11 Airline Credit Cards To Get You Off The Ground

Open traveler's bag with clothing, accessories, credit card, tickets and passport

Many of us know what a credit card is and most of us know how to use them. When it comes to credit cards, it is important to remember to use them wisely so that you do not get yourself into a large amount of credit card debt. I would like to focus on the best types of credit cards and the rewards that are available with them in this article. There are many different credit cards available to you, so it is important for you to understand your needs when deciding which one is right for you. In this article, I am going to highlight the best airline credit cards, however, I will give you some information about other types of rewards that credit cards may offer to you.

Best Airline Credit Cards For Your Flight

Before I jump into the best airline credit cards, I would like to mention a few points to you. First, please keep in mind that it is very important to know to avoid any credit card mistakes. The best way to do this is to pay off your credit card balance each month. While I understand that may not be possible for everyone every month, but it should be your goal as much as possible. If you know that you will not be able to pay off your credit card this month, you should consider whether or not you should use your credit card to purchase something. Next, you should remember when you use your credit card, you have to repay that money. If you do not pay off your credit card each month, then you will be charged interest for the balance that is left on the credit card.

When looking for credit cards, you will find that there are many different types available to you. It can become overwhelming when you are trying to select the proper credit card for you at this time. You should understand that your needs may change over time and the credit card you select today may not be the same one that works for you in six months. Consider what it is that you really want from a credit card and how you plan to use it. If you plan to pay off your credit card each month, the interest rate may not be as important to you. If you plan to carry a balance, then the interest rate is incredibly important. You may be interested in the other benefits that a credit card may offer you.

11 Top Airline Credit Cards

When you are considering airline credit cards, you should be sure to check out these credit cards.

Chase Sapphire Preferred Card

One of the airline credit cards you should consider is a Chase Sapphire Preferred Card, which has an interest rate varying from 17.49 percent to 24.49 percent. You can earn 60,000 bonus points once you spend $4,000 on purchases within the first three months of having the account open. That equals about $750 towards travel when you redeem through Ultimate Rewards. You gain 2 times the points on travel and restaurants and 1 point for each dollar spent on other purchases. You can also earn 5 times the points for Lyft rides through the month of March of 2022. When you redeem your points through Chase Ultimate Rewards, you get 25 percent more value from them. This card also offers unlimited deliveries and reduced service fees with DashPass, a subscription service of DoorDash.

Discover it Miles

Discover It Miles credit card is another one of the top airline credit cards you should consider. This card gives you an unlimited bonus of matched miles at the end of your first year. If you earn 10,000 miles, Discover doubles it so you have 20,000 miles, which is equal to $200 towards your travel. You also earn 1.5 miles for every dollar you spend on purchases. The miles you can earn are unlimited and this card does not have an annual fee. There is no limit to the dates for which you can use the miles. If you do not want to use your miles for travel, you can simply get cashback.

The Discover It card has a mobile app that gives you quick access to your account, including the ability to freeze your account. This app also gives you a free credit score and reports. This card also protects you from fraud by giving your alerts if your information is used on fraudulent websites. You can activate this service for free. This card comes with a variable interest rate from 13.49 to 24.49 percent.

Capital One Venture Rewards Credit Card

The Capital One Venture Rewards is another one of the airline credit cards that you should consider. You can earn unlimited 2X miles on every purchase. You get a 50,000-mile bonus once you spend $3,000 on purchases in 3 months from opening your account, which is $500 towards travel. The miles never expire and there is no limit to how many miles you can earn. This card does not have an annual fee for the first year, but then it is $95 every year thereafter. It has a variable interest rate of 17.24 to 24.49 percent.

Delta SkyMiles Blue American Express Card

The Delta SkyMiles Blue American Express is another one of the airline credit cards for your consideration. It does not have an annual fee. You earn 2 times the miles for every dollar you spend at Delta. You also earn 2 times the miles for every dollar spent at restaurants and 1 mile for every dollar you spend on all other purchases. This Delta card gives you a bonus of 15,000 miles after you make $1,000 worth of purchases within the first three months of opening your credit card account. There are no foreign transaction fees with this card. It has a variable interest rate of 15.74 to 24.74 percent.

Delta SkyMiles Gold American Express Card

The Delta SkyMiles Gold American Express is another one of the airline credit cards for your consideration. It does not have an annual fee for the first year and then $99 after that. You earn 2 times the miles for every dollar you spend at Delta, restaurants, and grocery stores. Then you earn 1 mile for every dollar you spend on all other purchases. This Delta card gives you a bonus of 60,000 miles after you make $2,000 worth of purchases within the first three months of opening your credit card account. You also earn another 10,000 miles on your first anniversary. It has a variable interest rate of 15.74 to 24.74 percent.

United Explorer Card

The United Explorer Card is another one of the airline credit cards for your consideration. It does not have an annual fee for the first year and then $95 after that. You earn 2 times the miles for every dollar you spend at restaurants and hotels. You earn 2 miles for every dollar you spend with United and 1 mile for every dollar you spend on all other purchases. This United Explorer card gives you a bonus of 60,000 miles. You also earn another 10,000 miles on your first anniversary. It has a variable interest rate of 17.99 to 24.99 percent.

Alaska Airlines Visa Signature Credit Card

The Alaska Airlines Visa Signature Card is another one of the airline credit cards for your consideration. It has an annual fee of $75. You earn 3 times the miles for every dollar you spend on Alaska Airlines purchases. You earn 1 mile for every dollar you spend on all other purchases. This Alaska Airlines Visa Signature Card gives you a bonus of 40,000 miles and a $100 credit on your statement. It has a variable interest rate of 17.49 to 25.49 percent.

American Airlines AAdvantage MileUp Card

The American Airlines AAdvantage MileUp Card has no annual fee. You earn 2 times the miles for every dollar you spend on American Airlines purchases. You earn 2 miles for every grocery store purchase and 1 mile for every dollar you spend on all other purchases. This American Airlines AAdvantage MileUp Card gives you a bonus of 10,000 miles and a $50 credit on your statement after $500 of purchases within the first 3 months of having your credit card open. It has a variable interest rate of 15.99 to 24.99 percent.

Southwest Rapid Rewards Plus Credit Card

The Southwest Rapid Rewards Plus Card offers you 2 times the points for every dollar you spend on Southwest purchases. You earn 1 point for every dollar you spend on all other purchases. This Southwest Rapid Rewards Plus Card gives you a bonus of 40,000 points after $1,000 of purchases within the first 3 months of having your credit card open. You receive 3,000 points on your anniversary. It has a variable interest rate of 17.49 to 24.49 percent.

Southwest Rapid Rewards Priority Credit Card

The Southwest Rapid Rewards Priority Credit Card offers you 2 times the points for every dollar you spend on Southwest purchases. You earn 1 point for every dollar you spend on all other purchases. This Southwest Rapid Rewards Priority Credit Card gives you a bonus of 40,000 points after $1,000 of purchases within the first 3 months of having your credit card open. You receive 7,500 points on your anniversary. You also get $75 travel credit with Southwest each year. It has a variable interest rate of 17.49 to 24.49 percent.

