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Tag: American Express Co

  • How one big stock-market investor is positioning for a decade of inflation

    How one big stock-market investor is positioning for a decade of inflation

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    With the threat of inflation back at the forefront for many investors, there’s one large stock-market investor positioning for it to be a decade-long phenomenon. In a note posted to the firm’s website, Chief Investment Officer William Smead of Phoenix-based Smead Capital Management, which oversees $5.83 billion in assets, said “we are loaded with inflation beneficiary stocks like oil and gas stocks and useful real estate.” The firm likes home builder D.R. Horton DHI; Simon Property Group SPG, a real estate investment trust…

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  • Southeast Asia moves closer to economic unity with new regional payments system

    Southeast Asia moves closer to economic unity with new regional payments system

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    Indonesian President Joko Widodo makes a speech during the Association of Southeast Asian Nations (ASEAN) Foreign Minister’s Meeting in Jakarta, Indonesia on July 14, 2023.

    Murat Gok | Anadolu Agency | Getty Images

    A new regional cross-border payment system recently implemented by Southeast Asian nations could deepen financial integration among participants, bringing the ASEAN bloc closer to its goal of economic cohesion.

    The program, which allows residents to pay for goods and services in local currencies using a QR code, is now active in Indonesia, Malaysia, Thailand and Singapore. The Philippines is expected to join soon.

    That’s according to each country’s respective central bank.

    The move comes after the five Southeast Asian countries signed an official agreement late last year. At the recent ASEAN summit in May, leaders also reiterated their commitment to the project, pledging to work on a road map to expand regional payment links to all ten ASEAN members.

    The scheme is aimed at supporting and facilitating cross-border trade settlements, investment, remittance and other economic activities with the goal of implementing an inclusive financial ecosystem around Southeast Asia.

    Analysts say retail industries will particularly benefit amid an expected rise in consumer spending, which could in turn strengthen tourism.

    Regional connectivity is considered crucial to reduce the region’s reliance on external currencies like the U.S. dollar for cross-border transactions, particularly among businesses. The greenback’s strength in recent years has resulted in weaker ASEAN currencies, which hurts those economies since the majority of the bloc’s members are net energy and food importers. 

    “The system will forgo the U.S. dollar or the Chinese renminbi as intermediary,” said Nico Han, a Southeast Asia analyst at Diplomat Risk Intelligence, the consulting and analysis division of current affairs magazine The Diplomat.

    A unified cross-border digital payment system will “foster a sense of regionalism and ASEAN-centrality in managing international affairs,” he added. “This move becomes even more crucial in light of escalating tensions among major global powers.”

    How it works

    By connecting QR code payment systems, funds can be sent from one digital wallet to another.

    These digital wallets effectively act as bank accounts but they can also be linked to accounts with formal financial institutions.

    For instance, Malaysian tourists in Singapore can make a payment with Malaysian ringgit funds in their Malaysian digital wallet when making a transaction. Or, a Malaysian worker in Singapore can send Singapore dollar funds in a Singaporean digital wallet to a recipient’s wallet in Malaysia. 

    Fees and exchange rates will be determined by mutual agreement between the central banks themselves.

    For now, a region-wide system like this doesn’t exist in other parts of the world but down the road, the Bank of International Settlements, based in Switzerland, hopes to connect retail payment systems across the world using QR codes and mobile phone numbers.

    “The ASEAN central banks’ effort is innovative and novel,” said Satoru Yamadera, advisor at the Asian Development Bank’s Economic Research and Development Impact Department.

    “In other regions like Europe, retail payment connection via credit and debit cards is more popular while China is well-known for advanced QR code payment, but they are not connected like the ASEAN QR codes,” he continued.

    Economic benefits

    QR payments don’t impose fees on cardholders and merchants. They also boast of better conversion rates than those set by private payment processors like Visa or American Express.

    Micro enterprises as well as small- and medium-sized businesses, or SMBs will emerge as winners from regional payment connectivity, experts say. According to the Asian Development Bank, such companies account for over 90% of businesses in Southeast Asia.

    “SMBs can avoid the expenses associated with maintaining a physical point-of-sale system or paying interchange fees to card companies,” explained Han from Diplomat Risk Intelligence.

    Marginalized individuals from low-income backgrounds also stand to benefit. As the payment system works via digital wallets and doesn’t require a traditional bank account, it can be used by the unbanked population.

    “The system has the potential to improve financial literacy and wellbeing for the underbanked population,” Han noted.

    Chinese tourist numbers in Thailand are down but they are spending more, hospitality company says

    ASEAN’s new system will also enable merchants and consumers to build a robust payment history, and provide valuable data for credit scoring, said Nicholas Lee, lead Asia tech analyst at Global Counsel, a public policy advisory firm.

    “That’s particularly advantageous for unbanked and underbanked segments of the population, who traditionally lack access to such credit assessment data.”

    Moreover, “increased non-cash transactions would allow policymakers to capture transaction data and trade flow more effectively, assuming these data are accessible,” said Lee.

    “This, in turn, could lead to better economic forecasting and policymaking.”

    Currency pressure ahead

    While strengthening payment connectivity within the region has the potential to reduce payment friction and accelerate digital transition, it could inadvertently put pressure on certain currencies, particularly the Singapore dollar.

    “The potential scenario of the [Singapore dollar] emerging as a de facto reserve currency within the region poses a challenge that ASEAN states will need to confront,” said Lee.

    We see the biggest opportunities in Indonesia, says Dubai-based supply chain firm

    “With the [Singapore dollar’s] strength and stability, both international and regional businesses may opt to hold more of their working capital in [Singapore dollars], relying on the new payment network for efficient currency conversion,” he explained. 

    If that happens, it could weaken the purchasing power of other currencies in the region and result in higher imported inflation if central banks don’t intervene.

    In such a scenario, authorities may feel the need to impose capital restrictions in order to protect their respective currencies, which could undermine the very purpose of establishing a regional payment network.

    Regulations pose another challenge.

    Central banks will have to address security and fraud issues, plus undertake the task of educating the public to embrace the new payment system, said Han.

    “These factors can collectively contribute to a time-consuming process,” he warned.

    This kind of coordinated action will require strong political will from regional leaders and it remains to be seen if ASEAN members can come together to successfully implement such an ambitious venture.

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  • American Express posts Q2 earnings beat, revenue miss

    American Express posts Q2 earnings beat, revenue miss

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    CNBC's Becky Quick reports on the company's quarterly earnings results.

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  • Goldman Sachs misses on profit after hits from GreenSky, real estate

    Goldman Sachs misses on profit after hits from GreenSky, real estate

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    Goldman Sachs on Wednesday posted profit below analysts’ expectations amid write-downs tied to commercial real estate and the sale of its GreenSky lending unit.

    Here’s what the company reported:

    • Earnings: $3.08 a share vs. $3.18 a share Refinitiv estimate
    • Revenue: $10.9 billion, vs. $10.84 billion estimate

    Second-quarter profit fell 58% to $1.22 billion, or $3.08 a share, on steep declines in trading and investment banking and losses related to GreenSky and legacy investments, which sapped about $3.95 from per share earnings. Revenue fell 8% to $10.9 billion.

    The company disclosed a $504 million impairment tied to GreenSky and $485 million in real estate write-downs. Those charges flowed through its operating expenses line, which grew 12% to $8.54 billion.

    Shares of the bank climbed less than 1%.

    Goldman CEO David Solomon faces a tough environment for his most important businesses as a slump in investment banking and trading activity drags on. On top of that, Goldman had warned investors of write-downs on commercial real estate and impairments tied to its planned sale of fintech unit GreenSky.

    Unlike more diversified rivals, Goldman gets the majority of its revenue from volatile Wall Street activities, including trading and investment banking. That can lead to outsized returns during boom times and underperformance when markets don’t cooperate.

    Exacerbating the situation, Solomon has spent the past few quarters retrenching from his ill-fated push into consumer banking, which has triggered expenses tied to shrinking the business.

    “This quarter reflects continued strategic execution of our goals,” Solomon said in the earnings release. “I remain fully confident that continued execution will enable us to deliver on our through-the-cycle return targets and create significant value for shareholders.”

    The bank put up a paltry 4.4% return on average tangible common shareholder equity in the quarter, a key performance metric. That is far below both its own target of at least 15% and competitors’ results including JPMorgan Chase and Morgan Stanley, which put up returns of 25% and 12.1% respectively.

    Trading and investment banking have been weak lately because of subdued activity and IPOs amid the Federal Reserve’s interest rate increases. But rival JPMorgan posted better-than-expected trading and banking results last week, saying that activity improved late in the quarter, and that raised hopes that Goldman might exceed expectations.

    Goldman’s results “reflect the limitations of a business mix that relies more heavily on investment banking and principal investments,” David Fanger of Moody’s Investors Service said in an e-mailed statement. “When client activity remains weak and higher interest rates are pressuring valuations, earnings decline more than at a bank with higher recurring revenues.”

    Fixed income trading revenue fell 26% to $2.71 billion, just under the $2.78 billion estimate of analysts surveyed by FactSet. Equities trading revenue was essentially unchanged from a year earlier at $2.97 billion, topping the $2.42 billion estimate.  

    Investment banking fees fell 20% to $1.43 billion, just below the $1.49 billion estimate.

    Asset and wealth management revenue fell 4% to $3.05 billion as the firm booked losses in equity investments and lower incentive fees.

    Analysts will likely ask Solomon about updates to his plan to exit consumer banking. Goldman has reportedly been in discussions to offload its Apple Card business to American Express, but it’s unclear how far those talks have advanced.

    Goldman shares have dipped nearly 2% this year before Wednesday, compared with the approximately 18% decline of the KBW Bank Index.

    On Friday, JPMorgan, Citigroup and Wells Fargo each posted earnings that topped analysts’ expectations amid higher interest rates. Tuesday, Bank of America and Morgan Stanley also reported results that exceeded forecasts.

    How Goldman Sachs failed at consumer banking

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  • The nation’s biggest banks are gearing up for more consumer struggles ahead

    The nation’s biggest banks are gearing up for more consumer struggles ahead

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    JPMorgan Chase & Co. Chief Executive Jamie Dimon on Friday said the U.S. economy was basically doing OK, even if customers were spending “a little more slowly.”

    But with rivals like Bank of America Corp., Goldman Sachs Group Inc. and American Express Co. set to report quarterly results this week, recession agita still prevails.

    For evidence, look no further than JPMorgan’s
    JPM,
    +0.60%
    own quarterly results. The bank’s second-quarter profit blew past expectations, but it set aside $2.9 billion during the second quarter to cover potentially bad loans, amid concerns that more consumers could run into more difficulty paying their bills on time as higher prices manage to stick at stores.

    That figure was well up from $1.1 billion in the same quarter last year, although still far below the billions it stowed away when the pandemic first hit. Similarly, Wells Fargo & Co.
    WFC,
    -0.34%
    on Friday set aside $1.7 billion for loan losses in this year’s second quarter, nearly triple what it was a year ago.

    The figures underscore the anxiety over the second half of this year, when many economists expect the economy to tilt into a recession. However, for the 500 companies in the S&P 500 index, Wall Street analysts still expect profit growth.

    Any downturn could be exacerbated by the pressure investors have put on companies, potentially via more layoffs and money-saving technology, to keep prices high and cut costs to replicate the abnormally large profit-margin gains they put up in 2021 and 2022. Businesses have indeed kept prices high, at least for many basic necessities, in an effort to cover their own higher costs and to pad profits.

    When Bank of America
    BAC,
    -1.89%
    reports this week, the results will narrow the lens on lending and spending in the U.S. Results from Morgan Stanley
    MS,
    -0.50%
    and Goldman Sachs
    GS,
    -0.76%
    will fill in the gaps on trading and deal-making. American Express
    AXP,
    -0.49%
    will give a more detailed breakdown of what consumers are still spending their money on, after Delta Air Lines Inc.
    DAL,
    -2.35%
    — which has a partnership with AmEx — said that travel demand remained “robust.”

    Banks shoveled more money into their reserve stockpiles in 2020 to bulk up against the pandemic’s shutdown of the economy. A year later, they started releasing those funds as the economy reopened and recovered. FactSet expects the broader banking sector to plump up its cash cushion during this year’s second quarter to account for more late loan payments or potential defaults.

    In a report on Friday, FactSet said the 15 banking-industry companies in the S&P 500 Index tracked by the firm were on pace to set aside $9.9 billion to cover losses from souring loans in the second quarter. That’s more than double the amount set aside a year ago. And if that $9.9 billion figure, based on actual and projected financial figures, ends up as the actual figure at the end of the quarter, it would mark the highest since the beginning of the pandemic and the third highest in five years, according to FactSet data.

    “The U.S. economy continues to be resilient,” Dimon said in a statement on Friday. “Consumer balance sheets remain healthy, and consumers are spending, albeit a little more slowly. Labor markets have softened somewhat, but job growth remains strong.”

    However, he noted difficulties in JPMorgan’s investment banking segment. And he said consumer savings were slowly eroding as inflation endures.

    As the nation’s biggest bank, JPMorgan has flexed its financial muscle this year, swallowing up First Republic after that bank got into trouble. But as it consolidates power and influence, building thicker armor against shocks to the economy, its financial results might not always reflect the struggles of its smaller rivals, where difficulties are likely felt more acutely. Analysts at Raymond James said that while JPMorgan remained a “best in breed” bank, its outlook pointed to “heightened challenges for smaller banks.”

    See also: Jamie Dimon says U.S. consumers are in ‘good shape.’ This evidence may prove otherwise.

