the first three months of opening the card.
Cons:
- High annual fee of $550
- No introductory rate APR
What to remember: This card has an exceedingly high annual fee. While the annual travel credit can offset the fee to an extent, it’s likely only worth it if you travel often. For travellers, the card can be indispensable. Not only do the travel credits speak for themselves, but the Priority Pass gets you into over 1,000 airport lounges worldwide, plus, you can get a $100 application fee credit for TSA Precheck or Global Entry.
Capital One Quicksilver Cash Rewards
Are you new to the world of credit cards? If you want to cautiously dip your toe into these waters, consider the Capital One Quicksilver Cash Rewards card. With no annual fee, this is a good “beginner’s card,” that still has some cash back rewards. Plus, it has a 0% APR introductory offer.
Pros:
- 0% APR introductory offer
- No annual fee
- Cash back rewards
Cons:
- Cash back rewards are not as significant as other cards
- 0% introductory APR is not as long as comparable cards
What to remember: This card does a little bit of everything, with modest cash back rewards and a 0% introductory APR. However, keep in mind that comparable cards offer bonus rewards categories that this card doesn’t. Also, the 0% APR lasts for 15 months — if you’re looking to take advantage of a 0% APR introductory offer you might want to keep searching for something that lasts 18 months. That said, if you’re looking for a simple credit card with no annual fee to help you get started, this one does check the boxes. The flat-rate cash back offer is easy to calculate, simplifying your own personal finance strategy.
Chase Sapphire Preferred
If you’re looking for a travel rewards card but aren’t quite ready to commit to the annual fee of the Chase Sapphire Reserve, consider the Chase Sapphire Preferred, which costs just $95 and still has many benefits. For example, you can earn double the points on travel and dining at many restaurants across the globe, in addition to free delivery from DoorDash
Pros:
- 50,000 bonus points when you spend $4,000 in the first three months
- No foreign transaction fee
- Trip cancellation and trip interruption insurance
Cons:
- $95 annual fee
- No access to luxury travel deals
- Bonus points and statement credits might not be useful, limiting their appeal
What to remember: For travellers looking for some benefits from their credit card without paying the hefty price for the Chase Sapphire Reserve, the Preferred offers a lot of practical benefits (even if it doesn’t help you with luxury travel bonuses like getting into airport lounges). With the Preferred, elements of travel like baggage delay insurance, roadside assistance and lost luggage reimbursement are standard. These benefits can be a huge asset to travelers if worst case scenarios occur.
Citi Diamond Preferred
If you want to do a balance transfer and need a lot of time to repay the funds, the Citi Diamond Preferred card can be a great choice. That’s because it has an introductory offer of 0% APR on purchases and balance transfers that lasts 18 months. You’ll be hard-pressed to find a longer balance transfer APR.
Pros
- 18-month APR for balance transfers
- No annual fee
- Flexible payment due dates
Cons
- No rewards or incentives
- Balance transfer fee of the greater between $5 or 3%
What to remember: Keep in mind that even though you have a long introductory APR period, after that ends you’ll have to pay interest on your purchases throughout the introductory period if you have not paid them off already. Not just that, but this card does charge late fees. If you’re not great at paying your bills on time you might want to search for a card that will be more forgiving.
Credit One Bank Visa for Rebuilding Credit
Need to rebuild your credit? Don’t worry, there’s a credit card that can help you with that (as long as you make timely payments, that is). It can be hard for a lot of people in tough financial situations to put down the deposit for a secured card to begin rebuilding credit, which is why this particular card doesn’t require that. Plus, you get 1% cash back on some purchases. If you’ve been having a hard time getting approved for a credit card because of bad credit or no credit, this might be a solution for you.
Pros
- Don’t need to pay a deposit
- 1% cash back on some purchases
- Regular reporting of timely payments to credit bureau
Cons
- Annual fee
- Low credit limit
What to remember: Rebuilding your credit is possible, and having revolving credit as part of your credit mix can be a big part of that. However, make sure you can keep up with your payments as late or skipped payments could hurt your credit even further.