Delta SkyMiles Reserve American Express Card

The Delta SkyMiles Reserve American Express Card offers you 3 times the miles for every dollar you spend on Delta purchases. You earn 1 mile for every dollar you spend on all other purchases. It does have an annual fee of $550. This Delta SkyMiles Reserve American Express Card gives you a bonus of 100,000 miles and then another 80,000 miles after $5,000 of purchases within the first 3 months of having your credit card open. You receive 20,000 points on your anniversary. You also get $75 travel credit with Southwest each year. It has a variable interest rate of 15.74 to 24.74 percent.

How Should I Compare Credit Cards?

When looking at the various credit cards, you should consider all airline credit cards as well as compare credit cards for good credit. You may also want to consider using a credit card comparison chart when deciding which card is right for you.

Some Points to Consider When Comparing Credit Cards

Make sure that you know the bank that is offering the credit card to you. It should be one that is reputable and with whom you are familiar. You want to make sure the offer is not fraudulent, or someone just trying to take your money. You should make sure that any credit card you select matches your expectations and needs. If you want to transfer a balance, it does not make sense for you to select a card that does not allow them. You should not sign up for a credit card that you do not need. This may hurt your credit score. You want to make sure that you understand the fee schedule with the card. All credit cards must disclose all of the fees that they charge and the rate of the fee.

You should make sure you pick a card that does not have an annual fee. This is a fee the credit card company charges you simply to use their card. Unless they are offering some major perks that more than pay for the fee, you should avoid annual fees. You should understand that interest associated with any card you are considering. If you are confident that you will pay off your card every month, this may not be as important to you. However, there may come a month or two with unexpected expenses and you cannot pay off your credit card, so you should be aware of the interest. If you already know you are only going to make the minimum payment, you need a card with a low interest rate.

Look at all the programs and rewards that the credit cards offer. You want to make sure you have a complete understanding of the credit card and what it can provide for you. You may have two credit cards that seem very similar and it may come down to the rewards and protections they offer. Also, you want to understand when the points expire and when you can redeem them. If there are any limitations, you want to be aware of those, also. Always read the fine print. Credit card companies must disclose everything to you, but they do not have to do it in the largest font available. It is your responsibility to read all the documents and understand what you are agreeing to.

What Are The Benefits To An Airline Card?

Airline credit cards offer some additional perks. The most common perk being the miles a card offers. The more you spend with your credit, the more miles you accrue. Typically, the credit card company and the airlines create a partnership to determine the value of a mile. The airline determines how many miles you need for a flight and when you have enough you can redeem your miles for a plane ticket, or you can reduce the cost of a ticket. You may also qualify for extra perks such as seating upgrade, early boarding, or additional tickets at a discounted price. It is important to know that if you purchase an item and gain miles, but then return the item, you may have the miles associated with that purchase removed. If you are behind in paying your credit card bill, you may not be able to use your miles.

Your miles are reflected in your statements or in your credit card account, so you should always be able to see how many miles you have. The credit card may have a mileage requirement, which means you need to accrue a certain number of miles before you can redeem your miles. You should always read the fine print to make sure you understand exactly how you can use your miles.

Conclusion

There are a large number of airline credit cards available to you today. It is important that you read all of the fine print and understand all of the details around the credit card in which you are interested. You always want to pay attention to the annual fee and any other fees that the credit card company charges. You want to make sure you make the right choice for you.

Balance Transfer Credit Cards to Keep You Balanced

A great mind once said, “The handy thing about credit cards is they’re a great way to pay off your credit cards.” We have no idea who said it but we can all agree it turns out to be very true. No wonder why it’s quoted so much. But let’s see how balance transfer credit cards fit into this nice quote and how you can use them to figure out your credit card debt.

Balance Transfer Credit Cards Defined

A balance transfer credit card allows you to transfer existing credit card or loan balances to another credit card. Typically, you include the financial details of the credit card or loan balance you want to consolidate or transfer, such as the account number(s), financial institution and transfer amount.

Along with the interest rate and potential fees, you will also need to examine the end date for the promotional period, potential rewards, cash back options, annual fee amounts and any sign-up bonuses. The ideal balance transfer credit card provides a promotional period long enough to enable you to pay off your transferred balance under the zero percent interest rate. Once the regular interest rate begins, you need to already have the transferred balance paid off. If the post-promotional interest rate is high, especially higher than your current credit card, you really need to pay that sucker off before the promotional period ends.

Credit Card Comparison: Balance Transfer Credit Cards

Let’s assume you need a balance transfer card because you only owe $1,000, but the 23 percent interest rate you got because of your poor credit rating adds way too much to the principal. You can compare credit cards on Loanry to find the best balance transfer credit cards for you.

You really need to shop around for the right balance transfer credit card to pay you’re your high-interest debt. And you must pay attention to the details to ensure you fully qualify for a promotional interest rate, plus you understand the terms you must meet to keep the promotional interest rate.

Read the fine print. Balance transfer credit cards typically have some fees attached and they may not turn out to be as cheap as you first think.

Consolidation Loans vs. Balance Transfer Credit Cards

That fact can also be true, but you have to do it right. Sometimes, you waffle between using personal loan consolidation and using balance transfer credit cards to decrease the amount you owe to credit card companies. Either of those options can reduce the principal owed, but consolidation loans tend to do it more quickly.

A consolidation loan lets you pay off all the original creditors, while negotiating a lower interest rate. It provides the funds to pay off all of the original creditors and leaves you with only one payment per month. While many credit cards in your wallet may have interest rates approaching or greater than 20 percent, you can typically land a consolidation loan with a reasonable interest rate of 10 to 15 percent.

The downside of these loans is that they tend to require a large debt for you to qualify. If you only owe two or three thousand dollars, balance transfer credit cards make a better choice. You might not get the same amazing interest rate, but you can do pretty well, plus you may land a six- to twelve-month zero interest rate.

The Balance Transfer Credit Cards Cycle Trap

I’m going to be honest with you speaking as somebody who in undergraduate opened about five or six credit cards and tried everything to pay them off. My first option was third job. My second option was balance transfer credit cards. And my third option was a consolidation loan. I’m happy to speak to you from experience that the combination of the three things worked. It took a few years, but it all got paid off and I now love living life with no credit cards. Yes, I am serious. I am also the only person I know who has none.

The danger of using balance transfer credit cards is that if something goes wrong and you cannot pay off the transferred balance, you either get stuck with a ridiculously high interest rate after the promotional period and existing debt or you have to take out another balance transfer credit card to send the balance to so you can get another zero percent interest rate to extend your payback.

I ended up with two balance transfer cards after the third job did not help me enough to kill off my original balance. I was really determined to live life debt free though. While it took consolidating my accounts to pay them off, you can benefit from my mistakes. Trust me on this one, when you see your initial credit card balance growing, either take another job so you earn more to pay it off or get the balance transfer credit card right then. Do whatever it takes to pay the sucker off on the very first promotional period. Do not add to the balance of either card. Transfer the balance and stop using the original card. Do not add to the new card either.

