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Tons of tools exist to help you compare credit card offers side by side. But what exactly are you looking for? How can you tell what’s a good offer for you?

A credit card’s APR is often the most commonly promoted feature of a card, and it’s the one feature that you can easily compare across cards. Here’s how to recognize what is a good APR versus a bad one and choose the card that’s right for you.

What Is APR?

An APR is the annual percentage rate for a credit card or loan and it’s a way to express the interest you pay to borrow money. It represents the interest if it were applied by the year (though credit card interest is typically applied daily).

For credit cards, the main purpose of the APR is to compare one offer against another. You can’t know how much it’ll actually cost you to use the credit card without knowing exactly how much of a balance you’d carry and for how long, but comparing APRs can help you see which card would be cheapest to carry a balance on.

Types of credit card APRs include:

• Variable APR: A variable interest rate is tied to the prime rate, an industry norm that fluctuates with the Federal Reserve Rate that goes up and down with economic conditions. A variable interest rate will rise and fall over time, typically changing around once per quarter, over the life of the loan or credit card.
• Fixed APR: A fixed rate isn’t tied to the prime rate, so lenders can only change it if your credit score and history change, and they have to give you 45 days’ notice of any change. Fixed APRs are rare for credit cards but might be available for mortgages or other loans.

When you sign up for a credit card, your agreement could include several APRs that apply to different uses of the card: a purchase APR is for transactions where you buy stuff with the card, introductory APR is a lower promotional rate for a period when you first start using the card, penalty APR is a higher rate for a period if you make too many late monthly payments, cash advance APR is for money you withdraw using the card (a.k.a. cash advances) and balance transfer APR applies to any debt you move over from another credit card.

What Is a Good APR?

The average credit card interest rate in the United States was 16.27% as of August 2022, according to the Federal Reserve’s October Consumer Credit report. For those accounts that were charged interest (users who carried a balance), the average rate was 18.43%.

The rate you can expect on a credit card offers varies greatly depending on what’s on your credit report, so what’s considered a “good” credit card APR is different for each person.

According to the CFPB’s 2021 Consumer Credit Card Market Report, average credit card interest rates by borrower type for 2020 (the latest year available) were the following.

Though the CFPB hasn’t shared later data on average APRs by credit score, the average interest rates have likely gone up slightly as the Fed rate has increased (and will go down as the Fed rate decreases).

How to Qualify for a Good Credit Card APR

Your credit card’s interest rate is based largely on your credit history, so improving and maintaining a high credit score is the best way to get a low APR. Raise or maintain your credit score by:

• Paying your bills on time. Payment history weighs heavily on your credit score, so make credit card payments (at least the minimum amount due) by the due date every month, and stay on top of your other debt payments and bills to avoid delinquent reports to credit bureaus.
• Opening a credit builder account. Some companies cater to folks who are new to credit with credit builder loans, cards or accounts. Take out a credit builder loan with Self; or open an account with Chime or Varo, both of which offer a credit card secured with a bank account.
• Using a secured credit card. Whether you’re new to credit or have a poor credit history, a secured credit card is a viable way to build your credit. You’ll have to make a deposit, which could be as low as $200, and you’ll start with a low credit limit. Many secured credit cards will raise your limit over time as you use the card and pay your credit card bill on time.
• Raising your credit limit — but not spending more. A higher credit limit can immediately decrease your credit utilization ratio, which is good for your credit score.
• Paying off outstanding debt, starting with credit cards. Paying down credit card debt will decrease your credit utilization, and paying off other debt will decrease your overall debt, both factors in your credit score.
• Not applying for new credit too often. A lot of hard inquiries — the kind of credit checks that happen when you apply for a new card — can ding your credit report and hurt your score. Instead, get prequalified offers for a card to get an idea of your potential interest rate and credit limit before officially applying.

Of course, your best bet to avoid paying interest at all is to pay off your balance in full each month. You’re only charged interest on a balance you carry past the due date.

How to Lower Your Credit Card’s APR

If you want a lower interest rate on a credit card you’re already using, your best chance is to improve your credit score and stay on top of payments. Those factors could contribute to a lower score the next time the credit card issuer evaluates your interest rate.

You might also be able to find a lower interest with a different credit card. If that’s the case, it could be time to switch. Just check in on any rewards you’ve earned with your existing card and figure out how long you have to use them before they expire. Don’t close that card when you stop using it; keeping it open is good for your credit age and utilization.

If you’re carrying a balance on an old card and want a lower APR, look for a lower-APR card that allows a balance transfer. Moving your balance to the new card could help you save money while you pay it down.

You might also be able to reduce the interest you’re paying by replacing your credit card debt with a debt consolidation loan. These loans pay off your credit card balance — or balances — so you just have one payment to make to the new lender. They’re best if you can get a loan with a lower interest rate than your credit card.

How to Compare Credit Card APRs

Aside from rewards, APR is often the most prominently advertised feature of a credit card. The purpose of the APR calculation is to give you an easy way to compare offers from multiple companies, so looking at these numbers side-by-side can give you a good idea of which offer is best for you.

But other factors can affect how much it’ll cost you to use a credit card, too. Look for annual fees and late fees.

Also consider promotional offers. Many credit cards offer an introductory APR, a lower rate for a period of around six to 12 months after you sign up for the card. Sometimes this rate is as low as 0%, which is incredibly enticing. After that, your APR will jump to your normal rate, though, and the normal rate applies to any balance you’re carrying, even if you made the initial charges during the introductory period.

Make sure you’re comparing apples to apples when you look at prequalified credit card offers. Triple-check the fine print to determine whether the offer advertised is promotional and what your regular rate would be.

Contributor Dana Miranda is a Certified Educator in Personal Finance who has written about work and money for publications including Forbes, The New York Times, CNBC, Insider, NextAdvisor and Inc. Magazine.

If you already have a credit card, it’s super easy to get a cash advance.

But it can also be super expensive. Before you borrow money from your credit card, make sure you understand how a cash advance works, how you can minimize cash advance fees, and if there are any better alternatives.

How Do Cash Advances Work?

A cash advance is a way to borrow cash from your credit card company. You can initiate your cash advance online, through cash advance checks sent with your credit card statement, or through an ATM.

To take money out of an ATM via a cash advance, you will need the PIN number associated with your credit card. You’ll then have to agree to all the cash advance fees before you can get your money. You might also incur ATM fees.

If you initiate the cash advance online, you can set it up to be directly deposited into your checking account via ACH transfer. You will have to agree to all the cash advance fees before getting your money this way, too.

Another way you might be able to take out a cash advance is with convenience checks that your credit card issuer sends with your statements. These might come with every statement, every few months, or once a year at renewal depending on your credit card issuer. As soon as you sign and hand over the check, you’re agreeing to the terms of the cash advance.

Your cash advance limit is likely to be smaller than the purchase limit for your credit card. Check your documentation or contact your card issuer to find your credit limit for a cash advance.

What Makes Credit Card Cash Advances so Expensive?

Cash advances are an extremely expensive way to borrow — even more expensive than using your credit card to make a purchase. Cash advances come with extra transaction fees, and higher APRs than regular credit card purchases. And that APR starts accruing immediately unlike credit card purchases.

Transaction Fees

The first expense to take into account is the transaction fee. This fee is usually somewhere between 3% and 5%. Typically, there is a minimum fee that’s somewhere around $10.

Let’s say you took out a $250 credit card cash advance with a transaction fee of 3%, but a minimum transaction fee of $10. Three percent of $250 is $7.50, but that’s less than the minimum fee. So you would be charged a $10 transaction fee — even though it’s more than 3%.

But if you’re taking out a $1,500 cash advance, 3% would be $45. Since 3% is more than the minimum transaction fee of $10, you’d pay $45 in transaction fees.

High APR

Credit cards almost always come with a high APR. But each card actually comes with at least two APRS: one for purchases, and then another for cash advances. The cash advance APR is almost always higher.

This is true even if you sign up for a card with a 0% introductory APR. This 0% rate typically applies for a set period — say, 12 months — and it usually only applies to credit card purchases or balance transfers. It usually does not apply to the APR for cash advances.

Interest Starts Accruing Immediately

Not only do credit card cash advances come with a higher APR, but that interest starts accumulating immediately. With credit card purchases, you’ll get a grace period, and won’t pay interest if you pay off your balance in full before your first statement due date after purchase.