Blue Cash Everyday Card from American Express
If you don’t want to pay an annual fee for your credit card but still want some cash back on purchases, this card could provide a happy medium. You get 3% cash back on purchases at supermarkets and 2% cash back at gas stations and some department stores. Plus, you get $100 back after spending $1,000 in your first six months.
Pros
- No annual fee
- 20% back on Amazon purchases in the first six months, up to $200
- Tiered cash back options at grocery stores, gas stations and some other categories
Cons
- No balance transfer APR offer
- No travel rewards
What to remember: If you’re looking for practical rewards, this card makes a compelling case, especially because it has no annual fee. However, it might not be smart to rely solely on this card for rewards since there are more competitive rewards cards out there, especially if you want travel rewards.
Deserve EDU Mastercard for Students
If you need to build your credit history and are a student (especially an international student) this card makes obtaining credit easy, even if you don’t have a credit score.
Pros
- Amazon Prime student membership
- 1% cash back
- No annual fee
- Flexible approval
Cons
- Limited rewards program
- High APR
What to remember: If you don’t have any credit history and are having difficulty getting approved for a credit card, the flexible approvals process of this card could be a great strategy to help you improve your credit. It’s $5,000 limit and 1% cash back offer make it practical to use for everyday purchases. However, it doesn’t have a robust rewards program, so if you qualify for a card that does you might want to go with that option. Also, the APR is somewhat high— if you use this card, definitely don’t carry a balance.
Summary table
Not sure how these credit card options stack up against one another? Here’s what they look like side-by-side.
| Issuer | Annual fee | Intro APR | Regular APR | Special rewards |
|---|---|---|---|---|
| Citi Double Cash Card | $0 | N/A | 13.99% to 23.99% | 18 month 0% APR on balance transfers, up to 2% cash back on purchases |
| Discover it Cash Back Card | $0 | 0% for 14 months | 11.99% to 22.99% | Unlimited cash back match, 5% cash back on every day purchase such as from Amazon.com |
| Blue Cash Preferred Card from American Express | $95 | 0% for 12 months | 13.99% to 23.99% | 6% cash back at U.S. supermarkets, 3% cash back on gas and transit |
| Chase Sapphire Reserve Card | $550 | N/A | 16.99% to 23.99% | $300 travel credit and access to 1,000+ airport lounges worldwide |
| Capital One Quicksilver Cash Rewards Card | $0 | 0% for 15 months | 15.49% to 25.49% | One-time $200 cash bonus, 1.5% cash back on every purchase |
| Chase Sapphire Preferred Card | $95 | N/A | 15.99% to 22.99% | Travel protections |
| Citi Diamond Preferred Card | $0 | 0% for 18 months | 14.74% to 24.74% | Special access tickets for entertainment events, liability for unauthorized purchases |
| Credit One Bank Visa for Rebuilding Credit | $0 to $99 | N/A | 17.99% to 23.99% | 1% cash back on eligible purchases |
| Blue Cash Everyday Card from American Express | $0 | 0% for 15 months | 13.99% to 23.99% | 20% cash back on Amazon purchases in the first 6 months, 3% cash back at U.S. supermarkets, 2% cash back on gas |
| Deserve EDU Mastercard for Students | $0 | N/A | 18.74% | Amazon Prime Student membership for one year, 1% cash back on purchases |
What to look for in credit cards
Besides a low interest rate you want a card that works for you. Look for credit cards that offer these perks.
Cash back rewards
Cash back rewards means a credit card pays cardholders for using its card. Issuers of cash rewards credit cards offer 1% to 10% cash back on purchases you make, most often determined as travel, dining and grocery, and entertainment expenses. Many times, cards like Amex will feature bonus categories and if you keep a close eye on the monthly specials being offered, you can earn more cash back on qualifying purchases. To make these cards work for you, use your card to earn cash back but be sure to pay your bill in full at each monthly statement to truly benefit. Doing so means you won't pay interest that offsets the reward.