The trick of getting out the debt hole is to stop using credit. Live within your means. The definition of “your means” is the amount you earn each month plus your savings, your investments’ dividends and the amount in your checking. That needs to cover all of your expenses – your monthly budgeted items and the little extras like vacation.

Using balance transfer credit cards can help you get to the point of paying everything off, but you have to use them judiciously.

Obtaining Balance Transfer Credit Cards

If you get approved for the balance transfer credit card, the new bank or financial institution takes care of transferring the credit card balance to your new credit card. Other banks have you phone them or go on the Internet to transfer your balance after you receive the new credit card. You might get approved for an amount lower than the balance of the original credit card. If that occurs, you will only be able to transfer part of that debt.

Buyer Beware: Not all credit cards allow balance transfers. Carefully read the credit card offer.

Caveats of Balance Transfer Credit Cards

Many of these balance transfer credit cards include fees for using the balance transfer option. Typically, this fee gets automatically added to your balance when you transfer it. Other lenders add the fee after 60 days or more have passed. The lower the fee, the better. These fees usually range between three to five percent of your transferred balance.

Most lenders limit the transfer amount. This caps the transfer balance amount and generally ranges between $5,000 to $15,000. Most cards only let you transfer a balance once when you first obtain the card. A few let you add new credit card transfers later.

One of the qualifying items for obtaining these cards is you need to be up on your payments to the other cards. If you get behind on payments to another card, you probably won’t get a balance transfer credit card.

Even if your credit card offers cash back and/or rewards, you won’t earn these on balances you’ve transferred. Those only occur when you make new charges or purchases (which you really do not want to do).

Also, just so you know, you usually can’t open a balance transfer credit card with the same lender with which you have a different credit card. These are a little tough to qualify for since you typically need a credit score of more than 700 and timely payments.

There’s also the time factor. You can get a consolidation loan much faster. A balance transfer credit card can take days to weeks to process the transfer. You need to continue making your timely monthly payments on the existing credit card until it shows a zero balance, meaning that the transfer to the new card occurred. You need to make all payments on time. Carefully monitor your billing statements.

You really must make all of your payments on time because some lenders cancel your whole balance transfer agreement if you make a late payment.

Do not make purchases on the new balance transfer credit cards.

You need to quickly pay off the transferred balance. Adding new purchases just gives you more to pay off. Back to living within your means. You have to learn to do that. Create a budget. Stick to it. How do you do that you ask?

Budgeting and Balance Transfer Credit Cards

You need a budget. This was a major key step for me to eradicate many credit card bills. You first gather pertinent information so you can calculate your monthly income.

Use hard numbers. Include your main salary or wage job and any side gig income. Factor in money from completing surveys, doing odd jobs, etc.

Do not guess. Calculate a mathematical estimate. Use logical numbers that you have past experience earning. No assumptions. Do the math, so you can actually know what you have coming into your bank account. Budget on an average of your income of twelve months.

Here’s a tiny warning. The next step hurts. Calculate your monthly expenses. You will probably be really shocked when you actually write down every single, solitary thing you spend money on in a calendar month.

Start with your rent or mortgage payment. Add your utilities – electric, gas, water, trash, – car payment, car insurance, gas, groceries, motor oil, fitness center membership, cable or satellite, cell phone, dining out, credit cards, loans and savings. Haul out your checkbook, PayPal account statements, credit card statements and bank statements to examine closely where you spent your money for an entire twelve month period.

You do this both to create an accurate set of expenses and to catch the one or two semi-annual or annual expenses you have. You may pay a mortgage every month, but your property taxes and property owner’s association dues once per year.

Depending on your personal situation, you may have more than the above expenses to include, such as:

  • clothes,
  • school supplies,
  • household sundries like lightbulbs and cleaning materials,
  • pet supplies and pet care,
  • home or car repairs and maintenance,
  • medical and dental bills,
  • online purchases/shopping,
  • entertainment,
  • online subscriptions,
  • child support and alimony,
  • your children’s allowances,
  • gifts for birthdays, holidays and weddings,
  • church tithes and charity donations.

The next fun part is prioritizing your expenses. You need to divide things into categories that divide expenses into negotiable and non-negotiable expenses. One Budgetry writer suggests these for “Non-Negotiables”:

  1. rent and car payments,
  2. credit cards and utilities.

Things like groceries, gas, clothing and savings fall into the “important” category. You really cannot do without them, but if you had to you could totally reduce them or cut them out except food. You could walk to work and errands. Certainly no person needs new clothes every month. You do need to save money every month, but if you had to miss a month, you could.

The optional category is full of things people think that they really need, but you could absolutely do without. These include cable or satellite television, high-speed Internet and their cell phone plan. You can cut the cord to TV and choose between high-speed Internet and the cell phone with a data plan. Pre-paid plans typically cost less. The completely negotiable, therefore unneeded, items include entertainment and shopping. You do need to have money set aside for medical expenses and repairs to your car or home.

Your credit cards qualify as non-negotiable because you have to make at least the minimum payments each month in order to keep your credit score healthy. You need to make the higher than minimum payments when possible. Only by doing this will you ever qualify for a balance transfer credit card to help eradicate your debt.

Reducing Your Expenses

Trust me, if you have hit the point where you actually need a balance transfer credit card, you have hit the point that you need to reduce your expenses. You need to prioritize expenses to dig yourself out of that hole. You might have to cut things out that you currently purchase. That does not mean doing without. It means cutting down on your consumption of the item or replacing it with something else. Try these ideas to save money.

I admit to a total love of Starbucks and an affinity for pumpkin spice lattes. (Not one word about how basic that seems.) I could drink one a day. That would cost about $35 per week. However, the sweet folks at Starbucks released pumpkin spice latte K-cups this year. I bought those suckers and yum. A pack of nine or 18 costs a tiny fraction of the coffee shop version. The taste is the same, but a nine pack costs $11.99. That shaves off $23 per week. Look at that $100 I freed up in my monthly budget.

Save on ATM fees by pulling out cash at bank. Visit the teller window.

Cut the cord to your cable or satellite TV plan. At least reduce your plan level. Make a complete list of every show you watched all the way through for one week. No cheating. You have to watch it start to finish. Now, make a list of the channels on which those shows played. It is probably five or less.

Check the list of plans your provider offers. You can probably reduce the tier of service to which you subscribe. You’ll save about $20 typically.

Okay, if you like one of the premium channels like HBO, you can still reduce your tier and still watch it. You just purchase HBO online as a standalone station. You stream your shows on your TV, computer and tablet. It costs $14.95 per month.

You could cut the cord totally and use the free version of Vudu and $5.95 per month Hulu to access a multitude of entertainment options. Other options include Amazon Prime Video or Netflix. You save about $50 per month.