Not so with cash advances. There is no grace period. You start owing interest the moment the money comes out of the ATM (or gets transferred to your bank account.) Because interest starts accumulating immediately, it gets much more expensive to pay off much more quickly.

What Is the Average Cost of a Cash Advance?

The cost of your credit card cash advance varies depending on how much you borrow. To make this analysis simple, let’s say you’re borrowing $1,000. The average cash advance fees and interest rates on a cash advance are:

• 3%-5% transaction fee
• 24.99% APR

On a $1,000 balance, your transaction fee may be anywhere from $30 to $50. With an APR of 24.99%, if you paid off your balance on Day 30, you’d owe somewhere around $20.83 in interest. If it only took one month to pay back the money, the total financing costs would be somewhere between $50.83 and $70.83.

The longer it takes you to pay off the debt, the more expensive it gets. Credit card interest usually compounds daily. This means what seems like a manageable dollar amount of interest at the beginning can spiral out of control quickly.

How to Reduce the Costs of a Cash Advance

A credit card cash advance is an expensive way to borrow, and one that you should avoid if possible. But if you find yourself in a situation where you absolutely need one, there are a couple ways to slow the bleeding. They’re simple concepts, but they may not be easy to implement.

Minimize How Much You Borrow

The fees and interest on your cash advance are a percentage of the amount you borrow. That means one of the best ways to limit your interest and fees is to lessen the amount you borrow.

If you’re borrowing this money to pay for a down payment on a car loan so you have transportation to your place of employment, maybe don’t get the fanciest model vehicle. Get something functional, safe and affordable instead — without all the bells and whistles.

You could also try negotiating with the dealership on the base price, which should lower the amount required for a down payment by the bank.

Anything you can do to lower the amount you borrow via a credit card cash advance is worth considering.

Pay Off Your Cash Advance as Quickly as Possible

Just trying to get enough money together for groceries until payday? Then make sure you pay back your cash advance as soon as your paycheck hits your account.

Because interest compounds daily, every day you owe money will cause your total due to grow noticeably the longer it takes you to pay it off.

Alternatives to Cash Advances

If you need money quickly, there are other products you could consider. Some are better than credit card cash advances – and some are worse.

Personal Loan vs. Cash advance

Personal loans tend to be cheaper than cash advances if you have good credit. Unsecured personal loans require no collateral, and you ideally want to get one with a fixed interest rate for predictable monthly payments.

If you have good to excellent credit, you might expect these loans to come with an APR somewhere between 7% and 20%. If you have poor credit, though, interest rates could be even higher than those found on cash advances.

Personal loans sometimes come with origination fees, too, which are an additional fee but are also already figured into the cost of the APR. If you take out one of these loans, it’s ideal to find one without any prepayment penalties. That way if you pay off the loan early to save money on interest, you won’t incur any extra expenses.

Also be wary of personal loans that come with balloon payments. With these loans, your monthly payment will be lower at first, but then you’ll have one, lump-sum payment at the end. If you can’t afford the balloon payment, you’re right back where you started – needing to borrow more money.

One con of these loans is that they tend to have terms that last at least a year, though you can find some with shorter terms. Another problem is that if you only need to borrow a few hundred dollars, most financial institutions offer a minimum amount between $500 and $1,000. So you might end up borrowing more than you need.

In many cases, a personal loan is preferable to a cash advance. But be mindful that if you have poor credit or the interest rate offered to you is higher than 20%, that might not be the case. Run your own personal numbers carefully.

Payday Loan vs. Cash Advance

The interest rate advertised by payday loan lenders is rarely in terms of APR. If it were, it would often be over 100%.

Different states have different laws regulating exactly how much payday lenders are allowed to charge, but even still, a cash advance will be dramatically cheaper than a payday loan.

Borrowing Money From Family & Friends vs. Cash Advance

If you’re in a rough financial spot, you could always reach out to a family member or friend for help. Depending on your relationship and the amount of money, they may keep the debt informal or write out an official contract with or without interest.

Before you borrow money from family or friends, make sure you can afford to pay them back in the near future. If you cannot, it may damage your relationship. However, if you can find a favorable, realistic arrangement, this method is highly likely to be less expensive than taking out a cash advance.

Ask for Assistance vs. Cash Advance

Taking out a cash advance to cover something like a utility bill? There may be a program available to help you so that you don’t have to borrow from your credit card company.

For utility bills in particular, there are usually two options: payment plans, or charitable assistance programs.

If your utility company sets you up on a payment plan, they may be willing to spread your current balance out over the course of several months, making repayment more achievable than owing it all in one lump sum. They may also set you up on a plan that estimates equal payments over the course of a year, so you’re not paying $20 for heat in July and $300 in January. Instead, you might get a more steady monthly bill of $150 or something along those lines.

If there is a state, government, or charitable program associated with your utility, they may have funds on hand to help people who are going through economic hardship. It may bruise your ego to apply for a program like this, but the amount of interest and principal it saves you can give you a clean slate and help keep the lights on without going into unaffordable debt.

Pittsburgh-based writer Brynne Conroy is the founder of the Femme Frugality blog and the author of “The Feminist Financial Handbook.” She is a regular contributor to The Penny Hoarder.

Rewards credit cards entice consumers with travel points, cash back for swipes and unique perks like cell phone protection and free baggage check at airports. While these longer-term rewards and benefits are important to consider when opening a credit card, you should also pay attention to the sign-up bonus, sometimes called a welcome offer.

The best credit card sign-up bonuses can put serious cash in your pocket just for using the card for everyday expenses. Each bonus will have its own terms, usually something like:

• Earn X amount of cash, points or miles for Y amount of dollars spent in Z amount of months.

How much can you earn? That depends on the card. Credit card sign-up bonuses can reach 100,000 points or $800 cash back — or more. Sometimes, to get the best credit card sign-up bonuses on offer, you’ve got to be willing to pay a higher annual fee or spend more money with the card in a short amount of time.

Choosing a credit card solely for the sign-up bonus may not be the best long-term plan, but if you’ve got a healthy mix of credit cards in your wallet already and want to open another exclusively for the welcome perks, it might not be a bad idea. Not sure where to start? We’ve assembled a list of the seven best credit cards with sign-up bonuses to guide your search.

The Best Credit Cards with Sign Up Bonuses

• Chase Sapphire Preferred Card: Best Overall Credit Card for Bonuses
• Discover it Cash Back: Best Cash Back Credit Card for Sign-Up Bonuses
• Capital One Venture Rewards Credit Card: Best Travel Credit Card for Sign-Up Bonuses
• United Quest Card: Best Airline Credit Card for Sign-Up Bonuses
• Marriott Bonvoy Boundless Credit Card : Best Hotel Credit Card for Sign-Up Bonuses
• The Platinum Card from American Express: Biggest Credit Card Sign-Up Bonus
• Chase Freedom Flex: Easiest-to-Earn Credit Card Sign-Up Bonus

Discover it Cash Back

Best Cash Back Card for Sign-Up Bonuses

Key Features

• Unlimited Cashback Match bonus program
• Up to 5% cash back
• No annual fee or foreign transaction fees

If you’re willing to wait a year to get your hands on your bonus, the Discover it Cash Back can pay off big time: Whatever cash back you earn in your first year, Discover will match. That’s double cash back on every purchase. In addition to this unique sign-up bonus, the Discover it Cash Back card has no annual fee or foreign transaction fee and offers rotating 5% cash back bonus categories.

Discover it Cash Back

Annual fee

$0

Rewards

1% to 5% cash back

Sign-up bonus

Unlimited Cashback Match

Regular APR

14.99% to 25.99%

Foreign transaction fees

No foreign transaction fee

Balance transfer fees

3% intro balance transfer fee; 5% balance transfer fee on future balance transfers

Minimum credit score requirement

Good to excellent credit (670 and higher)

More Information About Discover it Cash Back

The Discover it Cash Back is one of the top cash back rewards credit cards, not just because of its great bonus program but also because of its unique rotating cash back rewards. For 2022, cardholders earn 5% cash back in select categories depending on the month:

 

• January to March: 5% cash back at grocery stores, gyms and fitness clubs

• April to June: 5% cash back at Target and gas stations

• July to September: 5% cash back at restaurants and when spending via PayPal
• October to December: 5% cash back on Amazon and when spending via digital wallets

The 5% cash back is capped at $1,500 in purchases in the relevant category per quarter. Consumers earn 1% cash back on all other eligible purchases, year-round.