    This week in earnings

    For the week ahead, 60 S&P 500 companies, including five from the Dow, will report quarterly results, according to FactSet. Two big oil companies, Halliburton Co.
    HAL,
    -2.28%
    and Baker Hughes Co.,
    BKR,
    -0.95%
    will report, as oil prices fall from levels seen last year. Results from two transportation giants — trucking company J.B. Hunt Transport Services
    JBHT,
    -0.42%
    and railroad operator CSX Corp.
    CSX,
    -0.27%
    — will also be a proxy for how much people are buying things and having them shipped. United Airlines Holdings Inc.
    UAL,
    -3.42%
    and American Airlines Group
    AAL,
    -1.68%
    will also report.

    The call to put on your calendar

    Netflix results: Hollywood shutdown, ‘slow-growth’ expectations. Hollywood’s writers — and now its actors — have gone on strike, and Netflix Inc.
    NFLX,
    -1.88%
    reports second-quarter results on Wednesday. The streaming platform will likely face questions over how much content it has left in the tank, as the strike upends studio-production schedules and leaves viewers with vast expanses of reruns. Still, Macquarie analyst Tim Nollen said that the production standstill “may ironically drive even more viewers to streaming services.”

    The writers and actors argue that the studio industry — increasingly consolidated, increasingly publicly traded, increasingly oriented around a handful of film franchises — has profited immensely while skimping on things benefits and streaming residuals. But after a decade-long rise, and a recent shift in investor focus from subscriber growth to profit growth, Netflix has emerged as one of the biggest production powerhouses in the business. And after years of flooding customers with new films and shows, it’s trying to squeeze out sales via more boring ways: things like a password-sharing crackdown and ads.

    Daniel Morgan, senior portfolio at Synovus Trust Co., said Netflix still faced a plenty of streaming competition amid “muted” subscriber growth. But Wedbush analyst Michael Pachter said investors should look at Netflix as a profitable, albeit more mature company.

    “We think Netflix is well-positioned in this murky environment as streamers are shifting strategy, and should be valued as an immensely profitable, slow-growth company,” Pachter said in a research note on Friday.

    “Even while the ad-supported tier is not yet directly accretive (we think it will be accretive over time), the ad-tier should continue to reduce churn and draw new subscribers to the service,” he continued.

    The number to watch

    Tesla sales. Electric-vehicle maker Tesla Inc. also reports second-quarter results on Wednesday. And like streaming, some analysts say the fervor for EVs has faded.

    However, they also said that Tesla
    TSLA,
    +1.25%
    had so far been immune from the malaise. And even though Elon Musk remains preoccupied with Twitter — which now faces competition from Meta Platforms Inc.’s
    META,
    -1.45%
    Threads — Tesla’s second-quarter deliveries were far above expectations. Sales are expected to be big. And one analyst said that price cuts, which Tesla has used to capture more of the auto market in China, were likely “fairly minimal” during the second quarter. But some analysts wondered what the blowout delivery figures would mean for margins. And the industry, broadly, has increasingly tested the patience of profit-minded investors.

    “We’ve now seen a market where demand is constrained, capital has been tighter, and there is less tolerance for EV related losses,” Barclays analysts said in a note last week, adding that there was a “step back from EV euphoria.”

    Claudia Assis contributed reporting.

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  • Bank of America names American Express a top pick despite consumer headwinds

    Bank of America names American Express a top pick despite consumer headwinds

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  • Goldman in talks to offload Apple credit card, savings products to American Express, source says

    Goldman in talks to offload Apple credit card, savings products to American Express, source says

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    Goldman Sachs is in talks to offload its Apple credit card and high-yield savings account products to American Express, a source told CNBC’s Leslie Picker.

    Goldman Sachs, Apple and American Express declined to comment.

    The talks come amid a broader retreat by Goldman from its largely failed consumer banking initiatives, for which CEO David Solomon has taken a great deal of heat. Last week, CNBC reported that the Wall Street giant is preparing to take a huge writedown on its 2021 acquisition of fintech lender GreenSky.

    The Wall Street Journal first reported the Goldman talks with American Express. The newspaper said there’s no assurance of a deal, nor is an agreement close.

    It would mark an abrupt reversal for the two corporate giants. In October, the Journal reported Goldman and Apple renewed their partnership through 2029. And in April, Goldman Chief Financial Officer Denis Coleman touted a deepening of the partnership.

    “This week, we announced the launch of a savings account for Apple Card users. We are excited to deepen our partnership with Apple through this additional offering and to introduce another source of deposit funding for the firm,” Coleman said at the time.

    The Journal also reported Friday that Goldman is talking about unloading its General Motors card partnership. GM declined to comment to CNBC.

    – CNBC’s Steve Kovach, Phil LeBeau and Hugh Son contributed to this report.

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  • Goldman Sachs is looking to leave Apple partnership: WSJ

    Goldman Sachs is looking to leave Apple partnership: WSJ

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    Goldman Sachs Group Inc.
    GS,
    -0.17%
    is weighing whether to leave its partnership with Apple Inc.
    AAPL,
    +2.31%    ,
    amid a broader retreat from consumer banking, the Wall Street Journal reported on Friday. The Journal, citing people familiar with the matter, said Goldman was seeking ways to hand off its Apple credit card and other initiatives from the partnership to American Express Co.
    AXP,
    +1.23%    .
    Goldman has also considered offloading its card partnership with General Motors Co.
    GM,
    +0.94%
    to American Express or another card issuer, the Journal reported. But any deal isn’t guaranteed, and would require Apple’s approval, the Journal said. Shares of Goldman Sachs were down 0.2% after hours. Shares of Apple, which ended Friday trading with a $3 trillion valuation, inched 0.1% lower after hours.

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  • Get hotel credit, room upgrades and free Wi-Fi with Capital One’s new Lifestyle Collection

    Get hotel credit, room upgrades and free Wi-Fi with Capital One’s new Lifestyle Collection

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    Capital One Lifestyle Collection

    When you book a hotel through Capital One’s Lifestyle Collection you can take advantage of the following benefits:

    • $50 experience credit for food, drinks or other activities
    • Complimentary Wi-Fi
    • Room upgrades (when available)
    • Early check-in and late check-out (when available)

    These perks only marginally improve on what you could receive when you have basic or mid-tier elite status with that particular hotel or hotel chain, but this could be a useful benefit for hotel brands you visit less frequently. The Lifestyle Collection includes hotel chains such as The LINE, Virgin Hotels, Design Hotels, and The Standard, as well as independent locations.

    The Lifestyle Collection is available to select Capital One cardholders and these bookings earn bonus rewards depending on which card you have. You can earn 10X miles for Lifestyle Collection bookings you make with the Capital One Venture X Rewards Credit Card and 5X miles with the Capital One Venture Rewards Credit Card. Venture X cardholders also can redeem their $300 annual travel credit on Lifestyle Collection bookings.

    Capital One Venture X Rewards Credit Card

    Information about the Capital One Venture X Rewards Credit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

    • Rewards

      10 Miles per dollar on hotels and rental cars, 5 Miles per dollar on flights when booked via Capital One Travel; unlimited 2X miles on all other eligible purchases

    • Welcome bonus

      Earn 75,000 bonus miles once you spend $4,000 on purchases within the first 3 months from account opening

    • Annual fee

    • Intro APR

    • Regular APR

      21.74% – 28.74% variable APR

    • Balance transfer fee

      0% at the regular transfer APR

    • Foreign transaction fees

    • Credit needed

    Capital One Venture Rewards Credit Card

    Information about the Capital One Venture Rewards Credit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

    • Rewards

      5 Miles per dollar on hotel and rental cars booked through Capital One Travel, 2X miles per dollar on every other purchase

    • Welcome bonus

      Earn 75,000 bonus miles once you spend $4,000 on purchases within 3 months from account opening

    • Annual fee

    • Intro APR

      N/A for purchases and balance transfers

    • Regular APR

    • Balance transfer fee

      0% at the regular transfer APR

    • Foreign transaction fee

    • Credit needed

    Capital One Travel Premier Collection

    The Premier Collection is a step up from the Lifestyle Collection, but it’s only available to Capital One Venture X Rewards Credit Card and Capital One Venture X Business cardholders. The upgraded benefits include:

    • $100 experience credit (or the local equivalent) to use on dining, spa, and other activities
    • Daily breakfast for two
    • Complimentary Wi-Fi
    • Early check-in, late check-out and a room upgrade (when available)

    The Premier Collection encompasses many luxury hotels you can book through Capital One Travel, such as Small Luxury Hotels, The Leading Hotels of the World and Six Senses.

    Capital One Lifestyle Collection alternatives

    American Express® Gold Card

    On the American Express secure site

    • Rewards

      4X Membership Rewards® points at Restaurants (plus takeout and delivery in the U.S.) and at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X), 3X points on flights booked directly with airlines or on amextravel.com, 1X points on all other purchases

    • Welcome bonus

      Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases within the first 6 months of card membership

    • Annual fee

    • Intro APR

    • Regular APR

    • Balance transfer fee

    • Foreign transaction fee

    • Credit needed

    If you have a premium American Express card, such as The Platinum Card® from American Express, you’ll be able to take advantage of the Fine Hotels and Resorts program (FHR) in addition to The Hotel Collection. FHR offers more robust benefits and is comparable to Capital One’s Premier Collection. Terms apply.

    Citi

    The Citi Hotel Collection is available through the new Citi Travel Portal and is open to all cards that earn Citi ThankYou points, including no-annual-fee cards like the Citi® Double Cash Card (see rates and fees). Citi Hotel Collection benefits include:

    • Daily breakfast for two people
    • Free Wi-Fi
    • Early check-in and late check-out (when available)

    For those with Citi Premier® Card and Citi Prestige® Card (no longer available to new applicants), you’ll have access to Citi’s Luxury Collection perks on top of the Hotel Collection benefits. To use either of these benefits, you’ll need to search for hotels through the Citi Travel Portal. Within the search results, eligible hotels will be labeled with Hotel Collection or Luxury Collection tags.

    Citi Premier® Card

    • Rewards

      3X points per $1 spent at restaurants, supermarkets, gas stations, and on hotels and air travel, 1X points on all other purchases

    • Welcome bonus

      Earn 60,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening. Plus, for a limited time, earn a total of 10 ThankYou® Points per $1 spent on hotel, car rentals, and attractions (excluding air travel) booked on the Citi Travel℠ portal through June 30, 2024.

    • Annual fee

    • Intro APR

    • Regular APR

    • Balance transfer fee

      5% of each balance transfer, $5 minimum

    • Foreign transaction fee

    • Credit needed

    Chase Sapphire Reserve®

    • Rewards

      Earn 5X total points on flights and 10X total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® immediately after the first $300 is spent on travel purchases annually. Earn 3X points on other travel and dining & 1 point per $1 spent on all other purchases plus, 10X points on Lyft rides through March 2025

    • Welcome bonus

      Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $900 toward travel when you redeem through Chase Ultimate Rewards®

    • Annual fee

    • Intro APR

    • Regular APR

    • Balance transfer fee

    • Foreign transaction fee

    • Credit needed

    Subscribe to the CNBC Select Newsletter!

    Money matters — so make the most of it. Get expert tips, strategies, news and everything else you need to maximize your money, right to your inbox. Sign up here.

    Bottom line

    For rates and fees of the American Express® Gold Card, click here.

    Information about the Capital One Venture X Business, Spark Miles for Business, Citi Prestige® Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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  • American Express is a top pick in a recession, Wells Fargo says

    American Express is a top pick in a recession, Wells Fargo says

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  • The best credit cards for booking a trip to Disneyland or Disney World

    The best credit cards for booking a trip to Disneyland or Disney World

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    Best credit cards for Disney vacations

    Best overall

    Chase Sapphire Preferred® Card

    • Rewards

      $50 annual Ultimate Rewards Hotel Credit, 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining, 3X points on select streaming services and online grocery purchases (excluding Target, Walmart and wholesale clubs), 2X points on all other travel purchases, and 1X points on all other purchases

    • Welcome bonus

      Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $1,000 when you redeem through Chase Ultimate Rewards®.

    • Annual fee

    • Intro APR

    • Regular APR

      20.74% – 27.74% variable on purchases and balance transfers

    • Balance transfer fee

      Either $5 or 5% of the amount of each transfer, whichever is greater

    • Foreign transaction fee

    • Credit needed

    Pros

    • Points are worth 25% more when redeemed for travel via Chase Ultimate Rewards®
    • Transfer points to leading frequent travel programs at a 1:1 rate, including: IHG® Rewards Club, Marriott Bonvoy™ and World of Hyatt®
    • Travel protections include: auto rental collision damage waiver, baggage delay insurance and trip delay reimbursement
    • No fee charged on purchases made outside the U.S.

    Cons

    • $95 annual fee
    • No introductory 0% APR

    Who’s this for? The Chase Sapphire Preferred® Card is one of the most versatile rewards credit cards, which makes it the perfect option for a trip to Disney World or Disneyland. You can redeem the rewards you earn with the Sapphire Preferred for flights, hotels, car rentals or cash back so you can cover any expenses associated with your vacation.

    Standout benefits for your Disney trip: The Sapphire Preferred card earns Chase Ultimate Rewards points, which can help you book a Disney trip in a number of ways. You can redeem Chase points for cash back, use them to pay for travel or transfer them to 14 airline and hotel partners. The Sapphire Preferred also has a variety of travel insurance and purchase protection benefits, which can save you money when things don’t go as planend.

    [Jump to more details]

    Best travel rewards card

    Capital One Venture Rewards Credit Card

    Information about the Capital One Venture Rewards Credit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

    • Rewards

      5 Miles per dollar on hotel and rental cars booked through Capital One Travel, 2X miles per dollar on every other purchase

    • Welcome bonus

      Earn 75,000 bonus miles once you spend $4,000 on purchases within 3 months from account opening

    • Annual fee

    • Intro APR

      N/A for purchases and balance transfers

    • Regular APR

    • Balance transfer fee

      0% at the regular transfer APR

    • Foreign transaction fee

    • Credit needed

    Best cash-back credit card

    Capital One Savor Cash Rewards Credit Card

    Information about the Capital One Savor Cash Rewards Credit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

    • Rewards

      4% cash back on dining and entertainment, 4% on eligible streaming services, 3% at grocery stores and 1% on all other purchases

    • Welcome bonus

      Earn a one-time $300 cash bonus once you spend $3,000 on purchases within the first three months from account opening

    • Annual fee

    • Intro APR

    • Regular APR

    • Balance transfer fee

      3% for promotional APR offers; none for balances transferred at regular APR

    • Foreign transaction fee

    • Credit needed

    Pros

    • Unlimited 4% cash back on entertainment purchases
    • Ability to redeem rewards at any amount, unlike some other cards with $25 minimums
    • No fee charged on purchases made outside the U.S.