Switch to a more reasonable cell phone plan. Shop around for a new carrier, especially if you have a pre-paid plan or your contract expiration is coming up. You can stick with your carrier, but study all of the plans offered. You can typically reduce only the amount of high-speed. That could save you about $20 per month.

How to cut back on various types of expenses

Budgeting the Balance Transfer Credit Cards

This is not the same thing as budgeting your expenses every month. You need to budget the card’s payments all the way through the repayment. Do this for each card you examine before applying for any.

Credit card interest rates and the promotional period can make all the difference. One card may give you a six month zero interest period, then transition to a 15 percent interest rate. Another card might give you a one year zero interest rate, but jump to a 25 percent interest rate afterward. You need to determine which one actually costs you less and how much the card will cost you each month. Also, calculate the transfer fee on each and add that to it. You will find the best balance transfer credit cards this way.

Also, examine the pay off costs of a regular credit card with that has a lower ongoing interest rate. That could turn out to be the least cost scenario.

Other Reasons to Obtain Balance Transfer Credit Cards

Growing debt isn’t the only reason to obtain a transfer balance credit card. You may have grown unhappy with your current credit card company. Before 2009, your credit card company could spring changes on you randomly. They could raise your interest rates or tack on fees or something else, but in May of 2009, Congress passed the Credit Card Accountability, Responsibility and Disclosure Act. Now, your card issuer has to provide 45 days advance notice before it can increase your rate, fees or make any other significant change. Their notice provides you the option to cancel the card. You might also decide to keep it or to transfer the balance to balance transfer credit card.

But, wait. There’s more. One of the five most common situations for choosing balance transfer credit card might fit you.

  • You typically pay your balance in full, but currently cannot. The introductory period of the zero percent interest rate saves you being charged interest while you change your income.
  • You always carry a balance. Zero or low-interest lets you save money.
  • Or you need a rewards card that lets you earn cash back on new purchases. You could land a card that offers you the world.
  • You carry a balance on multiple credit cards and want to consolidate your debts. This is very common and works if you have a small amount you owe to credit cards.
  • You want to improve your credit score. You can improve your credit utilization ratio quickly by transferring the balance to a new card.

Balance Transfer Credit Cards for Those with Bad Credit

Here’s the truth. If you have a low credit score, let’s say of 580 or less, you probably won’t get a balance transfer credit card.

The exception is if you have defaulted on an existing credit card and that lender wants to bribe you into paying them. They will offer a temporary lower interest rate on a new credit card and transfer the balance onto it with a hefty fee. The card typically starts out with no available credit. You must make your payments on time and more than the minimum monthly payment to pay it off. The only way to ever access the full amount of available credit on these cards is to pay off the original debt.

You also may luck out and find a secured credit card that you can obtain with bad credit. Some lenders let you provide a security deposit of $200 to $300 in order to obtain twice that amount. You will still have a maximum credit limit and it will not exceed what your credit score’s maximum would signify it should.

If you file for bankruptcy, it will take seven years for it to fall off of your records. During that time, you will find it hard to get any credit card or loan at all. If you have a debt that you could not include in your bankruptcy and were hoping to get a balance transfer credit card to reduce it, this is unlikely.

Using Loanry to Find Balance Transfer Credit Cards

You could consult an online credit card comparison chart, but instead, why not obtain results tailored to your needs? Visit Loanry.com to fill out a short form that provides your name, location and last four digits of your Social Security Number. You’ll get back a list of potential lenders that suit your situation and credit score. You can save time and protect your credit score using this method. It does not create a hard hit to your credit report, so you are left to apply for your credit cards from the lenders that offer you the best chance at approval.

Final Thoughts

If you’ve considered refinancing your credit cards and loans using consolidation loans and it does not fit your situation, try balance transfer credit cards. You can find a credit card that lets you transfer the balance of one or more other cards and/or loans to a single, low-interest rate credit card. Some of these may have zero interest rates for a promotional period. Nab one if you can and if you genuinely need it. To keep your credit situation healthy, you should never simply take out a loan or credit card just because you can. Manage your credit wisely. This builds the best credit score.

How to Find Credit Cards for Borrowers with Bad Credit

Being in debt is one of the worst fears many people have because of the negative consequences it has on their reputation. Besides being listed in financial institutions as an unfortunate debtor, you are unlikely to get access to loans to sort out your financial goals. To make matters worse, you may have made the wrong financial decisions to have led to bad debt. Still, there comes the point where you will need a loan despite having a bad debt record. Getting yourself out of such a mess can be daunting, especially if you don’t have access to professional financial advisors. The good news is, you can still get good credit cards for bad credit from credit card companies.

How to Apply for Credit Cards for People with Bad Credit

Credits cards for bad credit scorers are quite many, but they come with conditions. You need to apply using the following steps:

Being Familiar with Your Credit Score

If you keep receiving rejection alerts after applying for a credit card, it means your score is 580 and below. You will be tempted to make multiple card applications, only to realize the negative effects they have on your score. Avoid this at all costs.

Find a Card That Is Compatible to Your Score

Accepting your current credit score is the first step towards healing. Most lenders already have a credit card comparison chart that shows the type of credit you will need to qualify. You can log into selected sites with your free score to determine where it lands on the graph. You can also compare it to the recommended range. That way, you will avoid risking your credit score further.

Another thing you can do is fill out the form below and you can get offers within seconds. These offers are unique for your situation so we will connect you to companies from which you have a chance of getting a credit card. Start here:


Submit Your Application

After matching your credit score with your credit card of interest, it is time to hit the “apply button”. You will need to prove your full names, home address, phone contact, and email address. Some lenders may also request for proof of income and your social security number.

Provide Your Security Deposit

Lenders that issue secured cards may require you to provide your security deposit. On average, you will need to part with $200 to $300 to secure your card. So, if you deposit let’s say $1,000, you will enjoy a credit limit of $1,000. They will also recommend a preferable repayment method to help you secure your card.

Wait for Your Card

You can only secure a credit card upon approval by your potential lender. Once you get it, you can improve your credit score by using it immediately. Always ensure you repay your debts before the due date to avoid lowering your score.

The Conditions Credit Card Companies Set for Borrowers with Bad Credit

Having a reputation for bad credit does restrict you from accessing or to compare credit cards online. However, you need to understand the pros and cons of obtaining a credit card to sort your financial situations. You will come across plenty of credit card companies that are willing to issue one at a reasonable rate. While this may seem convenient, you need to be familiar with most terms and conditions they are setting. Here are some of them;

Credit Score

A credit score is a rating tool that determines your credit history after exploring many options. Some companies may use the following parameters to assess it.

Credit Rating

A credit card company can easily judge your ability to pay off debts after evaluating your history. In most cases, you will have higher chances of getting one for having a good reputation. If you are a diligent debtor that honors the terms of payment, then you have higher chances of receiving an approval. It means you can pay your dues in full, and on time. Your record is available in the database of your previous lender or credit reporting companies, so retrieving it shouldn’t be hard.