Since the bonus program doubles your cash back total for the entire first year from account opening, you can earn a significant chunk of change — and all for no annual fee. But it’s not just annual fees; you won’t pay any foreign transaction fees for swiping abroad either.

The Discover it Cash Back isn’t the only Discover credit card to offer this unique sign-up bonus. Consumers who open a Discover it Student Cash Back card or even the Discover it Secured Credit Card can access the same Cashback Match. That’s why we named the latter the best secured credit card for borrowers with bad credit.

Capital One Venture Rewards Credit Card

Capital One Venture Rewards Credit Card

Key Features

• 75,000 bonus miles
• Multiple travel perks
• No foreign transaction fees

The Capital One Venture Rewards Credit Card is a top travel card with a sign-up bonus. For a low annual fee, you’ll earn between 2x and 5x points per dollar spent, and you’ll get 75,000 bonus points to boot. The lack of foreign transaction fees, two lounge visits, and TSA Precheck or Global Entry reimbursement make this a high-quality travel card without the high fees of more luxe travel cards.

Capital One Venture Rewards Credit Card

Annual fee

$95

Rewards

2x to 5x miles per dollar

Sign-up bonus

75,000 bonus miles

Regular APR

18.99% to 26.99%

Foreign transaction fees

No foreign transaction fee

Balance transfer fees

None for balance transfers at regular APR; 3% per transfer for any promotional APR

Minimum credit score requirement

Excellent credit (740 and higher)

More Information About Capital One Venture Rewards Credit Card

You’ll find travel credit cards offering more perks and higher rewards rates than the Capital One Venture Rewards Credit Card — but they usually come at a higher annual fee. We love how much this credit card offers for what’s considered a low annual fee ($95) in the travel credit card arena. You’ll get two free lounge visits every year, automatic Hertz Five Star Status and up to a $100 statement credit for Global Entry or TSA PreCheck.

More importantly, you can earn 75,000 bonus miles for spending $4,000 on purchases in the first three months from account opening. Plus, you can earn 5x points when booking hotels and rental cars through Capital One Travel — and unlimited 2x points on all other eligible purchases.

With no foreign transaction fees, 24-hour travel assistance, rental car insurance and travel accident insurance, the Capital One Venture Rewards Credit Card should be in every serious traveler’s wallet.

United Quest Card

Best Airline Card for Sign-Up Bonuses

Key Features

• $125 annual United purchase credit
• United anniversary award flight credits
• Referral bonuses

Airline credit cards serve a niche audience — you’ve got to be a loyalist to a specific airline for them to make sense. But if you’re happy to choose an airline based on the credit card you open, go for the United Quest Card. Hands down, it’s got one of the best bonus programs of any airline credit card but also offers a reasonable annual fee, great rewards and even more travel perks.

United Quest Card

Annual fee

$250

Rewards

1x to 3x miles

Sign-up bonus

70,000 bonus miles

Regular APR

19.49% to 26.49%

Foreign transaction fees

No foreign transaction fee

Balance transfer fees

5% per balance transfer ($5 minimum balance transfer fee)

Minimum credit score requirement

Good to excellent credit (670 and higher)

More Information About United Quest Card

With the United Quest Card, you can earn 70,000 bonus miles when you spend $4,000 in purchases in the first three months from account opening. You can also earn 10,000 bonus miles for every referral — up to 100,000 bonus miles a year. But the United Quest Card offers value far beyond welcome offers and referral bonuses.

For starters, you’ll earn a $125 statement credit each year for United purchases made on the Quest Card. Beyond that, you can expect to earn:

• 3x miles for every dollar spent on United Airlines purchases (after the $125 in statement credits)
• 2x miles for every dollar spent on all other travel purchases, including airfare, hotels, rental cars, cruises, rideshare, tolls, trains, local transit and more
• 2x miles for every dollar spent on dining, which includes eligible delivery services
• 2x miles for every dollar spent on select streaming services
• 1x mile for every dollar spent on all other eligible purchases

Cardholders also get 5,000 miles back after taking a United or United Express flight booked with miles — up to two times a year. That’s up to 10,000 extra miles just for booking the United flights you probably planned to purchase anyway.

Finally, you won’t be charged a foreign transaction fee for swiping your United Quest Card abroad, and you’ll get two free checked bags for every trip ($320 in savings for every round trip you book).

Marriott Bonvoy Boundless Credit Card

Best Hotel Card for Sign-Up Bonuses

Key Features

• Up to 17x points at Marriott
• Free Night Award each year
• Referral bonuses

Like with airline cards, hotel credit cards are targeted at travelers who are loyal to a specific hotel chain. Luckily, Marriott has more than 7,000 participating hotels, making the Marriott Bonvoy Boundless Credit Card easy to use for most travelers. You’ll enjoy up to 17x points for every dollar spent at a Marriott — plus, you’ll start off with 100,000 bonus points if you meet the requirements.

Marriott Bonvoy Boundless Credit Card

Annual fee

$95

Rewards

1x to 17x points

Sign-up bonus

100,000 bonus points

Regular APR

18.99% to 25.99%

Foreign transaction fees

No foreign transaction fee

Balance transfer fees

5% per balance transfer ($5 minimum balance transfer fee)

Minimum credit score requirement

Good to excellent credit (670 and higher)

More Information About Marriott Bonvoy Boundless Credit Card

To earn the sign-up bonus from the Marriott Bonvoy Boundless Credit Card, just make $3,000 in purchases in the first three months from account opening. If you do, you’ll receive 100,000 bonus points, good for roughly $900 in hotel stays with Marriott. You can also rack up 40,000 bonus points for each referral, up to 200,000 bonus points a year.

Beyond the sign-up bonus, the Boundless card offers a tremendous rewards rate — when you spend at Marriott hotels. Again, hotel cards really only make sense for frequent travelers loyal to hotel chains. If you regularly stay at a Marriott, however, this card can pay off big time. You’ll earn:

• Up to 17x points for spending on Marriott hotels
  • 6x points for booking hotels with the card
  • 10x points from being a Marriott Bonvoy member
  • 1x point from Marriott with Silver Elite Status (you get this perk for being a cardmember)
• 3x points for every dollar spent on groceries, gas and dining (up to $6,000 spent)
• 2x points for every dollar on all other eligible purchases

Another perk of this card: You get one Free Night Award each year on your account anniversary, valid for one night at any hotel with a redemption level up to 35,000 points.

 

The Platinum Card from American Express

Biggest Card Sign-Up Bonus

Key Features

• Abundance of statement credits
• High rewards points on travel purchases
• Access to travel counselors

By a large margin, the Platinum Card from American Express offers the best credit card sign-up bonus, the best statement credits and the best perks for cardholders. The only problem? It costs nearly $700 a year to keep in your wallet. But if you’re a credit card power user who will make the most out of this Amex, it could be worth your while: 125,000 bonus points are ready to be claimed.

The Platinum Card from American Express

Annual fee

$695

Rewards

1x to 5x points

Sign-up bonus

125,000 bonus points

Regular APR

18.99% to 25.99%

Foreign transaction fees

No foreign transaction fee

Balance transfer fees

Balance transfers not permitted

Minimum credit score requirement

Good to excellent credit (670 and higher)

More Information About The Platinum Card from American Express

Let’s address the elephant in the room: At $695 a year, the Platinum Card from American Express is the most expensive credit card on our list. But you’ll get a lot more perks and bonus points with this card than you would with any other card that we ranked.

For starters, you’ll get 125,000 bonus points after you spend $6,000 on purchases in the first six months from account opening. Points are good for purchases with more than 500 leading brands in dining, travel, entertainment and shopping.

You’ll earn more than just the bonus points, too. Here’s how the Platinum Card’s rewards rate breaks down:

• 5x points for every dollar spent on flights (up to $500,000 spent each year)
• 5x points on prepaid hotels (booked through AmexTravel.com)
• 1x points on all other eligible purchases

But this card is about so much more than bonus points and rewards points. Here are just some of the perks you’ll get from the Platinum Card:

• Up to $100 reimbursement for TSA PreCheck or Global Entry
• $200 annual airline fee credit for expenses such as flight changes and checked bags
• $200 annual hotel credit on prepaid Fine Hotels and Resorts
• $15 monthly Uber Cash (plus an extra $20 in December) for rideshare and Uber Eats
• $20 monthly digital entertainment credit (The New York Times, Disney+, The Disney Bundle, ESPN+, Hulu, Audible, Peacock and SiriusXM)
• $25 monthly credit for eligible Equinox club memberships
• $155 annual Walmart+ credit
• $100 annual statement credits for purchases made at Saks Fifth Avenue
• $189 back each year for CLEAR membership

Altogether, that’s nearly $1,700, more than double the annual fee. Plus, with the Platinum Card, you won’t ever pay a foreign transaction fee, you’ll get special status with multiple hotel chains, and you’ll get access to the Global Lounge Collection (more than 1,400 around the world).