    Cons

    • $95 annual fee
    • No introductory 0% financing offers for purchases or balance transfers

    Who’s this for? The Capital One Savor Cash Rewards Credit Card earns bonus cash back in categories that are likely to take up a good portion of your Disney vacation’s budget: Dining and entertainment. This makes it a great choice for anyone who wants to maximize the rewards they earn while at Disney World or Disneyland.

    Standout benefits for your Disney trip: The Capital One Savor card stands out because it earns 4% back on dining and entertainment (which includes theme park tickets). If you prefer to pack your lunch, this card also earns 3% back at grocery stores.

    [Jump to more details]

    Best no-annual-fee card

    Citi® Double Cash Card

    • Rewards

      2% cash back: 1% on all eligible purchases and an additional 1% after you pay your credit card bill

    • Welcome bonus

    • Annual fee

    • Intro APR

      0% for the first 18 months on balance transfers; N/A for purchases

    • Regular APR

    • Balance transfer fee

      For balance transfers completed within 4 months of account opening, an intro balance transfer fee of 3% of each transfer ($5 minimum) applies; after that, a balance transfer fee of 5% of each transfer ($5 minimum) applies

    • Foreign transaction fee

    • Credit needed

    Pros

    • 2% cash back on all eligible purchases
    • Simple cash-back program that doesn’t require activation or spending caps
    • One of the longest intro periods for balance transfers at 18 months

    Cons

    • 3% fee charged on purchases made outside the U.S.
    • Estimated rewards earned after 1 year: $443
    • Estimated rewards earned after 5 years: $2,213

    Who’s this for? The Citi® Double Cash Card is a solid card for anyone who doesn’t want to deal with an annual fee or complicated rewards program.

    Standout benefits for your Disney trip: The Citi Double Cash Card focuses on one thing, and it does it well — it earns cash back. With this card, you’ll earn 2% back on every purchase with no annual cap on the cash back you can earn. You’ll get 1% back when you buy and 1% back when you pay.

    [Jump to more details]

    Best for Bank of America customers

    Bank of America® Premium Rewards® credit card

    • Rewards

      Earn unlimited 2 points for every $1 spent on travel and dining purchases and unlimited 1.5 points per $1 spent on all other purchases.

    • Welcome bonus

      Receive 50,000 bonus points — a $500 value — after you make at least $3,000 in purchases in the first 90 days of account opening.

    • Annual fee

    • Intro APR

    • Regular APR

      20.24% – 27.24% variable APR on purchases and balance transfers

    • Balance transfer fee

      Either $10 or 3% of the amount of each transaction, whichever is greater

    • Foreign transaction fee

    • Credit needed

    Pros

    • Up to $100 annual airline incidental credit
    • Priority Pass™ Select membership
    • 25% to 75% more points for Preferred Rewards members
    • No fee charged on purchases made outside the U.S.

    Cons

    • $95 annual fee
    • No special financing offers on new purchases

    Information about the Bank of America® Premium Rewards® credit card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

    More on our top credit cards for Disney vacations

    Chase Sapphire Preferred Card 

    It’s hard to go wrong with the Chase Sapphire Preferred Card because the points you earn can be redeemed in many different ways. Not only that, but it also comes with an excellent welcome bonus, lucrative bonus categories and some other useful perks.

    Rewards

    • 5X points per dollar spent on travel purchased through Chase Ultimate Rewards®
    • 5X points per dollar spent on Lyft rides through Mar. 31, 2025
    • 3X points per dollar spent on dining
    • 3X points per dollar spent on online grocery purchases (excluding Target, Walmart and wholesale clubs).
    • 3X points per dollar spent on select streaming services.
    • 2X points per dollar spent on all other travel purchases
    • 1X points per dollar spent on all other purchases
    • 10% anniversary points boost
    • $50 annual Ultimate Rewards hotel credit

    Bonus

    Earn 80,000 bonus points after spending $4,000 on purchases in the first three months from account opening.

    Annual fee

    $95 

    Notable perks

    You can transfer Chase points to over a dozen airline and hotel partners. This includes World of Hyatt, which has several hotels near Disney World or Disneyland that only cost 8,000 to 15,000 points per night.

    Chase points are also useful for booking domestic flights and Chase partners with several airline programs that allow you to book certain routes for 10,000 points or less each way. For a family of four, it may only take 80,000 points to fly roundtrip to Orlando or Anaheim. Alternatively, Sapphire Preferred cardholders can redeem points for 1.25 cents apiece through the Chase Travel Portal, which makes 10,000 points worth $125 in travel.

    The Chase Sapphire Preferred Card is also great for the many travel protections it offers, including primary rental car insurance, trip cancellation and interruption insurance and baggage and trip delay insurance. Just remember that you must pay for your travel with your card to be eligible for the insurance protections.

    [Return to card summary]

    Check out CNBC Select’s best welcome bonuses currently available.

    Capital One Venture Rewards Credit Card 

    The Capital One Venture Rewards Credit Card is a popular travel credit card that can help you earn rewards to use for just about any travel expense. Plus, its straightforward points-earning structure means that you’ll be able to maximize the return for spending with minimal effort.

    Rewards

    • 5X miles per dollar on hotel and rental cars booked through Capital One Travel
    • 2X miles per dollar on every other purchase

    Bonus

    Earn 75,000 bonus miles once you spend $4,000 on purchases within three months from account opening.

    Annual fee

    $95

    Notable perks

    What makes the Capital One Venture Rewards Credit Card shine is how you can redeem its rewards. The simplest way to use Capital One miles is to offset recent travel purchases at a rate of one cent per mile. This allows you to shop around to find the best deal, rather than be limited to the bank’s travel portal. Plus, although tickets Disney park ticket purchases are typically classified as entertainment spending, there’s a way to redeem miles for them. The trick is to purchase your tickets through an online travel agency like Undercover Tourist or Expedia as they code these transactions as travel purchases, which means you can offset them with miles.

    To potentially receive an even greater value for your miles, you can take advantage of Capital One’s transfer partners. For example, you can transfer Capital One miles to Turkish Airlines Miles&Smiles at a 1:1 rate and book round-trip domestic award flights on United for only 15,000 miles.

    Other perks include a credit of up to $100 to cover Global Entry or TSA PreCheck® membership and two complimentary visits per year to Capital One Lounges or 100+ Plaza Premium Lounges through the Partner Lounge Network, including a lounge at Orlando International Airport (MCO).

    [Return to card summary]

    Check out CNBC Select’s best travel credit cards.

    Capital One Savor Cash Rewards Card 

    The Capital One Savor card earns bonus cash back in the categories where you’re likely to spend the most. The card offers bonus rewards for spending on Uber rides, dining, groceries, streaming services and entertainment.

    Rewards

    Bonus

    Earn a one-time $300 cash bonus once you spend $3,000 on purchases within the first three months from account opening.

    Annual fee

    $95

    Notable perks

    While there are many cards that offer bonus rewards for dining and grocery store spending, the Capital One Savor card is among the few to offer 4% cash back on entertainment purchases. This makes it a go-to option for sporting events, concerts, movies and, of course, Disney tickets.

    The Capital One Savor card charges $0 in foreign transaction fees, so it’s a great option if you’re visiting a Disney theme park in Europe or Asia. Cardholders can also benefit from a complimentary Uber One membership (through 11/14/2024) and access to exclusive entertainment events, such as the iHeartRadio Music Festival and the Capital One JamFest.

    [Return to card summary]

    Check out CNBC Select’s best cash-back credit cards.

    Citi Double Cash Card 

    The Citi Double Cash Card has no annual fee and earns a flat 2% back everywhere. If you like to keep things simple, you can’t beat that.

    Rewards

    • Earn 2% back on all purchases, 1% when you buy and 1% when you pay.

    Bonus

    None.

    Annual fee

    $0

    Notable perks

    Let’s put the Citi Double Cash Card’s 2% back on all purchases in perspective. The Disney® Premier Visa® Card — which has a $49 annual fee — only earns 2% back in Disney Rewards Dollars at gas stations, grocery stores, restaurants and most Disney locations. And the Citi Double Cash’s unlimited 2% back is double what the no-annual-fee Disney® Visa® Card earns in rewards for everyday spending.

    To put it simply, if you want to earn rewards from purchases that you can put toward a Disney vacation, the Citi Double Cash is more lucrative than the branded Disney cards.

    While the Citi Double Cash is technically a cash-back card, it earns Citi ThankYou points, which you can redeem in a variety of ways for one cent each. You can also transfer rewards to three of Citi’s travel partners: Wyndham, JetBlue and Choice Privileges. However, if you pair this card with the Citi Premier® Card, you’ll be able to transfer your ThankYou points to all of Citi’s transfer partners and potentially get more value from your points.

    Before using the card when traveling outside of the U.S., beware that it charges a 3% foreign transaction fee.

    [Return to card summary]

    Check out CNBC Select’s best no-annual-fee credit cards.

    Bank of America Premium Rewards® credit card

    For anyone with a sizeable amount of money deposited with Bank of America or Merrill (including retirement savings), the Bank of America Premium Rewards Credit Card is a stellar cash-back card.

    Rewards

    • 2X points for every $1 spent on travel and dining purchases
    • 1.5X points per $1 spent on all other purchases
    • Up to 75% bonus on rewards for eligible Bank of America Preferred Rewards members

    Bonus

    Earn 50,000 bonus points after spending at least $3,000 in purchases within the first 90 days of account opening

    Annual fee

    $95

    Notable perks

    The Bank of America Premium Rewards Credit Card comes with emergency travel benefits like trip cancellation/interruption insurance, trip delay reimbursement, lost luggage and baggage delay insurance and transportation assistance. It also comes with purchase protections like extended warranty and return protection coverage. Although there’s a $95 annual fee, it can be offset by the annual airline incidentals credit of up to $100 and Global Entry/TSA PreCheck application fee credit.

    [Return to card summary]

    Find the best credit card for you by reviewing offers in our credit card marketplace or get personalized offers via CardMatch™.

    FAQs

    How to choose a credit card for Disney?

    To choose the right credit card for your Disney vacation, you’ll need to know where you’ll be spending the most money. If you live within driving distance of a Disney theme park, earning airline miles may not be the best strategy. And if you prefer camping or packing your food, then hotel points or bonus cash back on dining purchases won’t do you much good.

    Once you know what you’ll spend the most on, you’ll have an easier time choosing the right credit card, or credit cards, to help offset your biggest expenses and reward you for your most common purchases.

    Which is the easiest Disney credit card to get?

    As with most rewards cards, the best credit cards for a Disney vacation will typically require a good to excellent score (670+ according to Experian). Secured credit cards are easier to get but often don’t earn rewards. However, a secured card could be a stepping stone to becoming eligible for lucrative card offers because it helps you rebuild and strengthen your credit.

    Which credit card is best for Disney?

    The best credit card for Disney depends on your personal situation. That said, the Chase Sapphire Preferred Card is so versatile that it’s likely to be the best choice for most people. If you need to book flights or hotel rooms, you have multiple ways of doing that with Chase points, so you can cherry-pick the best deals. And if you want to pay for Disney tickets or just put gas in the car, it’s easy to convert Chase points into cash back.

    On top of all that, the Chase Sapphire Preferred has one of the best welcome offers and is generously rewarding for all sorts of purchases.

    What are other kinds of credit cards to consider?

    Unless you have one of the Disney Visa cards and you prefer earning Disney Rewards Dollars, a cash-back credit card is a good type of card to consider for a Disney trip. Cash-back rewards are generally the only option for offsetting park tickets, food and other incidentals. If you know where you want to stay or what hotel chain you want to stay with, opening a hotel credit card can help you earn the points you need to book an award stay. And the same is true for airline miles, earning miles with an airline that serves your home airport may make sense. In that case, the right airline credit card can help save on airfare.

    You can also easily search CNBC Select’s credit card marketplace for even more options. It allows you to filter the results by the credit score you need for approval, card type and card issuer.

    Subscribe to the CNBC Select Newsletter!

    Money matters — so make the most of it. Get expert tips, strategies, news and everything else you need to maximize your money, right to your inbox. Sign up here.

    Why trust CNBC Select?

    At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every credit card review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of credit card products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best credit cards.

    Our methodology

    To determine which cards offer the best value for Disney vacations, CNBC Select analyzed over 230 of the most popular credit cards available in the U.S. We compared each card on a range of features, including: rewards, welcome bonus, introductory and standard APR, balance transfer fee and foreign transaction fees, as well as factors such as required credit and customer reviews when available. We also considered additional perks, the application process and how easy it is for the consumer to redeem points.

    Catch up on CNBC Select’s in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date.

    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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  • Buffett explains value investing: ‘What gives you opportunities is other people doing dumb things’

    Buffett explains value investing: ‘What gives you opportunities is other people doing dumb things’

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    Follow our live coverage of Warren Buffett at Berkshire Hathaway meeting.

    Warren Buffett on Saturday boiled down value investing, the strategy that has helped him amass his wealth, in one sentence.

    “What gives you opportunities is other people doing dumb things,” the “Oracle of Omaha” said at Berkshire Hathaway‘s annual shareholder’s meeting.