An Excellent or Good Credit Score

Your potential lender can determine whether you have a good or excellent credit score. For instance, if your rating ranges between 670 and 740, then you are a good credit scorer. If it goes above this, then you are an excellent credit scorer. At this point, you are able to pay off your bad credit from your income without breaking a sweat. Your lender will also assess your monthly income to determine how disciplined you are when paying your debt. More so, it may reward you with bonuses for honoring your promises.

Fair Credit Score

If your credit score is between 580 & 669, you are an average credit scorer. Of course, you can still apply for credit cards with hopes of getting good feedback. However, your lender may decline your request depending on their policies. Being in this category means you may have failed to honor your payments in full, in the past 24 months. It gets worse when the bad debt has accumulated to higher amounts, prompting the disapproval from your potential lender.

Bad Credit Score

A score of 580 and below is termed as a bad credit score. If you fall under this category, it means you have failed to honor your credit obligations. At this point, you keep getting alerts to honor your debts from your previous lenders. As a result, the credit bureau will list you as a bad debtor to warn other credit card companies from conducting businesses with you. Your chances of getting an approval from your lender are quite low.

Being listed as a debtor with bad credit has limitations. You may have failed to meet your obligations after being declared bankrupt or after getting reports from debt collectors. It is normal to find yourself in this predicament, which is why you should remove yourself from this category as soon as you can.

The shortcomings that come with a bad credit history are quite many. You will be turned away by many lenders because you are a credit risk. If you are lucky to get a positive response, then you will need to honor special terms. Some of them may offer a secured card which requires you to deposit a specific amount just in case you bail out on them. Still, this doesn’t guarantee an approval even if you place a deposit.

In your quest, you may come across lenders who are quick to offer unsecured credit cards for people with bad credit. The terms and conditions they may set may seem unrealistic. Do due diligence to avoid regretting in future, before applying for one.

Zero Credit Score

Some lenders may receive credit card requests from people who have zero credit score. Potential lenders may honor their requests after examining all the odds.

Things that Can Affect Your Credit Score

Having a bad credit score not only taints your image as a borrower, but it also limits your chances of acquiring the best credit card to get with bad credit. Here are some things that can affect your credit score:

Defaulting on Payments

You may be facing inevitable financial challenges that could lead you to a bad credit score. Your lender will rate you based on your financial history for the past 7-10 years. If it falls anywhere below 580, you will find it hard accessing loans in future.

How You Use Your Credit

When applying for a loan from banks or credit unions, you will need to state your reasons. If you are lucky to land one, ensure you fulfil the purpose of the loan. Because it takes up to 30% of your score, you will need to avoid over-utilizing your credit cards. This will save you the heartache of explain why you failed to keep your promises.

Filing Bankruptcy

Most people who are in deep financial debts are quick to file for bankruptcy to avoid getting a bad record. Well, it is one of the best ways to ensure you retain your assets, but your chances of landing loans will be limited. At that moment, you may fail to see the harsh consequences it will have on your credit score. Remember, credit bureaus will retain your record for use against you in future. You can only declare bankruptcy when your situation goes out of hand.

Deed-In-Lieu

You lender may require you to submit your title deed or car log book as collateral in case you default your payment. Failure to pay your loan can lead to automatic confiscation of your property. If they resell your property to service the loan, you risk losing up to 125 points. This can damage your history as a borrower who looks forward to attaining a good or excellent credit score.

It is possible to rethink your decision of repaying your loan at less than what you had requested from the creditor. This can make you lose up to 125 points as a creditor.

Like any other reporting tool, credit bureaus can make errors. To avoid being listed as a bad debtor, always make regular checks on your credit history. Correcting the errors in good time will prevent you from getting a score you never thought of having.

Being a guarantor to a borrower with a good credit score can boost yours as well. It means you are responsible for the financial decisions they make. If the latter happens, you will have a hard time boosting your scores.

Personal Loans for People with Bad Credit

Being in the list of people with bad credit is not only demotivating, but it also takes a toll on your mental wellbeing. Worse still, you risk getting rejected by many financial borrowers. Now, you are left with one more option; applying for a personal loan. This option sounds good, but it can be a drop in the ocean if you don’t examine the benefits and shortcomings.

The Benefits

Zero Collateral Risk

Most financial borrowers require you to present a fixed asset as security for your loan. It is easy to lose your priced property for failing to pay off debt. Fortunately, you can still get a personal loan after proving that you have a good job. This gives you the chance to retain your assets because you have the ability to pay off your loan.

Duration to Clear Your Debt

Have you have ever found yourself in a situation where you are unable to pay your bills on time? Obtaining a personal loan can be good for you. Unlike other institutions, your personal lender may give you a grace period of one or three years to repay your loan. Always remember to clear your debts within that period to prove your credit worthiness.

Risk-free

Taking a loan from a borrower is easy, until you fail to use it accordingly. If you take a mortgage loan and fail to honor it, you will be face fraud charges. Getting a bad reputation for failing to repay your loan isn’t the only thing you should be worried about. A possible jail term is the last thing you want to face even in your current state. To prevent this from happening, you will need a personal loan for people with bad credit.

Improved Credit Score

Being an excellent credit scorer even if you are obtaining a personal loan can make a good impact on your history. Credit bureaus will assess your history based on many credit accounts under your name. If it proves that you are an excellent credit scorer, then your personal lender won’t have a problem with you. When your credit score is over 750, you will have the chance to obtain more at a good interest.

Helps You Set Up An Emergency Fund

You have so many bills on your hands that you hardly find some money to save for a rainy day. Personal loans allow you to establish an emergency fund to help you meet your future financial obligations.

Fewer Paperwork

Before obtaining a loan, you will need to present relevant documents. These lending institutions want to know you in person before offering the loan. A person lender, on the other hand, may only require your picture ID, proof on income, and your bank account number to process your loan. If you are the type of person that hates paperwork, personal loans could be the best option.

 Little-to-no Hidden Charges

You may have come across lenders with enticing loan requirements, only to realise the hefty hidden charges. Of course, the interest accumulates after a specific period, but it is important that they should let you know before offering their loan. Personal loans for people with bad credit come in handy in such situations. They will only require you to pay the interest rate, then let you off the hook after paying in full.

Zero Penalties

Most lenders don’t like the idea of servicing your loan before the due date. They may penalize you for this. But with personal lenders, you can pay off your debt early.

The Shortcomings

While personal lending may seem like a perfect solution for people with bad credit, it comes with specific shortcomings including:

Debt Consolidation

After being listed as a credit risk, you will be tempted to borrow a personal loan to offset your payment. In the end, you are likely to become a financial wreck because you will be compelled to repeat the same mistakes you made in the past. You are probably gambling with varying interest rates, which is why you need to get yourself out of it. Try deactivating your credit cards once and for all.

Limited Access to Bigger Loans

Your credit reputation is at stake because you have failed to meet the credit card requirements. Your personal lender may not trust you with bigger loans even if your credit scores keep improving.

Higher Origination Fees

Once you submit a loan request, the lender may ask you to pay between 1-10% fees to process your loan. Expect to pay a higher origination fee if you fall in the category of bad credit score. Remember, this only applies to specific credit card companies.

