Like the BCS, ranking credit cards is an imprecise science. You can certainly identify a tier of offers superior to others, but the relative value of each really depends on who's using them. For example, someone with excellent credit who travels frequently will require a different card than a student looking to avoid interest on a large upcoming expense. That's why we at Card Hub compared more than 1,000 credit card offers to identify the best options for different consumer segments and needs. It's also why the numbered list you see below is there to provide a count for the Best Credit Cards of 2013--not create a relative hierarchy.
1. Chase Sapphire Preferred (Initial Bonus): New customers who spend at least $3,000 during the first three months their accounts are open receive 40,000 bonus points, redeemable for $500 in Chase rewards travel or a $400 statement credit. There's also no annual fee during the first year, so you can theoretically nab the initial bonus and get out of dodge before spending more than you would ordinarily.
2. Blue Cash Preferred Amex (Everyday Rewards): In addition to a $150 initial bonus that serves to cancel out two years' worth of annual fees, this Amex card offers 6 percent cash back at supermarkets up to a $6,000 annual spending limit in that category as well as 3 percent at both gas stations and department stores and 1 percent on everything else.
3. PenFed Platinum Rewards (Gas Rewards): While most gas rewards credit cards are tied to specific gas station chains, the Platinum Rewards Card from the Pentagon Federal Credit Union enables you to earn the points-equivalent of 5 percent cash back at any standalone gas station you visit--meaning it can prove quite valuable when prices at the pump make their annual trek above $4 per gallon, and the only fee you'll have to pay to get it is a one-time $15 charge for joining PenFed.
4. Capital One Venture (General Travel Rewards): Long recognized as one of the best overall rewards credit cards, the Venture Card's notorious "double miles" deal ensures you'll earn what amounts to 2 percent cash back across all purchases as long as you redeem your miles for any travel-related expense. In addition to that versatile value, you'll get a $100 initial rewards bonus if you spend $1,000 during the first three months, and the $59 annual fee doesn't take effect until the second year.
5. PenFed Premium Travel Rewards (Airline Rewards): Much like gas credit cards are typically tied to particular station chains, airline rewards are usually carrier-specific. This card, however, gives you the miles-equivalent of 5 percent cash back on any airline purchase, making it a lucrative option for non-brand-specific frequent travelers.
6. Spark Cash for Business (Business Rewards): This Capital One credit card offers a great deal of hassle-free value by giving small business owners 2 percent cash back across all purchases, a $150 bonus for spending $1,000 during the first three months, and an additional $50 for opening an employee card. There's no need to keep track of rewards earning tiers or rates that change on a quarterly basis, and a lack of foreign transaction fees means you can save wherever in the world business takes you. This card's $59 annual fee takes effect in year two.
7. Capital One Cash Rewards for Newcomers (Rewards for People New to Credit): This card offers 2 percent cash back on travel and 1 percent on everything else and does not charge an annual fee. It therefore enables inexperienced consumers to cost-effectively build credit while subsidizing their spending.
8. Journey Student Rewards from Capital One (Student Rewards): Not only does this card come sans annual fee--the most important factor for student credit users--it also offers 1 percent cash back across all purchases and a 25 percent earning bonus for months that you pay your bill on time.
9. Slate from Chase (Balance Transfer): Chase resurrected the free balance transfer genre with its Slate Card, which offers 0 percent for 15 months and doesn't charge an annual fee or a balance transfer fee. A credit card calculator will show you that the average household, which has nearly $7,000 in credit card debt, could realistically save up to $1,000 with such a card.
10. Citi Diamond Preferred (Financing Upcoming Purchases): Offering 0 percent for 18 months, this Citicard is better suited to minimizing interest on big-ticket expenses than lowering the cost of existing debt in light of its 3 percent balance transfer fee. It does not charge an annual fee.
11. BankAmericard for Students (Student Financing): Students who need a few extra months to pay off books or other major expenses will love this card's 15-month 0 percent interest rate and lack of an annual fee. Just keep in mind the importance of paying off what you owe before regular rates take effect.
Best for Rebuilding Credit
12. Harley Davidson Secured (Fully Secured): Despite its branding, this card is the best option for people with damaged credit based on the simple fact that it's one of the rare secured cards that does not charge an annual fee. Secured cards offer the same credit building capabilities as unsecured cards and tend to be slightly easier to get, given issuers are shielded from risk by the requirement that users place a refundable security deposit that acts as their credit line. The Harley Davidson Card actually offers some rewards too--even rarer among secured cards than the lack of an annual fee.
13. Capital One Secured (Partially Secured): The more available credit you have, the faster you can improve your credit standing. That's what makes the Capital One Secured Credit Card so attractive. It's technically a partially-secured card, which means you might be able to get a credit line in excess of your security deposit. There is no annual fee.
While 13 credit card offers are much easier to swallow than the thousand-plus that are on the market, it might still be difficult to choose the right card for your needs without a bit of added guidance. So, as you peruse the offerings, keep the following tips in mind:
-- If you don't have above-average credit, prioritize low costs over rates and rewards.
-- Rewards are best for people who always pay their bill in full, while 0 percent cards are better for those who don't.
-- It's helpful to have one credit card for everyday expenses (which you pay off in full every month) and another for revolving debt (if applicable). This enables you to get the best possible rewards and the lowest rates (impossible with a single card) and helps you budget, since finance charges on your everyday card will indicate the need to cut back).
With these things in mind, apply for the card of your dreams and enjoy the perks that accompany the strategic use of plastic.
Odysseas Papadimitriou is the CEO of Card Hub, a leading website that compares credit card offers and identifies the Best Credit Cards for different consumer needs.
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