    Value investing typically refers to buying underappreciated stocks or businesses when others are selling them at a discount and then holding them for the long term. This approach has led to some of Buffett’s biggest investment — especially when others were panicking.

    During the 2008 financial crisis, the legendary investor bought Bank of America, which is still one of his biggest holdings. He also acquired shares of Goldman Sachs, but has since sold his stake in the banking giant.

    Buying when others were selling in fear has in part helped Berkshire return a whopping 3,787,464% from 1965 through the end of last year. That’s way more than the S&P 500’s 24,708% return in that time.

    And while Buffett acknowledges that the world is changing, he thinks value investing opportunities abound.

    “In the 58 years we’ve been running Berkshire, I would say there’s been a great increase in the number people doing dumb things, and they do big dumb things,” he said. “The reason they do it is because, to some extent, they can get money from people so much easier than when we started.”

    “I would love to be born today, go out with not-too-much money and hopefully turn it into a lot of money,” Buffett said.

    Charlie Munger, Berkshire Hathaway vice-chairman and Buffett’s long-time right-hand man, has a more pessimistic view on value investing.

    “I think value investors are going to have a harder time now that there’re so many of them competing for a diminished bunch of opportunities,” Munger said. “My advice to value investors is to get used to making less” money.

    Despite Munger’s more downbeat outlook for value investing, Buffett thinks opportunities will present themselves to value investors given the short-term view of so many people in today’s society.

    Follow CNBC’s livestream of Berkshire Hathaway’s 2023 annual meeting here.

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  • Just 5 stocks make up the lion’s share of Warren Buffett’s equity portfolio. Here’s what they are

    Just 5 stocks make up the lion’s share of Warren Buffett’s equity portfolio. Here’s what they are

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  • Apple and fintechs like Robinhood chase yield-hungry depositors as Fed rate hikes continue

    Apple and fintechs like Robinhood chase yield-hungry depositors as Fed rate hikes continue

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    Upgrade CEO Renaud Laplanche speaks at a conference in Brooklyn, New York, in 2018.

    Alex Flynn | Bloomberg via Getty Images

    The technology industry is known for innovation and spawning the next big thing. But at a time of economic uncertainty and rising interest rates, a growing piece of the tech sector is going after one of the most noninnovative products on the planet: yield.

    With U.S. Treasury yields climbing late last year to their highest in more than a decade, consumers and investors can finally generate returns just by parking their money in savings accounts.

    Banks are responding by offering higher-yielding offerings. American Express, for example, offers consumers a 3.75% annual percentage yield (APY), and First Citizens‘ CIT Bank has a 4.75% APY for customers with at least $5,000 in deposits. Ally Bank, which is online only, is promoting a 4.8% certificate of deposit.

    However, some of the highest rates available to savers aren’t coming from traditional financial firms or credit unions, but rather from companies in and around Silicon Valley.

    Apple is the most notable new entrant. Last month, the iPhone maker launched its Apple Card savings account with a generous 4.15% APY in partnership with Wall Street giant Goldman Sachs.

    Then there’s the whole fintech market, consisting of companies offering consumer financial services with a focus on digital products and a friendly mobile experience instead of physical branches with costly bank tellers and loan officers.

    Stock trading app Robinhood has a feature called Robinhood Gold, which offers 4.65% APY. Interest is earned on uninvested cash swept from the client’s brokerage account to partner banks. It’s part of a $5-a-month subscription that also includes lower borrowing costs for margin investing and research for stock investing.

    The company lifted its yield from 4.4% on Wednesday after the Federal Reserve approved its 10th rate increase in a little more than a year, raising its benchmark borrowing rate by 0.25 percentage point to a target range of 5%-5.25%.

    Fed Chair Jerome Powell speaks during a conference at the Federal Reserve Bank of Chicago on June 4, 2019.

    Scott Olson | Getty Images

    “At Robinhood, we’re always looking for ways to help our customers make their money work for them,” the company said in a press release announcing its hike.

    LendingClub, an online lender, is promoting an account with a 4.25% yield. The company told CNBC that deposit growth was up 13% for the first quarter of 2023 compared with the prior quarter, “as depositors looked to diversify their money out of traditional banks and earn increased savings.” Year over year, savings deposits have increased by 81%.

    And Upgrade, which is led by LendingClub founder Renaud Laplanche, offers 4.56% for customers with a minimum balance of $1,000.

    “It’s really a trade-off for consumers, between safety or the appearance of safety, and yield,” Laplanche told CNBC. Upgrade, which is based in San Francisco, and most other fintech players keep customer deposits with institutions backed by the Federal Deposit Insurance Corp., so consumer funds are safe up to the $250,000 threshold.

    SoFi is the rare example of a fintech with a banking charter, which it acquired last year. It offers a high-yield savings product with a 4.2% APY.

    The story isn’t just about rising interest rates.

    Across the emerging fintech spectrum, companies like Upgrade are, intentionally or not, taking advantage of a moment of upheaval in traditional finance. On Monday, First Republic became the third American bank to fail since March, following the collapses of Silicon Valley Bank and Signature Bank. All three saw depositors rush for the exits as concerns about a liquidity crunch led to a cycle of doom.

    Shares of PacWest and other regional banks have plummeted this week, even after First Republic’s orchestrated sale to JPMorgan Chase was meant to signal stability in the system.

    After the collapse of SVB, Laplanche said Upgrade’s banking partners came to the company and asked it to step up the inflow of funds, an apparent effort to stanch the withdrawals at smaller banks. Upgrade farms out the money it attracts to a network of 200 small- and medium-sized banks and credit unions that pay the company for the deposits.

    Used to be dead money

    For well over a decade, before the recent jump in rates, savings accounts were dead money. Borrowing rates were so low that banks couldn’t profitably offer yield on deposits. Also, stocks were on such a tear that investors were doing just fine in equities and index funds. A subset of those with a stomach for risk went big in crypto.

    As the price of bitcoin soared, a number of crypto exchanges and lenders began mimicking the banks’ savings model, offering very high yield (up to 20% annually) for investors to store their crypto. Those exchanges are now bankrupt following the crypto industry’s meltdown last year, and many thousands of clients lost their funds.

    There is some potential instability for fintechs, even those outside of the crypto space. Many of them, including Upgrade and Affirm, partner with Cross River Bank, which serves as the regulated bank for companies that don’t have charters, allowing them to offer lending and credit products.

    Last week, Cross River was hit with a consent order from the FDIC for what the agency called “unsafe or unsound banking practices.”

    Cross River said in a statement that the order was focused on fair lending issues that occurred in 2021, and that it “places no limitations on our extensive existing fintech partnerships or the credit products we presently offer in partnership with them.”

    While fintechs broadly are under far less regulatory pressure than crypto companies, the FDIC’s action suggests that regulators are beginning to pay closer attention to the kinds of products that high-yield accounts are designed to complement.

    Still, the emerging group of high-yield savings products are much more mainstream than what the crypto platforms were promoting. That’s largely because the deposits come with government-backed insurance protections, which have a long history of safety.

    They’re also not designed to be big profit centers. Rather, by offering high yields for consumers who have long housed their money in stagnant accounts, tech and fintech companies are opening the door to potentially new customers.

    Apple has a whole suite of financial products, including a credit card and payments app, that pair smoothly with the savings account, which is only available to the 6 million-plus Apple Card holders. Those customers reportedly put in nearly $1 billion in deposits in the first four days the service was on the market.

    Apple didn’t respond to a request for comment. CEO Tim Cook said on the company’s earnings call Thursday that, “we are very pleased with the initial response on it. It’s been incredible.”

    Apple savings account

    Apple

    Robinhood, meanwhile, wants more people to use its trading platform, and companies like LendingClub and SoFi are building relationships with potential borrowers.

    Laplanche said high-yield savings accounts, while compelling for the consumer, aren’t core to most fintech businesses but serve as an onboarding tool to more lucrative products, like consumer lending or conventional credit cards.

    “We started with credit,” Laplanche said. “We think that’s a better strategy.”

    SoFi launched its high-yield savings account in February of last year. In its annual SEC filing, the company said that offering checking and high-yield savings accounts provided “more daily interactions with our members.”

    Affirm, best known as a buy now, pay later firm, has offered a savings account since 2020 as part of a “full suite” of financial products. Its yield is currently 3.75%.

    “Consumers can use our app to manage payments, open a high-yield savings account, and access a personalized marketplace,” the company said in a 2022 SEC filing. A spokesperson for Affirm told CNBC that the saving account is “one of the many solutions in our suite of products that empower consumers with a smarter way to manage their finances.”

    Set against the backdrop of a regional banking crisis, savings products from anywhere but a national bank might seem unappealing. But chasing yield does come with at least a little bit of risk.

    “Citi or Chase, feels like it’s safe,” to the consumer, Laplanche said. “Apple and Goldman aren’t inherently risky, but it’s not the same as Chase.”

    — CNBC’s Darla Mercado contributed to this report.

    WATCH: Consumers are spending more for the same items than they were a year ago

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  • CNBC Daily Open: Don’t be fooled by big banks’ earnings

    CNBC Daily Open: Don’t be fooled by big banks’ earnings

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    Workers erect a construction barrier in front of JPMorgan Chase & Co. headquarters in New York, U.S., on Friday, Jan. 11, 2019.

    Michael Nagle | Bloomberg | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    On Friday three big U.S. banks reported better-than-expected first-quarter earnings. But investors realized this wasn’t an unambiguously good sign for markets.

    What you need to know today

    • JPMorgan Chase, Wells Fargo and Citi reported earnings Friday. All three big U.S. banks handily beat profit and revenue expectations. JPMorgan’s numbers were the most impressive, with profit surging 52% in the first quarter.
    • U.S. markets fell Friday as weak retail sales overshadowed banks’ stellar earnings. Asia-Pacific stocks were mixed Monday. China’s Shanghai Composite rose 1.21% on the back of two pieces of good news: The country’s economy is expected to expand 4% in the first quarter, and its home prices grew the fastest, month over month, in almost two years.
    • PRO Markets this week will mostly be influenced by earnings reports, writes CNBC Pro’s Scott Schnipper. One important tip: Investors shouldn’t assume all better-than-expected numbers are good — because earnings forecasts have been negative for so long.

    The bottom line

    Investors weren’t misled by big banks’ bonanza of incredible earnings.

    Yes, profit and revenue for all three banks that reported Friday rose compared with a year earlier. JPMorgan reported a record revenue of $39.34 billion, a 25% jump that beat analysts’ estimate by more than $3 billion. Wells Fargo’s revenue popped 17%, and Citi’s rose 12%.

    Investors rewarded the banks for their sterling balance sheets: JPMorgan soared 7.55% and Citi added 4.78% — though Wells Fargo dipped 0.05%, not because its numbers were bad but, I suspect, because it didn’t beat Wall Street expectations as much as the other two banks.

    Why were the figures so good? They had to thank rising interest rates, which allow banks to charge more for loans they make, while keeping the interest on saving accounts low. Banks pocket the difference, which is known as net interest income. It seems banks will continue benefiting from today’s high interest-rate environment: JPMorgan predicted net interest income will be $7 billion more than the bank had previously forecast.

    But high interest rates are a double-edged sword. Even though higher rates fueled big banks’ earnings, they also expose weaknesses in balance sheets, as Dimon himself warned. This means that regional banks, lacking the financial heft of bigger ones to cushion possible losses — that’s essentially how SVB failed — might not have such good news to share when they report earnings next week.

    In other words, what’s good for big banks’ income is not necessarily good for the economy. Indeed, data released Friday showed the economy is slowing down. Retail sales in March declined 1%, two times more than economists had expected, according to an advanced reading. Citigroup CEO Jane Fraser said on an investor call that the bank saw a “notable softening” in consumer spending this year.

    Despite the excitement over the big banks’ earnings, then, investors kept a cool head, causing the three major indexes to fall. The S&P 500 lost 0.21%, the Dow Jones Industrial Index slid 0.42% and the Nasdaq Composite fell 0.35%.

    Further earnings this week will give investors a clearer sense of markets.

    Here are some key reports to look out for: Charles Schwab on Monday; Bank of America, Goldman Sachs and Netflix on Tuesday; Morgan Stanley, IBM and Tesla on Wednesday; American Express on Thursday; Procter & Gamble on Friday. By the end of this week, investors should know if the disconnect between a profitable corporate America and a flagging economy is limited to big banks — or if it’s another side effect of the strange times we live in.

    Subscribe here to get this report sent directly to your inbox each morning before markets open.

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  • CNBC Daily Open: Don’t be misled by the big banks

    CNBC Daily Open: Don’t be misled by the big banks

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    JPMorgan Chase & Co. headquarters in New York, US, on Wednesday, Jan. 18, 2023.

    Gabby Jones | Bloomberg | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    On Friday three big U.S. banks reported better-than-expected first-quarter earnings. But investors realized this wasn’t an unambiguously good sign for markets.

    What you need to know today

    • JPMorgan Chase, Wells Fargo and Citi reported earnings Friday. All three big U.S. banks handily beat profit and revenue expectations. JPMorgan’s numbers were the most impressive, with profit surging 52% in the first quarter.
    • PRO Markets this week will mostly be influenced by earnings reports, writes CNBC Pro’s Scott Schnipper. One important tip: Investors shouldn’t assume all better-than-expected numbers are good — because earnings forecasts have been negative for so long.

    The bottom line

    Investors weren’t misled by big banks’ bonanza of incredible earnings.

    Yes, profit and revenue for all three banks that reported Friday rose compared with a year earlier. JPMorgan reported a record revenue of $39.34 billion, a 25% jump that beat analysts’ estimate by more than $3 billion. Wells Fargo’s revenue popped 17%, and Citi’s rose 12%.

    Investors rewarded the banks for their sterling balance sheets: JPMorgan soared 7.55% and Citi added 4.78% — though Wells Fargo dipped 0.05%, not because its numbers were bad but, I suspect, because it didn’t beat Wall Street expectations as much as the other two banks.