Submitting Full Payments

With personal loans, you will need to pay the full amount before it is due.

Understanding Personal Loan Interest Rates

Did you know that personal loan interest rates keep changing each year? Well, understanding the rates will determine your creditworthiness, the due date, the amount, and the lender’s policies. Currently, the loan interest rate ranges between 10% and 28%. Here are a few facts you will need to consider before applying for a credit card for people with bad credit:

By Lender

Generally, lenders charge different interest rates on unsecured loans after assessing specific facts on your profile. The standard rate falls between 5% and 36%, though leading financial institutions may offer competitive rates. Still, you can access other personal lenders who accept people with bad credit score. Understanding the relationship between the interest rate and the lender’s policies will help you gauge yourself.

By Credit Score

Credit score is one of the biggest determinant of annual percentage rate on unsecured personal loans. If you fall under an excellent credit score category, you will enjoy lower interest rates (usually between 10% and 12). To be on the safe side, you can apply for a 0% transfer credit as opposed to a personal loan to evade charges on interest.

If you are an average credit scorer (less than 580), you will be charged a higher interest rate between 18% and 36%. Worse still, you may fail to qualify for the conventional personal loan because of your bad credit scores. It does not go without saying you can still achieve APRs as high as 100%. You can imagine your recurring bad debt situation that never seems to end. It is advisable to request for a personal loan from a local credit union or a non-profit lending institution to save you the heartache of endless debt.

A Good Interest Rate vs a Bad Interest Rate

Interest rates on personal loans may be good or bad depending on the purpose it will serve, the balance, and the duration. Because you are approaching different lenders, you need to be prepared for varying personal loan rates. On average, a lending institution may a loan range between 10% and 28%. If it is higher than that, it is a bad interest rate. Servicing the loan with interest may seem difficult if you receive higher rates.

One way of avoiding a bad interest rate is by improving your credit score. Approach different lenders and find ways to service your loan to maintain a good record. Remember, they can only lower the rates if you prove that you are credit-worthy.

Extra Pointers that Affect Your Personal Loan Interest Rate

Debt to Income RatioDebt to income ratio infographic

Debt to income ratio is the percentage you incur after calculating the pre-tax your monthly income. For instance, if your pre-tax monthly income is $6,000, and your debt payments are $1,200 per month, your DTI will be 50%. A lower DTI ranging between 45% and 35% is better than 50%. Lenders may view a DTI of 50% badly because you are likely to default your loan repayment.

The Length of the Amount of Loan

Generally, higher loans with lengthy terms attract higher annual percentage rates. Your chances of repaying the loans over a long period of time are limited, especially when you are the type of person with bad credit. Offering a higher amount puts you in a higher risk of defaulting even if your monthly income proves otherwise. Moreover, they attract higher APRs than short-term loans.

Credit History for the Past Two Years

As expected, your lender will consider other factors before tailoring their loan interest rate. Your credit score is the primary tool they will use to determine your ability to repay your loan. You will meet lenders with strict credit restrictions because of your credit score. If you have received are negative credit scores in the recent past, you will have limited chances of getting a good interest rate.

Current Employment Status

Unlike some institutions, personal lenders depend on your monthly income or household income to determine your rate of interest. It calculate your ability to pay based on the tax returns, pay stubs, or other parameters. The minimum annual income for an average borrower ranges from $20,000 to $40,000.

Conclusion

Being listed under people with bad credit isn’t the end of the world. You can still access good credit cards only if you meet specific requirements. Of course, this cannot happen overnight. You will need to evaluate what led you to the credit problems you are currently facing. Once you have identified the cause of your financial mess, you can work on improving your credit score. Be conversant with the credit history records in order to come with the best financial decision. Understanding the financial implications of your action will save you from making similar mistakes in future. Remember, many people have gone through this, and come out stronger than they were. Why not you

Credit Card Statistics That Will Shock You: Data 411

Choosing the right credit card is like choosing the right automobile, or your favorite restaurant. It won’t be the same for everybody, and what’s important to you often changes over time as well. Sometimes your circumstances evolve; sometimes your goals aren’t the same as they were before. Maybe you’d simply like to have several different options. That way you can choose each time based on the needs of the moment. Credit card statistics can come in handy to help you choose.

Credit Card Statistics – All You Need to Know

This is the 21st century, and finding the right website to compare credit cards isn’t that difficult. It’s knowing what you want and need from a card that can make things tricky. Let’s walk through some credit card statistics and some of the most common options presented on any credit card comparison chart and see if we can help make your choices a bit more clear.

It’s not about me deciding what’s best for you. Anyone claiming they can do that is either delusional or up to something. Instead, it’s about making informed choices about credit cards or any other form of loan or debt you choose to utilize. It’s about using credit card statistics to better decide what will help you move closer to both your short-term and long-term financial goals.

What’s Your Credit Score?

One of the biggest factors in considering what sort of credit card makes the most sense for you – and possibly which options are even available to you – is your credit score.

Most of us have a vague idea what a credit score is. But too many Americans aren’t clear on where it comes from or whether or not we have any control over it. Your credit score is a 3-digit number which acts as a “snapshot” of your overall credit worthiness. Unlike your full credit report, a credit score doesn’t tell lenders who you’ve owed or why your score is what it is. On the one hand, it’s a very limited picture of you as a borrower. On the other, it doesn’t require extensive research or consideration and offers a simplified way for lenders to quickly gage whether or not someone is a good risk.


The most common credit score scales utilize a range of 300 – 850, with higher numbers reflecting a stronger credit history. Many credit card companies use this as a primary determinant of what sort of card you qualify for – the interest rate, the credit limit, and possible additional benefits and rewards.

What Is a FICO Score and How Does It Impact My Credit Card Options?

The original three-digit “credit rating” is the FICO score, named for the company which created the system. Here are the general categories indicated by your FICO score and likely impact on your search for the right credit card.

You can learn more about what goes into computing your FICO score in this piece from CNBC. It has graphs and everything.

What Is a VantageScore and How Does It Impact My Credit Card Options?

A very similar credit score system also commonly referenced by lenders is your VantageScore. This system was developed by the three major credit reporting bureaus – Experian, Equifax, and Transunion. It’s computed slightly differently than your FICO score. But the basic idea and outcomes are close enough that we don’t always bother distinguishing between the two. If you’re weighing your options using a credit card comparison chart or other website to compare credit cards, however, it may be helpful to notice which scale is being used so you can better identify your credit card options and better understand which credit card statistics best apply to you.

Credit Scores and Your Credit Card Choices

There are a few things these numbers tell us, and a few related credit card statistics worth noting along with them.

First, according to the most recent FICO figures (above), 67% – over two-thirds – of Americans have a “Good” credit rating or higher. If you prefer to use the VantageScore model, 61% have a “Good” rating or higher, which is still an impressive majority.