Balance transfer
If you have a high APR, transferring your bet to a balance transfer card is a way to lower the interest so you can pay the debt faster. Many credit issuers will offer introductory APRs at lower rates for a few months to a year, which can help new cardholders get your debt under control.
No annual fee
Annual fees for credit cards can range from $35 to hundreds of dollars each year. Typically, the higher the fee, the more benefits you receive. If you use a credit card often and take advantage of the benefits, those perks may offset the annual fee. Some travel credit cards may charge an $85 annual fee yet provide you with TSA Precheck credit valued at $85 to offset the fee. Still, cardmembers are already paying interest to a credit card company, so if you can avoid additional fee cards, do so.
Travel rewards
With a travel card you can earn miles and points toward travel through your preferred airlines and hotel brand. This helps to reduce the cost of airfare, car rentals, and hotels stay and are great for frequent travelers. Often, travel credit cards will feature welcome bonus miles or points as an introductory offer, typically requiring you to spend a certain sum within the first 3 months. Creditors are banking on you not paying it off right away so they can collect interest. If you can pay it off, you'll earn the best rewards with no interest. Membership rewards often include free baggage, airport lounge access, and upgrades.
FAQs
Still have questions about getting a credit card? Here are answers to the most common questions.
Do you need credit history to get a credit card?
While most rewards or travel-focused credit cards require positive credit history to obtain, some credit cards are geared toward students or those with bad credit or no credit. these starter credit card offers may be secured credit cards meaning you front the money on your card and use it until the money is gone and you replenish it. Though these cards don’t have as many rewards, you don’t need to show a robust credit history in your application, which is helpful if you have not built a credit history yet, and yet the cards help you build creditworthiness and eventually get to an unsecured credit card.
Does applying for a credit card hurt your credit score?
When you apply for a credit card, the card issuer does a credit inquiry, which will impact your credit score. If you have many credit inquiries at the same time, this could show to the credit bureaus that you’re in need of credit, which would lower your FICO score, even if you have excellent credit. Generally, if applying for a credit card does hurt your credit score, the impact is short lived — especially if you repay the balance of your card regularly.
Do credit cards encourage bad spending habits?
Using a credit card instead of cash could cause you to spend more for a number of reasons. Paying with a credit card is quite easy— sometimes it just takes a few clicks. This could cause you to spend more money than you wanted without realizing. Also, it can be difficult for some people to track their spending without the physical reminder of handling cash. While credit cards can also be a savvy financial tool, if you struggle with over-spending they could enable your habit.
Why you should (or shouldn’t) use credit cards
Are credit cards a wise financial choice? There are a lot of advantages to credit cards, but they come with some disadvantages too. It’s important to weigh both to make sure you’re choosing financial products that best fit your lifestyle and needs.
Why you should use credit cards
- Build credit: Credit cards can help you build your credit so you can make larger purchases such as a car or home.
- Not all merchants accept cash: Especially as social distancing becomes more important, some merchants are requiring you to pay by credit card.
- Rewards can help: If used wisely, credit cards can actually be a smart financial tool because some of the rewards they offer — such as cash back rewards — genuinely put money back into your pocket.
Why you shouldn’t use credit cards
- Revolving debt: Some people have a difficult time repaying their credit cards because they are a form of revolving debt. You can’t just pay the minimum each month and expect to get out of debt at some point in the future. Unlike a loan, there is no fixed date for when you’ll be fully out of debt, which means you have to monitor your debt situation and create your own payment plan.
- Easy to overspend: Credit card purchases can be really easy, sometimes too easy, to complete. Because you don’t necessarily notice the money gone from your wallet or bank account, some consumers have a tendency to spend money they don’t actually have using a credit card, which can make it hard to repay in the future.
The bottom line
No matter what your particular financial goals are, there is probably a credit card on the market that can help you. Credit cards have many niche features and bonuses that can become useful financial tools when used wisely. However, credit cards can also be dangerous for some consumers, especially those who aren’t familiar with revolving debt or who aren’t confident in their abilities to monitor their spending. When it comes down to it, doing your research and choosing a credit card that meets all of your needs is the key to making this financial strategy work for you.