    Why were the figures so good? They had to thank rising interest rates, which allow banks to charge more for loans they make, while keeping the interest on saving accounts low. Banks pocket the difference, which is known as net interest income. It seems banks will continue benefiting from today’s high interest-rate environment: JPMorgan predicted net interest income will be $7 billion more than the bank had previously forecast.

    But high interest rates are a double-edged sword. Even though higher rates fueled big banks’ earnings, they also expose weaknesses in balance sheets, as Dimon himself warned. This means that regional banks, lacking the financial heft of bigger ones to cushion possible losses — that’s essentially how SVB failed — might not have such good news to share when they report earnings next week.

    In other words, what’s good for big banks’ income is not necessarily good for the economy. Indeed, data released Friday showed the economy is slowing down. Retail sales in March declined 1%, two times more than economists had expected, according to an advanced reading. Citigroup CEO Jane Fraser said on an investor call that the bank saw a “notable softening” in consumer spending this year.

    Despite the excitement over the big banks’ earnings, then, investors kept a cool head, causing the three major indexes to fall. The S&P 500 lost 0.21%, the Dow Jones Industrial Index slid 0.42% and the Nasdaq Composite fell 0.35%.

    Further earnings this week will give investors a clearer sense of markets.

    Here are some key reports to look out for: Charles Schwab on Monday; Bank of America, Goldman Sachs and Netflix on Tuesday; Morgan Stanley, IBM and Tesla on Wednesday; American Express on Thursday; Procter & Gamble on Friday. By the end of this week, investors should know if the disconnect between a profitable corporate America and a flagging economy is limited to big banks — or if it’s another side effect of the strange times we live in.

    Subscribe here to get this report sent directly to your inbox each morning before markets open.

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  • CNBC’s best credit cards of 2023

    CNBC’s best credit cards of 2023

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    There are credit cards designed to meet all kinds of financial situations and needs. Whether you’re a foodie, road warrior, traveler, student or someone looking to build credit, there are many credit card options to choose from.

    To help narrow down the best credit card for your lifestyle, each month, CNBC Select publishes a list of the top credit cards available. It can change from month to month, depending on limited-time sign-up bonuses, benefits and more.

    However, some cards deserve extra recognition for consistently differentiating themselves from the competition and topping our rankings month after month. These cards offer extra generous rewards and perks and continuously evolve to meet changing needs.

    When determining which cards are worthy of this award and offer consumers the most value in 2023, CNBC Select used a sample budget based on spending data available from the location intelligence firm Esri to break down how much money each card could net you over the course of five years. We then factored in the numerous additional benefits offered, such as annual statement credits, discounts at select retailers, insurance and more that make using a credit card truly worthwhile. (See our methodology for more information on how we choose the best cards.)

    Best credit cards of 2023

    Best cash-back credit card

    Chase Freedom Unlimited®

    • Rewards

      Enjoy 5% cash back on travel purchased through Chase Ultimate Rewards®, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases

    • Welcome bonus

      Earn an extra 1.5% on everything you buy (on up to $20,000 spent in the first year) – worth up to $300 cash back. That’s 6.5% on travel purchased through Chase Ultimate Rewards®, 4.5% on dining and drugstores, and 3% on all other purchases.

    • Annual fee

    • Intro APR

      0% for the first 15 months from account opening on purchases and balance transfers

    • Regular APR

    • Balance transfer fee

      Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, on transfers made within 60 days of account opening. After that, either $5 or 5% of the amount of each transfer, whichever is greater.

    • Foreign transaction fee

      3% of each transaction in U.S. dollars

    • Credit needed

    Pros

    • No annual fee
    • Rewards can be transferred to a Chase Ultimate Rewards card
    • Generous welcome bonus

    Cons

    • 3% fee charged on foreign transactions

    Who’s this for? The Chase Freedom Unlimited® Card is ideal for consumers who want a robust rewards card with no annual fee. Cardholders earn 5% cash back on travel purchased through Chase Ultimate Rewards®, 3% on drugstores and dining at restaurants (including takeout) and 1.5% on all other purchases.

    If you’re looking to maximize your rewards, there’s also a generous welcome bonus: On up to $20,000 spent in the first year, cardholders earn an additional 1.5% on all categories. That translates to 6.5% on travel purchased through Chase Ultimate Rewards, 4.5% on dining and drugstores, and 3% on all other purchases.

    This card has no annual fee, and you can benefit from a 0% intro APR for the first 15 months on new purchases and balance transfers (after, 19.49% – 28.24% variable APR). This card also offers 5% cash back on Lyft purchases through March 31, 2025 and complimentary three months of DashPass with 50% off for the next nine months. Simply activate by December 31, 2024.

    Best travel rewards card

    American Express® Gold Card

    On the American Express secure site

    • Rewards

      4X Membership Rewards® points at Restaurants (plus takeout and delivery in the U.S.) and at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X), 3X points on flights booked directly with airlines or on amextravel.com, 1X points on all other purchases

    • Welcome bonus

      Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases within the first 6 months of card membership

    • Annual fee

    • Intro APR

    • Regular APR

    • Balance transfer fee

    • Foreign transaction fee

    • Credit needed

    Pros

    • Up to $120 dining credit annually ($10 a month) for purchases made with Grubhub, Goldbelly and other eligible restaurants (after a one-time enrollment)
    • Up to $120 Uber Cash annually ($10 a month) for U.S. Uber Eats orders and U.S. Uber rides (card must be added to Uber app to receive the Uber Cash benefit)
    • Strong rewards program with 4X points earned at restaurants and 3X points earned on flights booked directly with airlines or amextravel.com
    • Baggage insurance plan covers up to $1,250 for carry-on baggage and up to $500 for checked baggage that is damaged, lost or stolen
    • No fee charged on purchases made outside the U.S.

    Cons

    • No introductory APR period
    • $250 annual fee
    • Estimated rewards earned after 1 year: $1,074
    • Estimated rewards earned after 5 years: $2,969

    Rewards totals incorporate the points earned from the welcome bonus

    Who’s this for? If you love food and travel, the American Express® Gold Card could be the ideal rewards card for you. Whether you dine out or cook at home, this card earns a competitive 4X points per dollar spent at restaurants and 4X points at U.S. supermarkets (on up to $25,000 per year in purchases, then 1X). Plus, travelers can benefit from the 3X points on flights booked directly with airlines or on amextravel.com.

    The value of Membership Rewards points varies depending on how cardholders redeem them. You can use them in a variety of ways, from paying with points at checkout at sites like Amazon to redeeming for gift cards or a statement credit to booking travel. See more on how points are calculated.

    Cardholders also receive an annual dining credit of up to $120 ($10 in statement credits a month) at participating partners, including Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar and select Shake Shack locations. Terms apply. Enrollment required. There are also *no foreign transaction fees.

    This card does have a *$250 annual fee, but it can be reduced to effectively $130 if you take advantage of the $120 dining credit each year. Then, the rewards you earn help further “pay” for the card.

    Gold Card members can also participate in Amex Offers, where you can earn statement credits or bonus Membership Rewards® points at select retailers. For example, a recent offer for Wine.com states: “Spend $50 or more, get $10 back.” These limited-time offers are location-based and additional terms apply.

    *See rates and fees.

    Best credit card welcome bonus

    Chase Sapphire Preferred® Card

    • Rewards

      $50 annual Ultimate Rewards Hotel Credit, 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining, 2X points on all other travel purchases, and 1X points on all other purchases

    • Welcome bonus

      Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $750 when you redeem through Chase Ultimate Rewards®.

    • Annual fee

    • Intro APR

    • Regular APR

      20.49% – 27.49% variable on purchases and balance transfers

    • Balance transfer fee

      Either $5 or 5% of the amount of each transfer, whichever is greater

    • Foreign transaction fee

    • Credit needed

    Pros

    • Points are worth 25% more when redeemed for travel via Chase Ultimate Rewards®
    • Transfer points to leading frequent travel programs at a 1:1 rate, including: IHG® Rewards Club, Marriott Bonvoy™ and World of Hyatt®
    • Travel protections include: auto rental collision damage waiver, baggage delay insurance and trip delay reimbursement
    • No fee charged on purchases made outside the U.S.

    Cons

    • $95 annual fee
    • No introductory 0% APR

    Who’s this for? If you want to get a lot of value right out of the gate, consider the Chase Sapphire Preferred. The card is currently offering new cardholders the chance to earn 60,000 points after spending $4,000 on purchases within three months of account opening. Those points are worth $750 toward travel booked through the Chase Ultimate Rewards® Travel portal. You can even potentially get more value if you transfer Chase points to Chase’s travel partners, like Hyatt hotels and United Airlines, and book business-class flights and luxury hotels.

    The Sapphire Preferred is also a great travel rewards credit card and has strong earning categories for those who spend on travel and dining. It earns 5X points on travel booked through the Chase Travel Portal, 3X points on dining (including takeout and delivery), 3X points on select streaming services, 3X points on online grocery purchases (excludes Target, Walmart and wholesale clubs), and 2x points on all other travel.

    The card also offers a $50 annual credit that can go towards booking a hotel in the Chase Travel Portal — this can help offset the already modest $95 annual fee.

    Best no annual fee credit card

    Citi® Double Cash Card

    • Rewards

      2% cash back: 1% on all eligible purchases and an additional 1% after you pay your credit card bill

    • Welcome bonus

    • Annual fee

    • Intro APR

      0% for the first 18 months on balance transfers; N/A for purchases

    • Regular APR

    • Balance transfer fee

      For balance transfers completed within 4 months of account opening, an intro balance transfer fee of 3% of each transfer ($5 minimum) applies; after that, a balance transfer fee of 5% of each transfer ($5 minimum) applies

    • Foreign transaction fee

    • Credit needed

    Pros

    • 2% cash back on all eligible purchases
    • Simple cash-back program that doesn’t require activation or spending caps
    • One of the longest intro periods for balance transfers at 18 months

    Cons

    • 3% fee charged on purchases made outside the U.S.
    • Estimated rewards earned after 1 year: $443
    • Estimated rewards earned after 5 years: $2,213

    Who’s this for? The Citi® Double Cash Card is a straightforward rewards card that continues to offer one of the best flat-rate cash-back programs since it launched in 2014. Cardholders earn 2% cash back on all purchases — 1% when you make a purchase and an additional 1% when you pay your credit card bill.

    There is no limit to the amount of cash back you can earn and you don’t have to worry about activating bonus categories. Cashback can be redeemed for a statement credit or direct deposit.

    This card is also a good choice for debt consolidation. There’s a 0% intro APR for the first 18 months on balance transfers (then 18.49% – 28.49% variable APR). There’s an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5). (See more on how to make the most of a balance transfer.)

    Best no annual fee travel credit card

    Discover it® Miles

    On Discover’s secure site

    • Rewards

      Automatically earn unlimited 1.5x Miles on every dollar of every purchase – with no annual fee.

    • Welcome bonus

      Discover will match all the Miles you’ve earned at the end of your first year.

    • Annual fee

    • Intro APR

      0% Intro APR for 15 months on purchases

    • Regular APR

    • Balance transfer fee

      3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*

    • Foreign transaction fee

    • Credit needed

    Pros

    • Miles program
    • Generous welcome bonus
    • No blackout dates
    • No limit to the amount of miles you can earn and miles never expire

    Cons

    • No Global Entry or TSA PreCheck statement credit offerings
    • Travel spending does not receive additional rewards
    • No airport lounge access

    Who’s this for? The Discover it® Miles card comes with a generous rewards program — all for zero annual fee — that makes it a standout among travel cards.

    The Discover it Miles card offers users unlimited 1.5X miles for every dollar spent on all purchases. But for higher spenders, Discover offers a welcome bonus that’s hard to beat: It will do a mile-for-mile match of all miles earned the first year (for new card members in their first year only). If you rack up 35,000 miles within the first 12 months, Discover will match you with 35,000 miles. That’s a total of 70,000 miles or $700 toward travel. (Based on our calculations, the average card user will earn around 32,777 miles in the first year.)

    With this card, there are no blackout dates when you pay for travel purchases using your card. And, you can easily redeem miles as a statement credit for travel, restaurant or gas station purchases, as well as a deposit to your bank account. The best part is that miles earned never expire — even if your account is closed.

    Best balance transfer credit card

    Citi Simplicity® Card

    Information about the Citi Simplicity® Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

    • Rewards

    • Welcome bonus

    • Annual fee

    • Intro APR

      0% for 21 months on balance transfers; 0% for 12 months on purchases

    • Regular APR

    • Balance transfer fee

      Introductory fee of 3% ($5 minimum) for transfers completed within the first 4 months of account opening, then up to 5% ($5 minimum).

    • Foreign transaction fee

    • Credit needed

    Pros

    • No annual fee
    • Balances can be transferred within 4 months from account opening
    • One of the longest intro periods for balance transfers

    Cons

    • 3% foreign transaction fee
    • No rewards program

    Who’s this for? The Citi Simplicity® Card offers one of the longest balance transfer intro periods at 0% for 21 months from the date of the first transfer (after, 18.49% – 29.24% variable APR). Balance transfers must be completed within four months of account opening. This is nearly two years to pay off debt, which can be helpful if you have a large balance or if your cash flow doesn’t allow you to pay off the debt within the 6-, 12- or 15-month time periods of other balance transfer cards.

    This card has no annual fee and comes with an introductory balance transfer fee: either 3% ($5 minimum) for transfers completed within the first 4 months of account opening, then up to 5% ($5 minimum). This can be worthwhile if you’re paying high-interest charges.

    New cardholders have four months to complete their balance transfer (longer than the typical 60 to 90 days). While you have more time to complete a transfer, the intro APR period starts at account opening — so try to make the transfer as soon as possible to get the most benefit of the interest-free period.

    This card also never charges late fees (though we always recommend you pay your balance on time and in full). There isn’t a welcome bonus or a rewards program.