Chase Freedom Flex

Easiest-to-Earn Sign-Up Bonus

Key Features

• Up to $800 welcome bonus
• Revolving 5% cash back categories
• No annual fee

Tracking Marriott points or United miles can get challenging; the Chase Freedom Flex makes it much simpler. Just earn cash back with every swipe — and it only takes $500 in purchases over three months to earn the $200 bonus. And for the first year, you’ll earn 5% cash back on groceries as an added bonus, up to $600 in additional cash back.

Chase Freedom Flex

Annual fee

$0

Rewards

1% to 5% cash back

Sign-up bonus

Up to $800

Regular APR

17.99% to 26.74%

Foreign transaction fees

3% per transaction

Balance transfer fees

3% intro balance transfer fee ($5 minimum fee); 5% balance transfer fee on future balance transfers

Minimum credit score requirement

Good to excellent credit (670 and higher)

More Information About Chase Freedom Flex

The Chase Freedom Flex is a great no-frills cash back credit card. Earning the standard $200 sign-up bonus is easy; just spend $500 in the first three months. But what sets this bonus offer apart from similar offers (the Capital One Quicksilver’s $200 bonus is just as easy to earn) is the additional 5% grocery cash back bonus offered through the first year. With 5% cash back on every grocery purchase up to $12,000, you can add $600 to your full sign-up bonus offer within the first year.

Speaking of 5% cash back, the Chase Freedom Flex always has some kind of 5% cash back offer. For 2022, cardholders earn 5% cash back per the following schedule:

• January to March: 5% cash back at grocery stores (excludes Walmart and Target) and on eBay purchases

• April to June: 5% cash back on select streaming services and on Amazon purchases

• July to September: 5% cash back at movie theaters, car rental agencies and gas stations, as well as on select live entertainment
• October to December: 5% cash back at Walmart and purchases via PayPal

Cardholders always earn 5% cash back on travel purchased through Chase Ultimate Rewards, plus 3% cash back on restaurant and drugstore purchases and 1% cashback on all other eligible purchases.

The Chase Freedom Flex doesn’t boast a bunch of special travel perks, and you’ll pay a foreign transaction fee when swiping abroad. But overall, this card is a great cash back option, and earning the bonus requires little effort. Plus, you can earn up to $500 a year in referral bonuses ($100 per referral).

What Is a Sign-Up Bonus?

A sign-up bonus on a credit card is a reward that consumers can earn by meeting some basic criteria within a set number of months from opening the card. Once the consumer has met the requirements, they’ll earn a bonus, usually in the form of cash, points or miles.

Credit card issuers use sign-up bonuses to entice new consumers to apply for a credit card. These bonuses are typically only available on rewards credit cards, like cash back credit cards and travel credit cards, meaning they’re aimed at borrowers with good to excellent credit scores.

Credit card sign-up bonuses are mostly formulaic: Earn X amount of cash (or points or miles) when you spend Y amount of money on the card in Z amount of months. Some of the best credit card sign-up bonuses include additional incentives, like extra cash back for the first year in certain spend categories or even cash back matches for the first year.

Types of Sign-Up Bonuses

Welcome offers are usually straightforward, but some credit card issuers get more creative with their sign-up bonus programs. Here are some of the common sign-up bonuses you may encounter when shopping around for credit cards:

Standard Sign-Up Bonus

The most straightforward credit card welcome offer is the promise of a set amount of cash, miles or points for a set amount of spending in a set amount of months.

For example, the Capital One Quicksilver card offers one of the most straightforward bonus programs available: Spend $500 in the first three months, and you’ll earn a $200 bonus.

Matching Bonus

Discover’s suite of rewards credit cards is famous for Discover’s unique bonus program. Rather than earn your reward after a few months, you’ll have to hold out for a whole year — but it’s totally worth it.

In these matching bonus programs, credit card issuers like Discover offer an unlimited bonus match. Whatever you earn in cash back during your first year, the credit credit issuer will double, dollar-for-dollar.

We named the Discover it Cash Back card to our list of the best credit cards with sign-up bonuses for its Unlimited Cashback Match program, but other rewards cards in the Discover family offer this program as well. For example, students should consider the Discover it Student Cash Back. In fact, we just named it the overall best student credit card available.

Bonus Rewards

Some credit card issuers may offer a bonus on top of the standard sign-up bonus. This typically looks like extra cash back or points in specific spend categories for a set amount of time.

For example, the Chase Freedom Flex, which earned a spot on our list of the best credit cards for sign-up bonuses, is currently offering a $200 bonus for $500 in purchases within the first three months and 5% cash back at grocery stores for the first year (up to $12,000 spent). The latter is worth an additional $600.

Dual-Stage Bonus

Though it’s less common, some credit card issuers may offer double bonuses. You’ll earn a set amount of cash for meeting one level of criteria — and then a second bonus if you meet a second set of criteria.

Take the United Business Card, for example. This airline credit card is designed for business travelers who regularly fly United, so it has a limited audience — but the welcome bonus is enticing for those who fit the bill. You’ll get 75,000 bonus miles if you spend $5,000 in the first three months and then another 75,000 bonus points if you spend $20,000 total in your first six months.

Approval Bonus

Less commonly, a credit card may come with an instant bonus upon approval. While you won’t find offers like this from Chase, Capital One, Citi or American Express, retailers are more likely to incentivize card sign-ups with approval bonuses.

For example, the Amazon Prime Rewards Visa Card offers a $100 Amazon gift card the moment you’re approved.

Sign-up bonuses aren’t the only type of credit card bonus. For example, in addition to the welcome offer, the Chase Sapphire Preferred Card offers referral bonuses (up to 75,000 points a year) and an anniversary bonus (10% of your total purchases for the year).

Pros and Cons of Credit Cards With Welcome Offers

Welcome offers on credit cards can put extra cash in your pocket, but they may also encourage increased spending and add to your credit card debt. Weigh the pros and cons of credit card sign-up bonuses before applying.

What to Look For in a Credit Card Sign-Up Bonus

The actual bonus amount — and the steps required to earn the bonus — are the number one thing you should consider when choosing a credit card solely for its welcome bonus. But don’t stop there: You should also consider a card’s fees, rewards and interest rate.

Bonus Amount

When you’re researching the best credit cards for sign-up bonuses, you’ll obviously want to find a card with a generous welcome offer. If you’re considering travel cards that pay out points or miles instead of cash back, make sure you understand the value of those points and miles.

And don’t just look at the bonus amount. When considering similar cards, review what each card requires for you to earn the bonus. If one welcome offer is easier to obtain than the other and the cards are otherwise similar, go with that option.

A sign-up bonus can be enticing, but you should consider the long-term value of a credit card before opening. For example, if the card has a high annual fee and you won’t use it enough to get continued value after the bonus, it’s not a good fit for your wallet.

Annual Fee

Some rewards credit cards have no annual fee, but their cash back or travel points tend to be lower than what you’d get with a card charging a fee. That holds true with welcome bonuses as well. If you’re willing to pay an annual fee, the bonus is likely to be larger.

Just remember: The welcome bonus is a one-time thing, but you’ll have to pay that annual fee each year. Make sure that the credit card offers enough long-term perks to justify any fee.

Additional Fees

It’s not just the annual fee you should consider. If you travel abroad often, find a card that won’t charge a foreign transaction fee every time you swipe. And if you’re considering a balance transfer to consolidate debt, you’ll want a card with low balance transfer fees.

If you’re really serious about a balance transfer, however, don’t prioritize a sign-up bonus. Instead, check out our list of the best balance transfer credit cards to find one with a 0% intro APR and low fees.

Rewards Rate

Credit card sign-up bonuses offer a one-time value. Some bonuses are big enough to make a serious (but temporary) impact on your finances, but after you’ve spent the money, you’re back at square one.

To make sure you’ll continue getting value out of your credit card, look for one with a stellar rewards rate. If you travel often — especially if you prefer luxury hotels and first-class flight accommodations — consider a travel card with points or miles. Otherwise, a cash back credit card that rewards everyday purchases may be right for you.