Second, Americans as a whole are trying to pay down their card balances. The first quarter of 2019 saw a $22 billion decline in credit card balances after a lengthy period of gradual increases. Balances are still pretty high, however, depending on whose credit card statistics you consult. Experian, one of the three major credit reporting agencies, figures an average credit card debt of $1,760 per person (counting only adults with a credit history). The Federal Reserve of New York computes an average balance of just over $1,900 for every American with a store-brand credit card of some sort.

Third, not everyone is succeeding at paying down their credit cards. Other methods of computing outstanding credit card debt show much higher average balances – over $5,000 average credit card debt per cardholder, by some reckonings. This strongly suggests that while some Americans are paying their cards down or off, for every two or three who do, someone else’s balances are spiraling out of control. Eliminate Americans with little or no balance from the mix, and suddenly our credit card statistics change dramatically.

Your Ultimate Guide to Credit Card Refinancing

There’s an old joke about three guys sitting in a bar. Suddenly, Bill Gates (or Warren Buffet, or any other figure famous for being wealthy) walks in. They begin thanking him profusely and offering to buy him drinks. When he asks why, they explain that before he came in, their average income was around $52,000 a year. Now that he’s there, the average income in the room is closer to $25 billion, so of course they can afford to get the first few rounds.

That’s why average credit card debt can seem so low if measured across every adult, or even every adult with a card. It’s much higher if we consider only adults with a balance. Credit cards are tricky – those who use them responsibly can derive great benefits from the flexibility they offer, while those who don’t quickly find themselves in trouble. You should make every effort to understand the pros and cons of credit cards before signing up! In this case, looking at credit cards statistics can tell you a lot.

Fourth, at the same time, the average credit limit on our collective cards continues to rise. (There is a rise of average credit score, topping 700 in the past year, which I suppose could be related.) It remains to be seen how this plays out, but credit card statistics offer at least some positive news in the face of largely troubling figures for student loans, auto loans, and other forms of debt.

I say some positive news because not all of the latest credit card statistics are positive. That brings us to…

Fifth, Americans who are behind are getting further behind. The rate at which 30 – 60 day delinquencies became 90+ day delinquencies has been steadily creeping up since 2017. Obviously, this is the sort of thing which severely damages your credit rating. It also impacts future efforts to secure an auto loan, a mortgage, or any other sort of personal loan. While you don’t want to only make minimum monthly payments when it comes to your credit cards, you should prioritize at least making those minimum payments to avoid making things even harder for yourself down the road.

Since we’re on the subject, here are a few other common credit card mistakes you should avoid. I want you on the right side of those credit card statistics!

How Can I Improve My Credit Score (and make it easier to get a good credit card)?

First, pay your bills on time.

I know this seems flippant, and it’s not always easy. If you don’t have the money, you don’t have the money, right? If that’s the primary reason you’re late on your credit card payments and other monthly obligations, you should seriously consider revisiting your household budget. It’s possible a bill consolidation loan or other restructuring of your debt might help you “reboot” a little. You might even find part of the solution in refinancing your home.

But severe financial difficulties aren’t always why we damage our own credit. How often are we late on payments because we don’t maintain a clear budget? Or we just lose track of things? We’re busy, and doing the bills, like balancing the checkbook, feels depressing. I get it, but it’s time to adult, my friend! Timely payments aren’t just the right thing to do – over time they establish a credit history which gives you more choices and access to funds in the future. You may never plan on borrowing beyond your house or car payment, but life is full of surprises. Wouldn’t it be nice to have some options if things don’t always go as planned?

Maybe you figure it doesn’t matter at this point because your credit history is too messed up. Maybe it is. And maybe it doesn’t matter right now. But in six months you could have a better track record than you have right now. In two years it could have already demonstrated an amazing turn-around. The key to getting somewhere is to choose the right direction and start.

How about today?

Second, don’t take out loans or cards you don’t need.

Please understand, there’s no need to be afraid to shop for the right loans or right cards. Sometimes a bill consolidation loan or a new credit card with a better interest rate can be game-changers! But make those choices because they’re the right choices for you. Don’t try to game the system based on some “quick-fix” plan you read about online.

Third, avoid maxing out your cards if you can.

Use them if you need to, but it’s better to have “available credit” in the mix. That said, if you have the self-discipline to avoid unnecessary debt, don’t close or destroy cards you’ve paid off. Put them in your safe or keep them somewhere inconvenient (but secure), but they can remain open.

From a “credit history” standpoint, the ideal is to use your available credit reasonably here and there, then pay it off consistently, even if not immediately each month.

Fourth, always be on the lookout for a chance to consolidate.

It can be a game-changer to eliminate multiple monthly payments with one lower-interest card or a small personal loan. You don’t want to get into the habit of regularly juggling debt from one source to another, but as you make your payments and improve your credit rating, your options improve. Within a year or two, you may qualify for a lower-interest card or a small personal loan from your local bank or credit union or a legitimate online lender. It’s the same idea as refinancing your home at a lower rate; it’s just that the amount is (hopefully) smaller and the process far less tedious.

 

Finally, check your credit reports and address any disparities or incorrect information.

It’s not always easy to make this happen quickly, so don’t wait until you’re buying a house or trying to start a business. Better to handle that as soon as possible. Check your credit – like, NOW!

Small Business Credit Card Statistics

Of course, individuals aren’t the only ones using credit cards for financial flexibility. Credit cards are one of the many methods used by small businesses to purchase essential inventory, keep miscellaneous expenses organized, or otherwise grow their operation. Sometimes they’re the primary means by which a new business establishes a good credit history.

Although small businesses only account for about 4% of total credit card use in the United States, that’s still around 14 million cards. Not surprisingly, small businesses tend to have higher credit limits and spend more with their plastic revolving funds. Over 15% of total dollars purchased with cards is by small business. That’s not counting, of course, dollars spent on personal credit cards as part of individual efforts to open or build small businesses.

They’re not always the best form of small business loan, but credit card statistics say they are used effectively and often in the small business world. It’s worth keeping in mind that not every small business is a repair shop or diner these days. People are running bed-and-breakfasts, driving strangers around town, freelancing their writing or graphic design, and selling stuff online. The right credit card makes each of these easier, and sometimes safer or more productive.

Still, if you’re an entrepreneur looking to start or expand your small business, explore your loan options before simply whipping out the plastic – no matter how much credit you may have. Credit cards provide a wide range of conveniences for small business owners just like they do individuals, but that doesn’t mean they’re always the ideal solution if your primary need is substantia financing or a long-term business loan. They can charge higher fees and don’t always offer terms as favorable as personal credit cards, which throws a wrinkle into the pros and cons of our overall credit card statistics.

I’m not saying don’t do it; I’m just saying make sure it’s an informed decision.

So What Credit Card Should I Get?

I wish I could tell you. I mean, I wish I knew – and I’d tell you if I knew. But the right answer for me may not be the right answer for you, and the right answer for you may not be the right answer for the next guy. Sorry about that! The best thing you can do is compare credit cards and several aspects of them so you can make the best decision.

So here are some things to consider as you look…

Maybe all you need is a credit card.