    Best low-interest credit card

    Titanium Rewards Visa® Signature Card from Andrews Federal Credit Union

    Information about the Titanium Rewards Visa® Signature Card from Andrews Federal Credit Union has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.

    • Rewards

      3X points on gas and grocery purchases and 1.5X points on all other purchases

    • Welcome bonus

      Earn 10,000 points when you spend $1,500 within the first 90 days

    • Annual fee

    • Intro APR

      N/A for purchases and balance transfers

    • Regular APR

      13.74% to 18.00% variable on purchases; 13.74% to 17.99% on balance transfers. 

    • Balance transfer fee

    • Foreign transaction fee

    • Credit needed

    Pros

    • Low 9.49% to 16.49% variable APR
    • No fee charged on purchases made outside the U.S.

    Cons

    • Credit union membership required, though it’s free
    • No special financing on purchases or balance transfers
    • Balance transfer fee of 1.5%, or $50, whichever is greater.
    • Estimated return after 1 year: $543
    • Estimated return after 5 years: $2,314

    Rewards totals incorporate the points earned from the welcome bonus

    Who’s this for? The Titanium Rewards Visa® Signature Card from Andrews Federal Credit Union stands out for offering low interest rates, a strong rewards program and no foreign transaction fees — all at no annual fee.

    This card offers a variable APR of 13.74% to 18.00% on purchases. If you carry a balance, you can benefit from low interest charges compared to other cards that have high interest rates. Balance transfers do incur a fee of $10.00 or 2.00% of the amount of each cash advance, whichever is greater.

    Beyond interest rates, the Visa® Titanium Signature Rewards Card offers a generous rewards program: Earn 3X points on gas and grocery purchases and 1.5X points on all other purchases. Plus, there’s a welcome bonus of 10,000 points after you spend $1,500 within the first 90 days.

    In order to open this card, you need to join Andrews Federal Credit Union, but anyone can join. If you don’t meet the qualification requirements, you can opt to join the American Consumer Council (ACC) for free with the promo code “Andrews.”

    Best secured credit card

    Discover it® Secured Credit Card

    On Discover’s secure site

    • Rewards

      Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically.

    • Welcome bonus

      Discover will match all the cash back you’ve earned at the end of your first year

    • Annual fee

    • Intro APR

    • Regular APR

    • Balance transfer fee

      3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*

    • Foreign transaction fee

    • Credit needed

    Pros

    • Cash-back program
    • Generous welcome bonus
    • Starting at seven months from account opening, Discover will automatically review your credit card account to see if you can transition to an unsecured line of credit and return your deposit

    Cons

    • Cash-back program limits earnings: 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, then 1%
    • Low credit line prevents cardholders from charging high-cost items or many expenses

    Who’s this for? The Discover it® Secured Credit Card is a well-rounded secured card that offers many benefits that are typically found with unsecured cards. Cardholders can earn cash back, receive a generous welcome bonus, use the card overseas without incurring added fees and more — all for no annual fee.

    Cardholders earn a competitive 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, then 1%. Plus, you can earn unlimited 1% cash back on all other purchases automatically. The welcome bonus is also unique: For new card members in the first year only, Discover will automatically match all the cash back you’ve earned at the end of your first year. So, if you earn $50 cash back at the end of the first year, Discover will give you an additional $50.

    This card requires a minimum $200 security deposit, which is fairly standard for secured credit cards. It stands out from the crowd because it gives users a clear path to upgrading to an unsecured card (and getting their deposit back). Starting at seven months from account opening, Discover will automatically review your credit card account to see if they can transition you to an unsecured line of credit and return your deposit. This takes the guesswork out of wondering when you’ll qualify for an unsecured credit card.

    Best for building credit and average credit

    Petal® 2 “Cash Back, No Fees” Visa® Credit Card

    • Rewards

      1% cash back on eligible purchases right away and up to 1.5% cash back on eligible purchases after making 12 on-time monthly payments; 2% to 10% cash back at select merchants

    • Welcome bonus

    • Annual fee

    • Intro APR

    • Regular APR

      17.49% – 31.49% variable

    • Balance transfer fee

    • Foreign transaction fee

    • Credit needed

    Pros

    • No credit history required (if you do have a credit history, that does factor into the credit decision)
    • No fees whatsoever
    • 1% cash back on eligible purchases right away and up to 1.5% cash back on eligible purchases after making 12 on-time monthly payments; 2% to 10% cash back at select merchants
    • Credit limits range from $300 to $10,000

    Cons

    • Card isn’t for rebuilding credit, but it’s good for building credit
    • No special financing offers
    • No welcome bonus
    • Estimated rewards earned after 1 year: $249
    • Estimated rewards earned after 5 years: $1,577

    Who’s this for? The Petal 2 “Cash Back, No Fees” Visa Credit Card, issued by WebBank, is easier to get approved for because it takes a different approach to the credit card application process. Instead of judging your creditworthiness solely based on credit history, Petal may ask you to link bank accounts during the application process. Then, WebBank analyzes your bank statements and other data, such as bill payments and earnings, to determine your eligibility.

    This is especially beneficial for applicants who may not have any credit history. However, if you do have a credit history, that does factor into the credit decision.

    The Petal 2 Visa Credit Card is one of the few cards that charge zero fees*: no annual fee, no late payment fee and no foreign transaction fees. And it stands out for consumers trying to build credit because there’s no security deposit required.

    It also offers a rewards program with 1% cash back on eligible purchases right away, which can increase up to 1.5% cash back after you make 12 on-time monthly payments. This is not only a nice perk, but a great way to encourage responsible behavior. Cardholders also earn 2% to 10% cash back from select merchants.

    Best for college students

    Discover it® Student Cash Back

    On Discover’s secure site

    • Rewards

      Earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, and gas stations, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases – automatically.

    • Welcome bonus

      Discover will match all the cash back you’ve earned at the end of your first year

    • Annual fee

    • Intro APR

      0% for 6 months on purchases

    • Regular APR

    • Balance transfer fee

      3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*

    • Foreign transaction fee

    • Credit needed

    Pros

    • Cash-back program
    • Generous welcome bonus

    Cons

    • Cash-back categories must be activated each quarter
    • Cash-back program limits earnings: Enroll every quarter to earn 5% cash back in various categories on up to $1,500 in quarterly purchases, then 1%
    • You must be a U.S. citizen and college student to apply for this card

    Who’s this for? The Discover it® Student Cash Back is a well-rounded card that offers college students enrolled in a two- or four-year college the chance to build credit while earning rewards. You must be over 18 and a U.S. citizen to apply.

    Upon activation, cardholders can earn 5% cash back on rotating categories up to a $1,500 maximum each quarter (then 1%). All other purchases earn unlimited 1% cash back automatically.

    There is also an introductory 0% APR for six months on new purchases — perfect for financing dorm room essentials or textbooks. After the intro period, there’s a 17.49% – 26.49% variable APR. After you graduate, your Discover it student credit card becomes a regular credit card.

    Best dining rewards credit card

    Chase Sapphire Reserve®

    • Rewards

      Earn 5X total points on flights and 10X total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® immediately after the first $300 is spent on travel purchases annually. Earn 3X points on other travel and dining & 1 point per $1 spent on all other purchases plus, 10X points on Lyft rides through March 2025

    • Welcome bonus

      Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $900 toward travel when you redeem through Chase Ultimate Rewards®

    • Annual fee

    • Intro APR

    • Regular APR

    • Balance transfer fee

    • Foreign transaction fee

    • Credit needed

    Pros

    • $300 annual travel credit for travel purchases
    • Global Entry or TSA PreCheck application fee credit up to $100 every four years
    • Priority Pass™ Select lounge access at 1,000+ VIP lounges in over 500 cities worldwide
    • Points are worth 50% more when redeemed for travel via Chase Ultimate Rewards®
    • Special benefits at The Luxury Hotel & Resort Collection
    • Complimentary year of Lyft Pink membership

    Cons

    • High annual fee, but it can be offset by taking advantage of all the card’s perks
    • No introductory APR
    • Estimated rewards earned after 1 year: $1,469
    • Estimated rewards earned after 5 years: $3,346

    Rewards totals incorporate the points earned from the welcome bonus

    Who’s this for? The Chase Sapphire Reserve® is geared toward foodies and frequent travelers who are looking for luxurious perks, such as free airport lounge access and complimentary hotel room upgrades. Cardholders earn a competitive 3X points on dining and travel worldwide. Based on CNBC Select’s calculations, we found the average American using this card could earn an estimated $165 per year in rewards for dining purchases alone (assuming you redeem rewards for travel via Chase Ultimate Rewards®, receiving 50% more value).

    The value of Chase rewards points varies depending on how you use them. If you redeem points for cash and gift cards, each point is worth $.01, which means that 100 points equals $1 in redemption value. (See more on how the value of points is calculated.)

    This card has a unique benefit where all points are worth 50% more when redeemed for travel via Chase Ultimate Rewards®. For example, 60,000 points are worth $900 redeemed toward airfare, hotels, car rentals and cruises when you redeem through Chase Ultimate Rewards®. This perk is a great way to get the most value for your rewards.

    While this card has a robust travel rewards program, it also comes with a steep $550 annual fee. All the card’s added credits and benefits provided by Chase can help offset the annual cost. The $300 annual travel credit effectively reduces the annual fee to $150. Cardholders can take advantage of a Priority Pass™ Select membership that has a value of about $429. They also get a Global Entry or TSA PreCheck application fee credit of up to $100 every four years.

    Best gas rewards credit card

    PenFed Platinum Rewards Visa Signature® Card

    • Rewards

      5X points on gas purchases at the pump and electrical vehicle charging stations, 3X points on supermarket purchases, 1X point on all other purchases

    • Welcome bonus

      15,000 points when you spend $1,500 in the first 3 months from account opening

    • Annual fee

    • Intro APR

      0% introductory APR for 12 months on balance transfers made in the first 90 days after account opening.*

    • Regular APR

      17.99% variable on purchases; 17.99% non-variable on balance transfers

    • Balance transfer fee

    • Foreign transaction fee

    • Credit needed

    Pros

    • High 5X points on gas at the pump and 3X on supermarket purchases
    • No bonus category activations
    • Good special financing offer on balance transfers
    • Estimated rewards earned after 1 year: $513
    • Estimated rewards earned after 5 years: $2,167

    Rewards totals incorporate the points earned from the welcome bonus.

    *0% introductory APR for 12 months on balance transfers made in the first 90 days after account opening. After that, the APR for the unpaid balance and any new balance transfers will be a non-variable rate of 17.99%. 3% balance transfer fee per transaction. Subject to credit approval. If you take advantage of this balance transfer, you will immediately be charged interest on all purchases made with your credit card unless you pay the entire account balance, including balance transfers, in full each month by the payment due date.

    Who’s this for? Among the cards we analyzed, the PenFed Platinum Rewards Visa Signature® Card currently offers the highest rewards rate at gas stations with 5X points per dollar spent for gas purchases at the pump.

    This card has no annual fee, so road warriors can maximize their savings. In addition to earning high rewards at gas stations, cardholders also benefit from unlimited 3X points for supermarket purchases.

    PenFed is a credit union, so membership is required to open the PenFed Platinum Rewards Visa Signature® Card. Anyone can join by completing a few extra steps: You need to apply, open a savings account with a $5 deposit and maintain a $5 account balance.

    Best grocery rewards credit card

    Blue Cash Preferred® Card from American Express

    On the American Express secure site

    • Rewards

      6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at U.S. gas stations, 3% cash back on transit including taxis/rideshare, parking, tolls, trains, buses and more and 1% cash back on other purchases. Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit.

    • Welcome bonus

      Earn a $250 statement credit after you spend $3,000 in purchases on your new card within the first 6 months. 

    • Annual fee

      $0 intro annual fee for the first year, then $95.

    • Intro APR

      0% for 12 months on purchases from the date of account opening

    • Regular APR

    • Balance transfer fee

      Either $5 or 3% of the amount of each transfer, whichever is greater.

    • Foreign transaction fee

    • Credit needed

    Pros

    • High 6% cash back at U.S. supermarket spending (up to $6,000 a year, then 1%)
    • Unlimited 6% cash back on select U.S. streaming subscriptions
    • Unlimited 3% cash back at U.S. gas stations and on transit

    Cons

    • 2.7% fee on purchases made abroad
    • Estimated rewards earned after 1 year: $679
    • Estimated rewards earned after 5 years: $2,397

    Rewards totals incorporate the cash back earned from the welcome bonus

    Who’s this for? Frequent grocery shoppers will be happy to learn the Blue Cash Preferred® Card from American Express offers the highest cash-back rate at U.S. supermarkets at 6% (on up to $6,000 per year in purchases, then 1%). The average American can earn $310 in cash back each year when they do their shopping at qualifying supermarkets.

    If you want to maximize cash back on groceries, this card is for you. In addition to high grocery rewards, there’s an unlimited 6% cash back on select streaming subscriptions, unlimited 3% cash back at U.S. gas stations, unlimited 3% cash back on transit including taxis/rideshare, parking, tolls, trains, buses and more and 1% cash back on all other purchases.

    Cardmembers can also take advantage of Amex Offers, where users earn a statement credit or additional cash back at select retailers. For example, a recent offer gave you $25 back each month (up to three times), if you spent $70 or more a month on Sun Basket meal kit delivery. These limited-time offers are location-based and additional terms apply.

    This card has $0 intro annual fee for the first year (then $95), but it can be offset by the cash back you earn and discounts you can get through the Amex Offers. (See rates and fees)

    Best for paying rent

    Bilt Mastercard®

    • Rewards

      Earn points when you make 5 transactions that post each statement period – up to 1x points on rent payments without the transaction fee (up to 50,000 points each calendar year), 3x points on dining, 2x points on travel, and 1x points on other purchases.