Additional Perks

Not all credit cards are created equal. Read the fine print to see what additional perks they offer. For example, some credit cards on our list offer referral bonuses while others have amazing statement credits for expenses like Disney+ and airfare. Choose a card with a great sign-up bonus — but don’t forget to compare the other perks as well.

APR

In general, rewards credit cards carry higher-than-average interest rates. If you think you’ll struggle to pay off your card in full each month, don’t bother with a rewards card. Otherwise, that interest will quickly outweigh any sign-up bonus you earn early on.

Frequently Asked Questions (FAQs) About Sign-up Bonus Credit Cards

We’ve found the answers to the most commonly asked questions about sign-up bonus credit cards.

Contributor Timothy Moore is a writer and editor in Cincinnati who covers banks, loans, insurance, travel and automotive topics for The Penny Hoarder.

Credit cards can be a useful tool in your personal finance arsenal. These cards can help you build credit, cover costs in an emergency situation, or just earn you points toward travel and cash back.

While credit cards can be important to build your credit history, it’s essential that you charge any purchases mindfully. Because if you don’t pay off your credit statement at the end of each month, your balance will accrue interest. And unless you have a 0% intro APR or other special-rate card, these fees can add up fast: The average credit card interest rate was 16.27% in August 2022, the most recent figure provided, according to the U.S. Federal Reserve.

Whether you’re in the market for your first credit card or are pursuing the latest rewards credit cards, here’s an overview of what the current landscape looks like.

What Is the Average Interest Rate for a Credit Card?

The average interest rate on a credit card is typically somewhere between 10% and 30%. Depending on the category of the card and your creditworthiness, you’ll traditionally pay more or less interest.

Credit card interest rates can fluctuate, and rates are currently on the rise: The average credit card interest rate has increased over a six-month period in 2022, from 16.17% to 16.65%, according to CNN. Credit card balances — and debt loads — have also grown.

The Consumer Financial Protection Bureau (CFPB) reviews the consumer credit card market — practices of credit card issuers, consumer debt levels, etc. — every two years. In the 2021 Consumer Credit Card Market Report, authors reported on credit scores and the average interest rates and reported the following.

Going deeper, here’s information on credit card rates by card type in the United States, according to Statista in a 2019 survey.

*This rate was pulled from a CNBC article in 2022.

APR stands for annual percentage rate, the yearly interest of a credit card charged to the borrower. And as you can see in the tables, credit card APR can vary quite a bit — the average credit card APR will look different for each card and each applicant.

Both the card type and a person’a creditworthiness can influence interest rates on a credit card. For example, a secured credit card — one that a consumer uses to help build their payment history or credit to raise their credit score — usually carries a higher interest rate. Whereas a person with a high credit score and solid payment history would likely be approved for a rewards credit card with a lower (yet variable) APR.

Ultimately, the average credit card interest rate will vary depending on several factors. With that said, there are ways you can reduce interest rates on your credit card.

How to Reduce Your Interest Rate on a Credit Card

There are multiple ways for you to reduce the interest rate on your credit card. Here’s how you can trim your rate, either by sticking with your current card or through other methods.

• Do a balance transfer. If you have a balance on a credit card with a high interest rate, you might be able to transfer your balance onto another credit card. Balance transfer credit cards usually charge varying rates (typically, a set price or a percentage of the balance amount you want to transfer), and some cards offer special rates like 0% intro APR for balances transferred within the first 60 days of you opening an account, for example. There are many balance transfer cards out there, but you typically need a Good or better credit score to qualify for one.

• Take advantage of intro offers on credit cards. Jumping off that last point, there are tons of cards that offer special offers for new cardholders. You could look for a credit card with a 0% introductory APR or pursue one that offers a no-interest-generating balance transfer for 12+ months so you can pay off an existing amount over time.

• Apply for a consolidation loan. A debt consolidation loan offers a path of relief for people struggling to manage credit card or other high-interest debt loads. Debt consolidation or personal loans are avenues to explore for generally better APR and loan terms if you find yourself unable to pay down your credit card debt under current circumstances.

You can also call your credit card issuer and see if you can negotiate a more favorable interest rate or raise your credit limit. Your mileage will vary, but If you’re a longtime client and have made regular, on-time payments, you have some leverage.

Finally, you can pay off your balance on your card each month to avoid accruing interest charges to your account altogether. If you’re in a position to do so, that’s your best-case scenario. (And that way you won’t need to factor in credit card APR so highly in your decision when choosing among different cards.)

How to Improve Your Credit Score

If you have a less-than-stellar credit history, you can take action to improve your creditworthiness. It won’t be an overnight fix, but with diligence, consistency and good habits, you can raise your credit score steadily over a period of time.

Here are five ways to improve your credit score:

1. Pay your bills on time. Missed and late payments can dent your credit score and cause all sorts of issues for your finances. Create a budget and set regular bill payments to autopay. And again, do your best to pay off your credit card bill fully at the end of each statement cycle to avoid paying interest on your credit card purchases.
2. Check your credit score regularly. A service like Credit Karma is free to use and can keep you up-to-date on your credit history. You can also access your reports for free at AnnualCreditReport.com. Many banks and credit card companies (where you’re a customer) will provide you with your credit score, too.
3. Prioritize paying down high-interest debt. Credit card interest, loan interest — it all adds up. Review the amounts, conditions and terms for all your interest-bearing debt and make a plan to pay it down. Make extra payments toward your debt when you can, too, to avoid paying more interest over time.
4. Keep your old accounts open. A long credit history contributes to your overall credit score, so it’s likely in your best interest to leave your credit card accounts open (though you’ll want to assess your options if a particular card has a high annual fee, for example). You can assign certain cards to regular bill payments to keep your cards both open and active.
5. Mindfully apply for credit. Building credit is important, but it’s essential that you do so the right way. For example, store credit cards usually have a high APR and you can only use them at a particular retailer, whereas cash back credit cards might not have as high of an APR, can be used anywhere they’re accepted and can net you regular rewards. Be selective when opening new credit card accounts and applying for any loans. Don’t take on credit card debt willy nilly in the name of building credit, especially if you don’t have a debt-payoff plan.

It’s especially helpful to raise your credit score ahead of a big purchase. If you’re looking to buy a house in a year and a half, for instance, you’ll want to work on shaping up your credit now to improve your chances of qualifying for a mortgage at a good rate later.

Credit card interest rates may be rising, but don’t let that deter you from applying for a card — as long as you’ve done your research and are responsible with it. And keep in mind that credit card accounts are not one-size-fits-all; it’s important that you review credit card APR, but also the other fees and potential rewards that are available with it.

Contributor Kathleen Garvin (@itskgarvin) is a personal finance writer based in St. Petersburg, Florida, and former editor and marketer at The Penny Hoarder. She owns a content-writing business and her work has appeared in U.S. News, Clark.com and Well Kept Wallet.

There are huge differences between swiping a debit card and swiping a credit card. And these differences go far beyond whether or not you’re racking up credit card debt.

Debit and credit cards give you different protection against fraudulent purchases, separate types of rewards, and have different effects on your ability to borrow money in the future. Here’s what to consider before you decide which type of plastic to pull out of your wallet.

What Is a Debit Card?

When you make a purchase with a debit card, the money will be drawn from an account where you already have money saved. Generally, debit cards are linked to checking accounts, but you can also get a debit card linked to your savings account or a prepaid card balance.

Debit Card Linked to Your Bank Account

Your bank will likely issue you a debit card linked to your checking account for free. Sometimes, you can get a free debit card for your savings account, too, though you may have to pay a small card issuance fee.

Debit Card Linked to Your Checking Account

When you are using a debit card linked to your checking account, the money will automatically be deducted from your account balance. Depending on the retailer and your bank, this ‘automatic’ transaction might not be immediate – it could take a couple days to reflect on your online statement.

Debit Card Linked to Your Savings Account

When your debit card is linked to your savings account, your bank may place restrictions on how many withdrawals (or transfers) you can make every month. Until April 24, 2020, there was a federal rule called Regulation D that required banks to set this limit at six withdrawals or transactions per month.

But Regulation D is no longer in effect. Just because the federal government has removed the regulation doesn’t mean every single bank has followed suit. Your bank may impose fees if you make more than a set amount of outbound transactions per month – it’s usually six as a matter of legacy, but check the fine print for your account.