What I mean is, maybe all that matters for you is the primary function of the card. Can you buy stuff with it, then pay it off over time? Is the interest rate reasonable? Are there any hidden fees or scary wrinkles of which you should be aware?

For me, personally, all I’m looking for in a credit card is a decent interest rate, low fees, and straightforward terms. It’s a bonus if I can get it with a Dallas Stars logo or Beatles album artwork, but not essential. I don’t care about travel points or rewards or getting concert tickets ahead of the general public or whatever. When I use my cell phone, it is primarily to call people or occasionally text. I use my laptop primarily to type documents and check email. And I use my credit card to buy stuff and pay it back over the next several months.

Do you want to pay an annual fee?

It sounds like a silly question, doesn’t it? Given the option, most of us would probably say no thanks – I’ll pass on the yearly fee if given a choice. As you’d probably guess, I won’t use a card with an annual fee. Period.

So why do others choose that option?

Because cards with annual fees offer to offset that cost with their various rewards programs. You earn travel benefits or cash back or whatever else. If the annual fee is $99, but you save $3,000 in hotel discounts and rental car specials by using the card for everything, that might be a pretty good system for you.
But be honest with yourself. Avoid aspirational card-shopping. In the same way, it’s usually a mistake to buy clothes in the size you wish you were instead of the size you are, it’s usually a mistake to sign up for a card designed for the lifestyle you wish you had instead of the life you actually live.

What kinds of rewards matter to you?

If you opt for a rewards card, what’s realistic for you? It’s hard to go wrong with cash-back, as long as you use the card for purchases you were going to make either way and you pay off the balance in a reasonable time. (Don’t play the game with yourself where you buy more than you can afford but justify it because you’re earning 5% back. You’ll lose more than that in interest in a few months. Not to mention the late fees you may be setting yourself up for by going into the deep end too quickly.)

If you think a rewards card might be right for you, read the small print. I know, I know… But seriously, that’s the only way you’re going to know if the specifics really make sense for your circumstances and preferences. I realize the TV ads and mailers make it sound so obvious. Who wouldn’t want 5% cash back on every grocery store purchase?! But if it were really such a no-brainer, why do they have to spend money advertising what a great deal it is?

And no, I’m not saying it’s a bad deal. I’m saying, read the specifics. Ask questions. Keep in mind that while there are plenty of situations in which you can come out ahead AND the lender makes a reasonable profit, other rewards programs are like mail-in rebates: they’ll honor them, sure… But while they’re hoping it motivates you to buy the product, they’re also hoping you don’t actually mail in the rebate.

Of course we’re happy to help you choose the right credit card for you, but not by telling you what to do. We’ll get a little information and help you narrow down your options. We’re all about breaking down credit card statistics and reminding you of things to consider; you want magical answers, try a fortune cookie.

(Great. Now I’m craving sesame chicken while I type. Should have chosen another way to make that point, I guess…)

Oh, and by the way, we at Loanry can help you with choosing a card. Besides these articles about everything you need to know, we can also connect you with reputable card companies. Our partner Fiona selected them for you. See below:


What cards are other people happy with?

That one’s a little easier, although it still won’t give you that magical answer you’re looking for.

J.D. Power did a study about customer satisfaction with a variety of credit cards, both in terms of features and specific brands. Here were a few highlights:

  • The number one reason (47%) customers switched cards during the 12 months analyzed for the study was for a better or different reward program.
  • Now that more card users are paying attention to rewards programs, card-issuing banks are sometimes dialing  back the programs. This isn’t always to reduce benefit to users; sometimes it’s because users are only using certain benefits, so issuing banks focus on those.
  • Customers who actually understand the rewards program indicate greater satisfaction with their cards than customers who don’t. And over a third of them don’t. This is a problem for reward card-issuing companies for at least two reasons. First, confused and unhappy customers are more likely to switch cards. Second, happy customers who understand the rewards programs spend an average of over $300 a month more with the card.
  • One of the favorite perks customers report about their credit card use is getting free credit score reports. Discover, in particular, has done an impressive job promoting this feature. You’ve no doubt seen the commercials with two people on the phone with one another, not quite twins but clearly letting us know that “they’re just like me.” (Since the free credit score perk is such a winner, it’s probably no surprise that the J.D. Power study found Discover to have the highest customer satisfaction for the time period they studied.)
  • Older customers are being won over to paperless (“digital”) billing. It’s not surprising that younger consumers embrace this form of monthly accounting. But customers over 40 are not only switching to this option more and more, but it seems to increase their satisfaction with the card itself. Go figure.

Credit Card Statistics: How Are Americans Using Their Cards?

Finally, let’s look at how people are actually using that little plastic rectangle (with gently rounded edges) in their wallets or purses. Experian did a survey recently which gave us some interesting results. Keep in mind these are self-reported, and respondents could choose more than one category (so the totals are higher than 100%).

  • 68% (over two-thirds) reported they used their cards to buy the everyday stuff they needed. This suggests they could have purchased the same items with other forms of payment. But that plastic offers enough convenience to make it a regular choice. While the survey doesn’t establish this, it’s likely that many of these are the same folks who pay most or all of their balance every month.
  • 42% (just over 2 in 5) reported they use their cards specifically because of the rewards program associated with them. Note that this doesn’t necessarily mean that’s a good idea or a bad idea. Just that it’s an effective idea from a credit card marketing standpoint.
  • 37% (over one-third) use their card as an emergency cushion. This could include unexpected medical bills, car or home repair, or any other unanticipated expense. While no one likes unexpected problems, they’re one of the biggest reasons to have a credit card or two (with funds available) – just in case.
  • 32% (almost one-third) report they’re using their card(s) to improve their credit rating. Secured cards (“pre-paid” cards) are particularly effective for this if you have bad credit. But any credit card can help you build or rebuild credit simply through responsible use. Just making your minimum payment each month quickly establishes you as a better credit risk than you were a few months or a few years ago. Of course, not making that minimum payment each month does the opposite, so be realistic.
  • 31% (just under one-third) say they use the card for extra things they want. This isn’t inherently bad, but I confess it makes me a little nervous. I suppose it sounds awfully close to “impulse buying” or otherwise living slightly beyond our means. Perhaps I’m reading my own poor past choices into the response. But I’d be careful about thinking of credit cards in this way on a regular basis.
  • 16% told Experian they used their cards to pay off other debt. As we’ve discussed before, this can be a great strategy, but make sure you understand the pros and cons of personal loans vs. credit cards.

Conclusion

Hopefully, it’s helpful to know a few general credit card statistics. It can be enlightening to see how our choices and experiences compare to others. But in the end, the “best” card or the “right” card is the card that’s “best” or “right” for you.

Check out options through your local bank or other financial institution. Read through the terms of those rewards or that introductory interest rate. But before you make a decision, let us connect you with a few other options as well. It’s the 21st century – you shouldn’t be begging for credit; lenders should be working for your business. Then, you decide what you want to do. If you have questions before you even go that far, let us know. We’re always here to help.