    • Welcome bonus

    • Annual fee

    • Intro APR

    • Regular APR

    • Balance transfer fee

      Introductory fee of either $5 or 3% of the amount of each balance transfer, whichever is greater, for 120 days from account opening. After that, up to 5% for each balance transfer ($5 minimum).

    • Foreign transaction fee

    • Credit needed

    Pros

    • No annual fee
    • Solid rewards on broad spending categories
    • Ability to pay your rent with no fees
    • Transfer points to leading frequent traveler programs at a 1:1 rate, including American Airlines, United and World of Hyatt®

    Cons

    • No welcome offer
    • No introductory 0% APR

    Who’s this for? The Bilt Mastercard® is the only credit card that lets you earn travel rewards on rent payments with no fees.

    So long as you make at least five card transactions per statement period, you’ll earn 3X points on dining, 2X points on travel 1X points on rent (on up to $50,000 in rent payments every year) and everything else. Thanks to a new partnership with Lyft, cardholders can now also earn up to 5X points on their rideshares.

    Thanks to the BiltProtect feature, cardholders are protected from using up their entire credit limit or risk going into debt by charging their rent to their card every month. Other benefits include cell phone protection; Purchase Assurance Plus, which covers your purchases for 90 days; exclusive discounts with brands like Lyft, DoorDash and ShopRunner; and access to the Mastercard Luxury Hotels & Resorts portfolio, which offers amenities like upgrades, free breakfast and property credits.

    Bilt Rewards points are extremely flexible. They can be redeemed for travel either by transferring them to airline and hotel partners or by booking through the Bilt Travel Portal at a fixed rate of 1.25 cents per point. Other redemption options include using them to shop online, book fitness classes, pay rent and even make a down payment on a home.

    Best entertainment rewards credit card

    Capital One Savor Cash Rewards Credit Card

    Information about the Capital One Savor Cash Rewards Credit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

    • Rewards

      4% cash back on dining and entertainment, 4% on eligible streaming services, 3% at grocery stores and 1% on all other purchases

    • Welcome bonus

      Earn a one-time $300 cash bonus once you spend $3,000 on purchases within the first three months from account opening

    • Annual fee

    • Intro APR

    • Regular APR

    • Balance transfer fee

      3% for promotional APR offers; none for balances transferred at regular APR

    • Foreign transaction fee

    • Credit needed

    Pros

    • Unlimited 4% cash back on entertainment purchases
    • Ability to redeem rewards at any amount, unlike some other cards with $25 minimums
    • No fee charged on purchases made outside the U.S.

    Cons

    • $95 annual fee
    • No introductory 0% financing offers for purchases or balance transfers

    Who’s this for? Sports fans, movie buffs and adventure seekers will all find a common reason to like the Capital One Savor Cash Rewards Credit Card: unlimited 4% cash back on entertainment purchases. Compared to other rewards cards, this is the highest unlimited rewards rate on entertainment spending, whether you’re buying movie tickets, taking a family trip to the zoo or spending the evening bowling with friends.

    Cardholders can also benefit from exclusive access to entertainment events, such as the iHeartRadio Music Festival and the Capital One JamFest.

    Beyond entertainment perks, there’s also 10% cash back on Uber rides, 4% cash back on dining and popular streaming services, 3% at grocery stores and 1% on all other purchases. Plus, you can enjoy an Uber One membership through Nov. 14, 2024 and foodie-centric perks through Capital One Dining.

    This card does come with a $95 annual fee, but can be offset by the cash back you earn.

    Best credit card for Global Entry and/or TSA PreCheck credit

    Capital One Venture Rewards Credit Card

    On Capital One’s secure site

    • Rewards

      5X miles on hotel and rental cars booked through Capital One Travel, 2X miles per dollar on every other purchase

    • Welcome bonus

      Earn 75,000 bonus miles once you spend $4,000 on purchases within 3 months from account opening

    • Annual fee

    • Intro APR

      N/A for purchases and balance transfers

    • Regular APR

    • Balance transfer fee

      0% at the regular transfer APR

    • Foreign transaction fee

    • Credit needed

    Pros

    • 5X miles on hotel and rental cars booked through Capital One Travel
    • Global Entry or TSA PreCheck application fee credit up to $100 every 4 years

    Cons

    • No introductory APR
    • There’s a $95 annual fee

    Who’s this for? The Capital One Venture Rewards Credit Card offers excellent rewards rates: Earn 5X miles on hotel and rental cars booked through Capital One Travel and 2X miles per dollar spent on all other spending. While Venture does come with a $95 annual fee, that’s low compared to some other rewards cards, with some annual fees of up to $550.

    In addition to rewards, every four years cardholders receive a credit for a Global Entry or TSA PreCheck application, up to $100. Cardholders now also get two free visits to Capital One airport lounges per year. If you travel often, these are great perks that can save you time and money.

    This card has no foreign transaction fees and comes with a bunch of additional travel perks, such as 24-hour travel assistance services and an auto rental collision damage waiver.

    *Terms, conditions and exclusions apply. Refer to your Guide to Benefits for more details.

    Best for premium perks

    The Platinum Card® from American Express

    On the American Express secure site

    • Rewards

      Earn 5X Membership Rewards® Points for flights booked directly with airlines or with American Express Travel up to $500,000 on these purchases per calendar year, 5X Membership Rewards® Points on prepaid hotels booked with American Express Travel, 1X points on all other eligible purchases

    • Welcome bonus

      Earn 80,000 Membership Rewards® Points after you spend $6,000 on purchases on the Card in your first 6 months of Card Membership.

    • Annual fee

    • Intro APR

    • Regular APR

    • Balance transfer fee

    • Foreign transaction fee

    • Credit Needed

    Pros

    • Up to $200 in annual airline fee credits
    • Up to $200 in annual Uber savings
    • Get $200 back in statement credits each year on prepaid Fine Hotels + Resorts® or The Hotel Collection bookings, which requires a minimum two-night stay, through American Express Travel when you pay with your Platinum Card®.
    • $240 Digital Entertainment Credit: Get up to $20 back in statement credits each month on eligible purchases made with your Platinum Card®  on one or more of the following: Peacock, Audible, SiriusXM, The New York Times, and other participating providers (enrollment required)
    • $155 Walmart+ Credit: Cover the cost of a $12.95 monthly Walmart+ membership with a statement credit after you pay for Walmart+ each month with your Platinum Card. Cost includes $12.95 plus applicable local sales tax.

    Cons

    • $695 annual fee
    • No special financing offers on new purchases

    Who’s this for? The Platinum Card® from American Express is for those who want a luxury card with a lengthy list of benefits. Although best known for its travel perks, this card also offers a number of everyday benefits, including digital entertainment, shopping and wellness credits (enrollment required), so you don’t need to be a road warrior to benefit from it.

    To start, cardholders earn a respectable 5X Membership Rewards® points on flights booked directly with airlines or with American Express Travel (on up to $500,000 per calendar year), 5X points on prepaid hotels booked with American Express Travel and 1X points on all other purchases.

    In addition, cardholders can enjoy over a dozen premium travel and lifestyle benefits, including:

    • Up to $200 annual hotel credit
    • Up to $200 annual airline fee credit
    • Up to $300 annual Equinox credit
    • Up to $100 annual Saks Fifth Avenue credit
    • Up to $189 credit to enroll in CLEAR®
    • Up to $240 annual digital entertainment credit
    • Up to $155 annual Walmart+ credit. Plus Ups not eligible.
    • Worldwide airport lounge access, including Delta SkyClubs and Amex Centurion Lounges
    • Up to $200 annual Uber credit
    • Up to $100 fee credit for Global Entry or TSA PreCheck
    • Automatic hotel elite status with Hilton Honors and Marriott Bonvoy
    • Comprehensive travel insurance
    • Complimentary Amex concierge service
    • Terms apply

    Its $695 annual fee (see rates and fees) is higher than any other card on this list, but you can definitely come out ahead if you take full advantage of the benefits. And that’s before factoring in the card’s welcome offer, which many rewards experts value at $2,000. (See more on how the value of points is calculated.)

    Editor’s choice

    Capital One Venture X Rewards Credit Card

    Information about the Capital One Venture X Rewards Credit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

    • Rewards

      Unlimited 2X miles on all eligible purchases, and 5X miles on flights and 10X miles on hotels and rental cars when booked via Capital One Travel portal

    • Welcome bonus

      Earn 75,000 bonus miles once you spend $4,000 on purchases within the first 3 months from account opening

    • Annual fee

    • Intro APR

    • Regular APR

      21.74% – 28.74% variable APR

    • Balance transfer fee

      0% at the regular transfer APR

    • Foreign transaction fees

    • Credit needed

    Pros

    • Large welcome bonus
    • No foreign transaction fees
    • Up to $100 statement credits for either Global Entry or TSA PreCheck®
    • Unlimited complimentary access for you and two guests to 1,300+ lounges, including Capital One Lounges and the Partner Lounge Network

    Cons

    • High annual fee
    • No introductory 0% APR period

    Who’s this for? If you value simplicity and want one, strong standalone credit card, it doesn’t get much better than the Capital One Venture X Rewards Credit Card. It offers a straightforward rewards structure, a myriad of valuable benefits and a lower annual fee than other high-end cards with similar features.

    Cardholders earn 2X miles on everyday purchases, plus 5X miles on flights and a whopping 10X miles on hotels and cars booked through Capital One Travel. These miles can be transferred to airline and hotel partners, such as Accor Live Limitless, Air Canada Aeroplan and Etihad Guest. You can also redeem rewards toward travel through Capital One Travel, cash-back, gift cards, experiences and more.

    On top of that, the Venture X card offers up to $100 in statement credit for either Global Entry or TSA PreCheck®, complimentary cell phone insurance, special perks on hotel stays book through the Premier Collection and access to Capital One Lounges as well as the extensive network of Priority Pass and Plaza Premium airport lounges worldwide. Every year, cardholders receive up to $300 back in statement credits each year for bookings made through Capital One Travel and a 10,000-mile bonus on each account anniversary (worth at least $100 for travel), making it easy to recoup the $395 the annual fee.

    *Terms, conditions and exclusions apply. Refer to your Guide to Benefits for more details.

    FAQs

    What should I consider before choosing the best credit card?

    Having a credit card is an important piece of your financial profile, but with so many options available, it can be hard to find the best one for your needs. Here are some common questions to ask yourself so you can decide what’s the best credit card for you.

    Do you want to earn rewards?

    There are hundreds of rewards credit cards out there, where you can earn cash back, points or miles on every purchase you make.

    And if you want to earn rewards, what specific categories are most important to you?

    Rewards credit cards come in all shapes and sizes. If you want to maximize rewards in specific categories, check out cards offering bonus rewards on gas, groceries, restaurants, entertainment, travel and more. Or keep it simple and opt for a flat-rate cash-back card.

    Learn more: Are credit card points taxable? Here’s when you may have to pay taxes on your rewards

    Are you looking to get out of debt?

    If you’re carrying a balance on a high-interest credit card, consider transferring it to a balance transfer credit card offering no interest for up to 21 months. There are even cards with no balance transfer fees.

    Do you want to build credit?

    Experts agree the sooner you build credit, the better. Credit cards are a great way to do that. Check out secured cards for credit newbies or other cards for building or rebuilding credit.

    Do you travel abroad?

    A credit card with no foreign transaction fees is essential to save you the typical 3% fee per purchase made outside the U.S. Also, it can be a good idea to consider cards that waive Global Entry or TSA PreCheck application fees.

    Find the best credit card for you by reviewing offers in our credit card marketplace or get personalized offers via CardMatch™.

    How many credit cards should I have?

    Many people have multiple credit cards, and there are benefits to this. It can help increase your credit score by giving you more available credit and therefore a better credit utilization ratio.

    At its most basic, having access to more credit can help you finance more purchases if you don’t have enough cash to cover everything up front.

    You can also earn more rewards by optimizing which card you use for certain spending categories. For instance, you may make all your dining purchases with a card that earns bonus rewards in that category, but another card with a bonus multiplier for grocery purchases.

    Ultimately, it’s up to you to decide how many credit cards you need. Make sure to evaluate your spending habits and research what card would be best for you.

    What do I need to apply for a credit card?

    Applying for a credit card is easy, and you’ll often get an instant decision on whether you’re approved or denied. To apply for a credit card, you’ll generally need to provide the following:

    • Full legal name
    • Date of birth
    • Social Security or Individual Taxpayer Identification Number
    • Mailing address
    • Email address and/or phone number
    • Annual income
    • Housing costs

    How old do I have to be to get a credit card?

    What is the easiest credit card to get?

    Secured credit cards are generally the easiest credit cards to be approved for. They are similar to traditional cards (they extend credit, can incur interest charges and in some cases can even earn rewards) but require you to put down a security deposit to access a line of credit. The amount you deposit usually becomes your credit limit.

    Which type of card is most accepted?

    There are four major credit card issuers: American Express, Discover, Mastercard and Visa.

    Visa and Mastercard are the most widely accepted credit card networks globally. That said, American Express and Discover still have 99% acceptance rates among U.S. merchants who take credit cards and are increasing their international footprints.

    What is a credit card’s billing cycle?

    When it comes to credit cards, most billing cycles are one month or 28 to 31 days. After your billing cycle ends, you typically have what is known as a grace period where you can pay off your full balance without incurring any interest charges. However, if you pay off your card balance before the billing cycle ends, it will help to keep your credit utilization down, which boosts your credit score.

    Keep in mind that the grace period may not apply to all charges. Balance transfers and cash advances are usually charged interest starting on the transaction date.

    What credit score do I need to get the best cards?

    When you apply for a credit card, the bank or lender will review your credit report from one or more of the three major credit bureaus. It will also typically check your FICO credit score, the top credit cards usually require a very good or excellent credit score.