Types of Debit Cards

There are four types of commonly used debit cards.

Standard Debit Card

This is the workhorse debit card that you likely use multiple times a day. Honestly, it’s practically a way of life. The standard debit card is tied to your checking account or a money market account. With a standard debit card you can pay for goods and services in person or online, plus you can use it to withdraw money from ATMs. There is likely a cash limit to withdrawals and some institutions only let you withdraw money a certain amount of times per day.

ATM-Only Card

Less common and more restrictive than a standard debit card is the ATM-only card. With this limited-use card you can withdraw money from your checking and money-market accounts only from an ATM. Some issuers let you tie the card to your savings account.

Prepaid Debit Cards

Prepaid debit cards can be purchased at major retailers or drug stores. You pay a certain amount of money to load the card, and then you’ll be able to use it to make purchases wherever that card is accepted. Ideally, you’d look for a prepaid card issued by a major credit card company like MasterCard or Visa to ensure it will be accepted.

Prepaid cards are usually used by people who do not qualify for a traditional checking account because their name has ended up in ChexSystems. But prepaid cards tend to come with excessive fees that can eat away at your balance. A better option may be to open a checking account with a bank that does not use ChexSystems and will give you a second chance checking account.

EBT Debit Cards

Technically, EBT cards are debit cards, too. You might receive an EBT debit card so you can access your SNAP/food stamp or cash benefits from the state. To get an EBT debit card, you’ll need to apply and qualify for specific social welfare programming.

Because EBT debit cards are so different from other types of debit cards, we won’t dig too deep into them in our analysis today.

What Is a Credit Card?

When you swipe a credit card, you’re borrowing money from the bank. At the end of your statement cycle every month, you’ll be required to pay the bank back in full — or pay a hefty interest rate.

If you can’t pay the full balance, it’s advisable to at least pay the minimum balance due. That’s because if you do pay this amount, it could show up as a positive mark on your credit report. If you don’t – and you’re at least 30 days late – it could show up as a negative mark. Negative marks can lower your credit score in an especially big way when they’re tied to late payments.

Unsecured Credit Cards

Most credit cards are unsecured. That means you don’t have to put down a deposit or any collateral to open the credit card. If you meet the issuing financial institution’s minimum credit requirements, they’ll let you borrow money as needed, up to a set credit limit.

Unsecured cards can be issued by a bank or other financial institution directly. You’ll also frequently see unsecured credit cards issued as store credit cards, branded by a particular retailer.

Secured Credit Cards

Don’t meet the bank’s minimum credit requirements? Some financial institutions will help you rebuild your credit by issuing a secured credit card. To open this credit card, you will need to put down a deposit.

Let’s say you put down a deposit of $500. The bank will issue you a line of credit for $500. They know you’re good for it because they’ve already got your money in their pocket.

Then, when you swipe and borrow with your secured credit card, hopefully you’re paying the bank back every month. Ideally you’ll pay in full so you don’t have to pay interest charges, but the entire point of this card is to pay at least the minimum due every month to start putting some positive marks on your credit report, which could up your credit score.

If you use this card responsibly for a set period of time — anywhere from six months to two years – most financial institutions will usually give you the opportunity to upgrade to an unsecured credit card. If you take them up on the offer, your deposit will be returned to you.

Pros & Cons of Debit vs Credit Cards

There is a time and season for everything. That includes credit and debit cards. Which one you choose to use will depend entirely on your personal circumstances. Let’s look at some of the pros and cons of each.

Credit Cards

The Upside of Credit Cards

Credit cards are more secure than debit cards. That’s why some experts recommend using them over debit cards for online purchases. If your credit card information is stolen and then used to make purchases, there is a federal law called the Fair Credit Billing Act that restricts your burden of the fraudulent charges to $50. But it isn’t hard to find a credit card company who will issue you a $0 liability benefit.

Plus, if there is a fraudulent charge made on your account, with credit cards you have some time to sort it out. You should immediately report the issue as soon as you become aware of it, but it’s not like your checking account where a fraudulent charge could cause your rent check to bounce.

Credit cards can also help you establish or rebuild your credit history when used responsibly. A positive credit history not only means more banks will be willing to lend you money, but also that they’ll be willing to do so at a lower interest rate.

Finally, credit cards tend to come with extra perks like cash back, airline miles, or points towards free stays at hotels. These freebies aren’t available with debit cards.

It’s not uncommon for the signup offer alone on a travel rewards credit card to end up equating to $500 – $1,000 worth of travel freebies. Then, there are the points you earn on each and every purchase.

Cash back credit cards don’t come with signup bonuses as regularly, but the rewards are more flexible. If you’re earning 1% – 5% cash back on every purchase, often you’ll be able to use this cash back to pay off a portion of your credit card bill. Or, in many cases, you could even transfer the cash directly to your bank account.

The Downside of Credit Cards

It’s important to remember that the reason credit card issuers offer such great perks is because enough people get into trouble with credit cards that they’re still able to turn a profit. A free plane ticket isn’t worth paying hundreds or thousands of dollars in interest. If you’re not paying off your credit card bill in full every month, the bank is likely pulling in a bigger “reward” than you are.

Plus, there are other expenses to worry about — like annual fees. Some credit card companies will waive this fee for the first year, but then you’ll be charged every year on your credit card anniversary.

And make no mistake: Interest rates on credit cards tend to be extremely high. It’s rare to find a card that offers an APR in the single digits. Most cards have an APR range with a high end between 20% and 30%.

This makes credit card debt an extremely expensive way to borrow – though they are still cheaper than payday loans, or even some personal loans if you don’t have perfect credit. If you dare to take out a cash advance against your card, the rate can climb even higher.

Potential Impact on Your Credit Scores

If you do get into trouble with credit cards to a point where you’re making late payments, it’s highly likely that you’ll start to see negative line items on your credit report. This can lower your credit score, which will make less banks willing to lend you money in the future. When they do, it is likely to be with a higher interest rate.

Aside from late payments, another key factor in your credit score is credit utilization. To figure out your credit utilization, you’d take the total amount of money you currently owe and divide it by the total amount of your credit lines.

Let’s say you have three credit cards. You’ve borrowed $0 from a card with a $2,000 limit, $750 from a card with a $1,000 limit, and $150 from a card with a $500 limit. The total amount you borrowed was $900, and your total credit limit is $3,500. That makes your credit utilization about 26%.

Generally speaking, you want to keep your credit utilization below 30% to preserve your credit score.

Debit Cards

The Upside of Debit Cards

When we look at the behavioral aspect of personal finance, debit cards tend to be a lot safer. That’s because you’re not incurring debt when you swipe your debit card. Because you’re not incurring debt, the purchases you make with your debit card will not directly affect your credit report or credit score.

Also because you’re not borrowing money, you won’t have to worry about racking up expensive interest charges. Debit cards tend not to come with annual fees like a credit card would, but the checking account your debit card is linked to might come with a monthly maintenance fee – even though the debit card itself isn’t costing you anything.

Generally speaking, you won’t be able to spend more money than you have. In some instances, you may be able to overdraw your account (which is likely to come with an overdraft fee,) but most banks won’t let you do this more than once or twice before freezing your account.

The Downside of Debit Cards

While debit cards won’t hurt your credit report, they also won’t help it. Responsibly managing your checking account doesn’t matter in the eyes of the credit bureaus.

Debit cards also make you more vulnerable in instances of card theft or fraudulent purchases. The money behind your debit card is real, and it is yours. If someone takes it, even after you report the theft it could take a not-insignificant amount of time before the bank corrects your balance. Plus, you can be held liable for up to $500 of the loss rather than the $50 max for credit cards.

Debit cards rarely come with the fancy perks you’ll find with credit cards, either. Coming across a debit card that offers any version of cash back or airline miles is like spotting a double rainbow.

Alternate Rewards for Debit Cards

That’s not to say there’s never any bonuses for the bank account associated with your debit card, though. Signup bonuses (typically issued in a lump sum of cash) are common, and tend to be dramatically larger on savings accounts over checking accounts.

Checking account bonuses tend to be found on accounts with higher balance requirements and monthly maintenance fees. These bonuses tend to be linked to the amount of direct deposits you receive within the first 30, 60, or 90 days of account opening. It’s not uncommon to see these bonuses range from $100-$300, but they tend to be on the lower end of that spectrum.