    This is how FICO credit scores are classified according to myFICO:

    • Poor/bad credit: Less than 580
    • Fair credit: 580-669
    • Good credit: 670-739
    • Very good credit: 740-799
    • Exceptional/excellent credit: 800 or higher

    Building and maintaining a healthy credit score helps your personal finances in all sorts of ways outside of increasing your chances of getting approved for a great sign-up bonus. Your FICO score is calculated based on the following factors and each is weighted differently:

    • Payment history: 35%
    • Total debt: 30%
    • Length of credit history: 15%
    • New credit: 10%
    • Credit mix: 10%

    Do I need a business credit card?

    Having a separate credit card for your small business or side hustle is important so you can keep your personal and business activities separate. Business credit cards come in all shapes and sizes, there are business cards that offer cash-back rewards, travel rewards and everything in between.

    The right business credit card for you should offer bonus rewards that align with your business spending. To keep it simple, you can start your business credit card search at the bank where you currently have your business bank accounts. If you bank with Wells Fargo, Bank of America or Chase, then it may be easiest to have all of your accounts with one institution.

    Many of the banks that offer the best consumer cards also have top-notch business cards. For example, Chase has the Ink Business line of small business cards, which includes the Ink Business Unlimited® Credit Card and the Ink Business Cash® Credit Card. Both cards have no annual fee, hefty sign-up bonuses and generous bonus spending categories.

    Our methodology

    To determine which cards offer the best value, CNBC Select analyzed over 250 of the most popular credit cards available in the U.S. We compared each card on a range of features, including rewards, welcome bonus, introductory and standard APR, balance transfer fee and foreign transaction fees, as well as factors such as required credit and customer reviews when available. We also considered additional perks, the application process and how easy it is for the consumer to redeem points.

    We also estimated how much the average consumer would save over the course of a year, two years and five years, assuming they would attempt to maximize their rewards potential by earning all welcome bonuses offered and using the card for all applicable purchases. All rewards total estimations are net the annual fee. Our final picks are weighted heavily toward the highest five-year returns, since it’s generally wise to hold onto a credit card for years. This method also avoids giving an unfair advantage to cards with large welcome bonuses.

    For balance transfer cards, we used a Bankrate calculator to tally the interest rates and fees you could incur if you transferred $6,028, the average balance Americans carry on their credit cards in 2019, before the pandemic, according to Experian.

    If the average consumer with a $6,028 balance on their credit card pays $200 each month, they will spend $1,911 in additional interest, assuming the average 17.7% APR. And it will take them 40 months — more than three years — to pay off that debt.

    With four of the five cards featured on this list, if you take full advantage of the intro APR period and pay $200 per month, you’ll pay less than $450 in interest and cut your repayment time in half to 20 months. That’s a significant savings.

    For the cards that offered a rewards program, we also estimated how much cash back you might earn over a five-year period. CNBC Select teamed up with location intelligence firm Esri. The company’s data development team provided the most up-to-date and comprehensive consumer spending data based on the 2019 Consumer Expenditure Surveys from the Bureau of Labor Statistics. You can read more about their methodology here.

    Esri’s data team created a sample annual budget of approximately $22,126 in retail spending. The budget includes six main categories: groceries ($5,174), gas ($2,218), dining out ($3,675), travel ($2,244), utilities ($4,862) and general purchases ($3,953). General purchases include items such as housekeeping supplies, clothing, personal care products, prescription drugs and vitamins, and other vehicle expenses.

    CNBC Select used this budget to estimate how much the average consumer would save over the course of a year, two years and five years, assuming they would attempt to maximize their rewards potential by earning all welcome bonuses offered and using the card for all applicable purchases. All rewards total estimations are net the annual fee.

    It’s important to note the value of a point or mile varies from card to card and based on how you redeem them. When we calculated the estimated returns, we assumed that cardholders are redeeming points/miles for a typical maximum value of 1 cent per point or mile. (Extreme optimizers might be able to achieve more value.)

    When choosing the best balance transfer card, we focused on the card that provides consumers with the cheapest way to pay off their debt rather than the number of rewards they could potentially earn. When you’re in credit card debt, your primary focus should be repayment. Earning rewards should be seen as a bonus, and you don’t want to spend beyond your means in order to earn points.

    The five-year rewards total and the interest rate and fees estimates are derived from a budget similar to the average American’s spending and debt. You may earn a higher or lower return depending on your spending habits.

    The editor’s choice card is independently chosen by CNBC Select’s editorial team. While it may not have ranked as the number-one card in any given category, it consistently ranks highly across multiple categories and we believe offers some of the best value overall for a stand-alone card. Its rewards, welcome bonus, APR, fees, ease-of-use and ongoing benefits were all taken into consideration.

    Subscribe to the Select Newsletter!

    Our best selections in your inbox. Shopping recommendations that help upgrade your life, delivered weekly. Sign-up here.

    For rates and fees of the American Express® Gold Card, click here.

    For rates and fees of the Blue Cash Preferred® Card from American Express, click here.

    For rates and fees of the Discover it® Secured Credit Card, click here.

    For rates and fees of the Discover it® Student Cash Back, click here.

    For rates and fees of the Discover it® Miles, click here.

    For rates and fees of The Platinum Card® from American Express, click here.

    Petal 2 Visa Credit Card issued by WebBank.

    For Capital One products listed on this page, some of the above benefits are provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply.

    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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  • The Dow’s 4 financial stocks are cutting about 170 points off the Dow’s price

    The Dow’s 4 financial stocks are cutting about 170 points off the Dow’s price

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    Financial stocks continued to drag stock stock market down Friday, as the Dow Jones Industrial Average’s
    DJIA,
    -1.19%
    four financial components contributed about 40% of the index’s selloff. Shares of JPMorgan Chase & Co.
    JPM,
    -3.78%
    gave up 3.7%, insurer Travelers Companies Inc.
    TRV,
    -4.17%
    dropped 3.6%, American Express Co.
    AXP,
    -2.62%
    fell 3.2% and Goldman Sachs Group Inc.
    GS,
    -3.67%
    slid 3.0%. The combined price declines of those stocks reduced the Dow’s price by 170 points, while the Dow fell 439 points, or 1.4%. SVB Financial Group’s
    SIVB,
    -60.41%
    bankruptcy filing on Friday showed that the $30 billion infusion into First Republic Bank
    FRC,
    -32.80%
    didn’t mean the crisis in investor confidence was over.

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  • Op-ed: Financials may get more love amid sustained higher interest rates

    Op-ed: Financials may get more love amid sustained higher interest rates

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    Credit card providers are benefitting from post-pandemic travel and increasing card usage in general, with balances way up in recent months.

    Valentinrussanov | E+ | Getty Images

    Financial stocks were so out of favor for most of 2022 that perhaps their tickers should have been appended with a Nathaniel Hawthorne-esque “U” — for “unloved.” Yet after some decent gains so far this year, the sector could draw suitors aplenty as 2023 progresses.

    The present allure of financial stocks, stemming from low valuations and high levels of capital, is especially strong as higher interest rates are making lending money more profitable.

    As of mid-February, the Financial Select Sector SPDR ETF had recovered about half its 2022 losses. Amid this comeback, robust earnings have kept the sector’s price-earnings ratios low, as reflected by XLF’s P/E of 14.5 in mid-February.

    Buckets are out at the banks

    Low share prices are the norm

    Despite gains this year, share prices of this sector are still quite low, considering good earnings and a long history of corporate performance.  

    One reason for the low prices is fear of recession. But even if the most widely anticipated recession ever actually becomes reality, assuming that the short-and-shallow camp turns out to be right, financial sector earnings could easily prove more resilient than normally expected in a downturn.

    Also tamping down prices is long-term market perception, said Christopher Davis, portfolio manager and chairman of Davis Advisors in New York. Several months ago, he made the case that financials tend to be mispriced because they’re “widely misunderstood,” adding the sector was (and still is, in my opinion) “primed for long-term revaluation.”

    Revaluation could be in the offing, as indicated by shifts in the sector’s technical indicators, especially those for diversified financial companies and insurance companies, following growth in the latter this year. As of late February, Invesco KBW Property & Casualty Insurance ETF was up more than 14% over the preceding six months. After taking big hits from Hurricane Ian last year, insurance companies are getting more respect from analysts now that they are on firmer footing in fairer weather.

    A close haircut for regional banks

    Regional banks, which took a close haircut early last year after hitting a five-year peak in January, are also recovering. The bellwether ETF for this group, SPDR Regional Banking, was up nearly 9% year to date as of mid-February. Many regional banks have recently been buying back shares to support a floor on prices and give shareholders more total return without getting locked into dividend increases.

    Meanwhile, credit card providers are benefitting from post-pandemic travel and increasing card usage in general, with balances way up in recent months. Also positive are prospects for exchanges and data providers, a sector category whose earnings in recent years have grown twice as fast as those of the S&P 500.

    Here are some attractive financial stocks with strong growth prospects and fundamental metrics signaling low downside risk:

    • Truist Financial: Formed in 2019 by a merger of equals — regional banks BB&T Corp. and SunTrust — Truist is now the nation’s seventh-largest bank, with a capitalized ratio nearly twice what’s required by regulators. Truist’s dividend has more than doubled in the last 10 years. Post-merger kinks typically dampen companies’ share price growth, so Truist’s recent underperformance relative to KRE was expected. And Truist’s growth could exceed peers’ because it operates in rapidly growing regions — primarily, the mid-Atlantic and Southeast.
    • East West Bancorp: This is a fast-growing, full-service commercial bank with locations in the U.S., serving the Asian-American community, and in China. Shares were up nearly 19% year to date as of mid-February. This growth is expected to accelerate from China’s reopening from Covid lockdowns. CFRA has this bank as a strong buy, forecasting 2023 growth of 17% to 19%, in part because net interest income currently makes up 89% of its revenue, versus 73% for peers. Also, the bank has “no exposure to mortgage banking or capital markets, which have been severely impacted by rising rates and economic uncertainty,” CFRA states, citing balance sheet momentum, a discounted valuation and the advantage of a Chinese population in the U.S. that’s growing faster than the whole.
    • FactSet Research Systems: FactSet is the star of the sector’s data-provider segment. It’s an interesting, attractive play with recurring revenues of 98%, largely because financial firm customers rely so heavily on FDS’s data. You can see it cited on brokerage platforms and analyst reports. FDS’s software, data and analytics supports the workflow of both buy-side and sell-side clients. Customers include asset managers, bankers, wealth managers, asset owners, hedge funds, corporate users, and private equity and venture capital professionals. The company has an excellent track record of maneuvering through tough economic times, evidenced by its top-line sales growth for 42 consecutive years and annual dividend raises for the last 23 years. The difficulties of changing data providers amount to an economic moat that’s daunting to competitors.
    • American Express: This is the right business at the right time, with business travel improving, China reopening and consumer spending among the affluent strong. Revenue growth went from a 10-year stretch of 2% annually to 25% in 2022, with 17% growth forecast for this year. Connecting better with millennials and Generation Z customers than its peers, American Express is acquiring new cardholders at an increasing rate. Analysts expect earnings to rocket up 30% over the next two years, while those of competitors appear likely to shrink. And because of well-heeled customers, this company has less credit risk than its peers.
    • Chubb: Chubb is the world’s largest publicly traded property and casualty insurer, operating in 54 countries but with 60% of its revenue from North America. CB has a market-leading position in industrial, commercial and mid-market traditional and specialty property-casualty coverage. It is also a leader in high net worth personal-insurance coverage, a category unlikely to feel pain from an economic downturn. Chubb has high-quality underwriting, but shares are trading at a discount to peers with lower-quality underwriting. Higher premiums, a 98.4% customer-retention rate and higher interest rates should all contribute to strong earnings growth, and shares are widely viewed as significantly undervalued.

    The current, higher rates aren’t going down anytime soon. This sector is currently positioned for sustained earnings strength and likely price growth throughout this year and into 2024.

    — By Dave Sheaff Gilreath, CFP, partner and chief investment officer of Sheaff Brock Investment Advisors LLC and Innovative Portfolios LLC.

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  • American Express launches products for small businesses

    American Express launches products for small businesses

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    NEW YORK (AP) — American Express is launching a suite of financial service products for small businesses as it aims build up its presence in the small business sector.

    The services, called Business Blueprint, stem from the credit card giant’s acquisition of fintech Kabbage in 2020. American Express had been offering small business lines of credit and other services under the Kabbage moniker, but now it will replace those with a suite of products — from a cash flow management hub to business checking accounts and lines of credit — under the name American Express Business Blueprint.

    Small businesses often have difficulty securing loans since they lack established credit scores and often don’t have a lot of capital on hand. Some fintech providers have stepped in to offer loans to small businesses, but often at steeper rates compared to traditional banks. Rates on AmEx Business Blueprint line of credit loans vary widely — from from 2% to 9% for a six-month loan to 15.75% to 27% for an 18-month loan.

    AmEx said Business Blueprint is about more than just loans, however. It is designed to let small businesses conduct a wide range of tasks they might otherwise do separately — taking out loans, paying bills and vendors, and accepting card payments — all in one place.

    AmEx aims to be a “digital one-stop shop for small businesses financial needs,” said Anna Marrs, group president of global commercial services and credit & fraud risk at American Express. “It really marks a new chapter for American Express, the chapter on which small businesses can not only do business with American Express, but also run their businesses with Amex.”

    It’s free to sign up for Business Blueprint, and its digital financial products are available at varying rates. The service launches Tuesday.

    Alenka Grealish, principal analyst, emerging tech at research firm Celent, said the effort is part of a broader effort by financial service companies to move away from product-based offerings like one-off loans toward offering a more holistic suite of services.

    AmEx has been trying to broaden its business beyond its traditional revenue sources: fees charged to merchants that accept its card and fees paid when a customer doesn’t pay off their entire charge card balance each month. On Friday, American Express reported fourth-quarter profit fell 9%, as the credit card giant had to set aside more money to cover potentially bad loans.

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