Savings account bonuses are a little larger, and tend to hinge on the amount of deposits made over a 30-, 60- or 90-day period – whether they’re direct deposits or not. The quantity of the deposit requirements tends to be larger. Think five digits.

But savings account bonuses also tend to be higher. It’s not uncommon to see offers for $300-$500 if you meet the bonus offer’s requirements.

Should I Use a Credit Card or a Debit Card?

The decision to use a debit or credit card is contextual and should be considered with nuance. If you know you tend to have trouble with overspending, it might be wise to shy away from credit card use. If you’re still concerned about security while shopping online, you could use a third-party service — like PayPal or Venmo — for additional potential protections.

If you have a history of using credit cards responsibly  and pay them off every month without fail, it might be worth getting a free hotel room or two to swipe the plastic. It’s also safer to use a credit card if you’re worried about fraud.

But remember that no one is perfect at anything. You’re only good with credit cards until you’re not. With a credit card, any one among us is just one financial emergency or indulgent purchase away from sky-high interest rates and a spotty credit report.

Pittsburgh-based writer Brynne Conroy is the founder of the Femme Frugality blog and the author of “The Feminist Financial Handbook.” She is a regular contributor to The Penny Hoarder.

Whether you have a big purchase on the horizon or want to take some time to pay down an amount over a period of time, a 0% intro APR credit card could be a good option for you.

APR stands for annual percentage rate. This rate represents the yearly interest of a credit card (or other lines of credit, like a loan) charged to the borrower. While this number can be pretty high — the average hovered around 16% in summer 2022, according to the U.S. Federal Reserve — lower-interest rates are available. Enter 0% APR credit cards.

This article reviews our picks for the best 0% APR credit cards, including the lengths of interest-free rates, common qualifying factors, pros and cons, and what else you need to consider with these cards.

The 8 Best 0% Intro APR Credit Cards

• Wells Fargo Reflect Card: Best for Members Who Want a Long 0% APR Period
• Citi Custom Cash Card: Best for Users Who Need Time to Earn a Cash Bonus
• Chase Freedom Flex Credit Card: Best for Users to Earn Cash Back at Grocery Stores
• BankAmericard Credit Card: Best for Users Who Want Low-Fee Balance Transfers
• Capital One SavorOne Cash Rewards Credit Card: Best for Cardmembers Who Travel and Dine Out Often
• Blue Cash Everyday Card: Best for Users Who Want to Save on Streaming Costs
• Chase Freedom Unlimited Credit Card: Best for Cardmembers Who Want 1.5% Cash Back
• U.S. Bank Cash+ Visa Signature Card: Best for Users Who Value High Cash-Back Categories

Citi Custom Cash Card

Best for Extra Time to Earn a Cash Bonus

Key Features

• $200 cash back bonus
• 15 months 0% APR
• Unlimited 1% cash back

The Citi Custom Cash Card offers a variety of benefits, from a long period 0% APR period to a cash sign up bonus to 1%-5% cash back. Cardmembers can earn 5% cash back on a spend category (such as gas stations or drugstores) and then unlimited 1% cash back on all other purchases. You can redeem points a few ways, including a statement credit, check, gift card or even shop with points on Amazon.

Citi Custom Cash Card

Credit requirement

Good to Excellent

Annual fee

$0

Intro APR length

15 months

Sign up bonus

$200 cash back

Balance transfer

$5 or 5% of the transfer amount (whichever is greater)

More information on Citi Custom Cash Card

To earn the $200 cash back bonus, users must spend $1,500 on eligible purchases in the first six months of the account opening — compared to other card bonuses, this is a pretty generous period of time. Cardmembers can earn 5% cash back on a particular spend category up to $500, and then it goes to 1% thereafter. After the intro period, the variable APR goes to 16.99%-26.99%.

Chase Freedom Flex Credit Card

Best for Cash Back at Grocery Stores

Key Features

• $200 bonus, plus 5% cash back
• 15 months 0% APR
• Up to $500 for referring friends

The Chase Freedom Flex Credit Card offers users lots of opportunities to get cash back. New members can earn a $200 cash bonus, plus 5% cash back on grocery store purchases (sans Walmart and Target) up to $12K in the first year for a possible additional $600 cash back. On top of 15 months of 0% APR, there are perks like a three-month complimentary membership to both DashPass and Instacart+, too.

Chase Freedom Flex Credit Card

Credit requirement

Good to Excellent

Annual fee

$0

Intro APR length

15 months

Sign up bonus

$200 bonus, plus 5% grocery store offer

Balance transfer fee

$5 or 3% of the transfer amount (whichever is greater)

More information on Chase Freedom Flex Credit Card

You can earn the intro $200 cash back bonus after you spend $500 in the first three months of getting the card. After the 0% intro period, the variable APR is between 17.99%-26.74%. Chase Ultimate Rewards cash rewards don’t expire as long as your account is active, and there’s no minimum amount required to redeem cash back.

BankAmericard Credit Card

Best for Low-Fee Balance Transfers

Key Features

• 21 months 0% APR
• No penalty APR
• 3% balance transfer fee

The BankAmericard Credit Card from Bank of America offers a lengthy 21-month-long 0% APR period. Compared to stipulations with other cards, the balance transfer fee with this card is a straightforward 3% (minimum of $10) for all transfers. If members have a linked Bank of America checking account, they can also take advantage of Balance Connect for overdraft protection.

BankAmericard Credit Card

Credit requirement

Good to Excellent

Annual fee

$0

Intro APR length

21 months

Sign up bonus

None

Balance transfer fee

3%

More information on BankAmericard Credit Card

For a $95 annual fee, the Premium Rewards Credit Card from Bank of America is a solid option to earn rewards, though there is no introductory APR rate or rewards or sign-up bonus. Still, it’s a good option if you need to make balance transfers or want a long intro APR. After the intro rate, a variable APR of 14.99% to 24.99% will apply. There’s also a no-penalty APR with this card, which means that making a late payment won’t automatically raise your APR.

Capital One SavorOne Cash Rewards Credit

Best for Travel and Dining Out

Key Features

• 15 months 0% APR
• $200 cash bonus
• Unlimited 5% cash back on hotels and rental cars

With the Capital One SavorOne card, clients can get an unlimited 3% cash back on dining, streaming services, grocery stores and entertainment (plus, higher cash back on travel booked through its online portal). Members can enjoy a relatively easy-to-earn $200 bonus and a lengthy 0% APR period with this card, too.

Capital One SavorOne Cash Rewards Credit

Credit requirement

Good to Excellent

Annual fee

$0

Intro APR length

15 months

Sign up bonus

$200 cash bonus

Balance transfer fee

3%

More information on Capital One SavorOne Cash Rewards Credit Card

New members can get a $200 cash bonus after spending $500 within the first three months of account opening. If you go to a lot of live events, you’ll appreciate 8% cash back on tickets at Vivid Seats, too. After the intro rate, the variable APR is 17.99%-27.99%.

Blue Cash Everyday Card

Best for Saving on Streaming Costs

Key Features

• 15 months 0% APR
• Up to $250 statement credit
• 3% cash back on groceries

With the American Express Blue Cash Everyday Card, users get 0% APR and 3% cash back on select categories for no annual fee. There’s also a new member offer of $100 cash, plus up to $150 back when the card is used to check out with PayPal. As an added bonus, users can get $7 back a month when they use their card to pay for The Disney Bundle (Disney+, Hulu and ESPN+) — that’s half off the cost.

Blue Cash Everyday Card

Credit requirement

Good to Excellent

Annual fee

$0

Intro APR length

15 months

Sign up bonus

Up to $250 statement credit

Balance transfer fee

$5 or 3% of the transfer amount (whichever is greater)

More information on Blue Cash Everyday Card

To secure the $250 statement credit, you need to spend $2,000 in six months to earn $100 and 20% back (up to $150) as a credit when you use your card on PayPal purchases in the first six months. After 15 months, the variable APR sets to 16.99%-27.99%, depending on your creditworthiness.

Chase Freedom Unlimited Credit Card

Best for 1.5% Cash Back

Key Features

• $200 cash back bonus
• 15 months 0% APR
• 3% on dining at restaurants

The Chase Freedom Unlimited Credit Card has a new-member sign-up bonus, cash-back rewards and a long 0% APR period. Users can score 3%-5% cash back on certain categories, as well as 1.5% — a half-percentage more than the typical 1% — on all other eligible purchases. Chase Ultimate Rewards don’t expire as long as the account is open, too.

Chase Freedom Unlimited Credit Card

Credit requirement

Good to Excellent

Annual fee

$0

Intro APR length

15 months

Sign up bonus

$200 cash back

Balance transfer fee

$5 or 3% of the transfer amount (whichever is greater)

More information on Chase Freedom Unlimited Credit Card

You can get $200 cash back after spending $500 in the first three months of the card. Other perks include travel and auto rental protections when you use your card. After the 0% APR period, the interest reverts to 17.99%-26.74%.

U.S. Bank Cash+ Visa Signature Card

Best for Cash-Back Categories

Key Features

• 3% balance transfer fee
• $200 reward bonus
• 5% cash back on two categories of your choice

The U.S. Bank Cash+ Visa Signature Card is an all-around solid choice for consumers who want 0% APR, cash-back rewards and a new-member bonus. Members get to choose two categories to earn 5% cash back in, such as fast food and home utilities. The U.S. Bank website also has a cash-back calculator that lets users easily see how much cash back they can earn with the card.

U.S. Bank Cash+ Visa Signature Card

Credit requirement

Good to Excellent

Annual fee

$0

Intro APR length

15 months

Sign up bonus

$200 rewards bonus

Balance transfer fee

3%

More information on U.S. Bank Cash+ Visa Signature Card

You can get a $200 rewards bonus after you spend $1,000 in eligible purchases in the first 120 days. You’ll be able to score more cash back when you make purchases online at U.S. Bank’s Rewards Center Earn Mall. After the intro rate, the variable APR will be 17.49%-27.49%.

What Is a 0% Intro APR Credit Card?

A 0% intro APR credit card is a card that does not accumulate interest on any purchases you make during a set amount of time. These cards are popular options for balance transfers and often have perks (think: bonus categories and cash rewards) like other credit cards on the market.

How Do 0% APR Credit Cards Work?

A 0% APR credit card usually has 12, 15, and even longer 0% introductory rates for new users. Once the card has reached the end of its introductory period, the cardholder will begin paying interest on any balances carried over month to month.

Pros and Cons of 0% APR Credit Cards

Like all cards, there are pros and cons when it comes to getting a 0% APR credit card.

It’s important to seek out the best 0% APR credit cards for you and your situation before you apply for one.

What to Look for in a 0% APR Credit Card

When searching for the best 0% APR credit cards, take a look at the following:

• The number of months for the 0% APR
• Qualifying balance transfers, fees and conditions (like the APR on balance transfers)
• Whether there’s a sign-up bonus and how to qualify for it
• The opportunity to earn cash rewards
• If there’s an annual fee
• Additional perks such as cell phone protection, unlimited cash back match or special savings (like an eligible delivery service)
• Any foreign transaction fees or cash advance fees
• If the credit card company has online banking or a mobile banking app

What Happens After the 0% Intro APR Period Ends?

Once the card has reached the end of its introductory period, the APR will resume to its usual rate, which will vary depending on your creditworthiness. So, for example, if you put $5,000 on a 0% APR credit card for 15 months and don’t make any payments on the amount, you’ll still owe $5,000 at the end of your introductory rate period. However, the monthly interest (say, 27.99% variable APR) will kick in, so it’s important you keep that in mind if you want to avoid that charge.

Frequently Asked Questions (FAQs) About 0% APR Credit Cards

Here are the answers to the most commonly asked questions about 0% APR credit cards.

Contributor Kathleen Garvin (@itskgarvin) is a personal finance writer based in St. Petersburg, Florida, and covers banking for The Penny Hoarder. She owns a content-writing business and her work has appeared in U.S. News, Clark.com and Well Kept Wallet.

High-interest debt can feel like a death sentence. A balance transfer credit card gives you a fighting chance at paying down that debt without drowning in even more interest charges.

With a balance transfer credit card, you can transfer existing debt from other accounts, usually for a fee. Typically, balance transfer credit cards offer qualified borrowers a 0% APR introductory period during which they can pay down their outstanding debt without earning interest on the balance.

If your credit score is in decent shape, you may be able to qualify for a balance transfer credit card. But before you apply, make sure you understand the fees, rates and terms — and know what happens if you don’t pay off the full balance by the end of the promotional period.

What Is a Balance Transfer Credit Card?

A balance transfer credit card is a type of credit card that allows borrowers to move over existing high-interest debt from other accounts. The best balance transfer credit cards will offer an introductory period, typically between six and 21 months, during which borrowers can pay off the debt without accruing any more interest.

Credit card companies usually charge a balance transfer fee between 3% and 5% for this service, though you may be able to find a select number of cards that don’t charge a balance transfer fee.

In addition to balance transfer fees, you’ll also need to consider the regular interest rate that will kick in if you don’t pay off the total transferred balance by the end of the introductory period. If the post-intro APR is high and you haven’t paid down the debt, you could end up right back in the same debt situation you’re in now.

Finally, be aware of balance transfer credit card limits. Like traditional credit cards, balance transfer cards have a credit limit — a max amount of debt you can put on the card before you’re cut off, so to speak. If your existing debt is greater than the credit limit of the balance transfer credit card, you may not be able to move over all of your outstanding debt.

How Do Balance Transfer Credit Cards Work?

With a balance transfer, a credit card company will pay off your outstanding debt with your other lender(s), then transfer that debt to a new credit card issued in your name. You’ll then make monthly payments on the new card — typically without accruing more interest for a set number of months — in an effort to pay down the debt. This usually comes with a fee.

But what is the actual process of a balance transfer? Let’s break down how balance transfers work in five easy steps:

1. Assess Your Current Debt Situation

Before searching for a balance transfer credit card, it’s important to understand the rates of your current loans. While you should aim for a balance transfer card offering a 0% interest rate during an introductory period, you may not qualify. Even so, there could be a balance transfer credit card available with a lower rate than your current credit cards.

Now’s a good time to check your credit score as well. If your score isn’t strong enough to qualify for a balance transfer card, skip the application and come up with another plan. Applying for a credit card drops your credit score temporarily — even if you’re denied.

2. Choose the Right Card for You

The market is saturated with balance transfer credit card offers, but they’re not all the same. Find a card with the right mix of features and terms for your situation.

For example, if you have a lot of debt to transfer, it may be worth it to pay a higher balance transfer fee but get a longer 0% APR introductory period. Borrowers with less debt may want to prioritize lower fees or even simple credit card perks, like cell phone protection or cash back rewards, even if it means a shorter interest-free period.

Once you’ve settled on a card, apply. Some approvals can happen in a matter of seconds, but if your credit history is a little rockier, it could take more time to get your answer. Under federal law, credit card companies have 30 days to issue approval or denial.

3. Initiate the Balance Transfer

You can typically initiate a balance transfer online or over the phone. Whichever method you choose, you’ll need the account information and the amount of debt you want to move.

4. Wait for the Balance Transfer to Go Through

Balance transfers don’t happen immediately. It could take a few days — or even a few weeks — for the new credit card company to pay off your outstanding debts and add the debt to your new credit card.

5. Pay Down the Balance

Once the transfer is complete, start paying down the credit card balance. You can calculate how much you need to pay each month in order to have the total balance paid off before the introductory period ends.

For example, if you have $3,000 in credit card debt on your new card and 15 months of no interest charges, then you’ll need to pay $200 each month to pay off the outstanding credit card balance without accruing additional interest.

What Kinds of Debt Can I Balance Transfer?

When we think of balance transfer credit cards, we often envision moving over all our outstanding credit card debt — because that’s the most common use case. But depending on the balance transfer card issuer, you may be able to transfer other kinds of debt onto your new credit card, including:

• Personal loan debt
• Auto loan debt
• Student loan debt

You typically cannot transfer debt from the same credit card company. For example, if you have high-interest debt on a Chase credit card, Chase will not likely let you transfer that debt to one of its balance transfer credit cards.

Pros and Cons of Balance Transfers

Balance transfers can make a significant difference if you’re struggling with massive debt. But balance transfers themselves can do some harm to your financial wellness. Before opening a balance transfer credit card, consider the pros and cons.

Advantages to Balance Transfer Cards

Here are some of the advantages to taking out a balance transfer card.

Zero Interest

The main reason to open a balance transfer credit card is the 0% APR introductory period. If you can pay off your outstanding debt during this period, you won’t have to worry about accruing additional interest. Because 100% of your monthly payment goes to paying down your debt, you’ll pay off the debt faster and save money on interest.