Best Everyday Credit Card

Credit cards are a secure and convenient way to pay, but with the huge number of cards to choose from, it can be difficult to know what credit card to open. Each credit card provides different perks. Some are better for travel, some have rotating rewards categories, and others provide a consistent cash back regardless of the item purchased. There are times when a specialized card, such as a travel credit card makes sense, but what is a good credit card for everyday use?

Should I open a credit card?

The first question you have to answer is whether or not you should open a credit card. For the majority of us, the answer will be yes. Being able to make digital payments is a necessity if you pay your rent online, have recurring payments (such as internet or phone), or simply want to shop online. While there are numerous ways to process digital payments, very few offer the security, flexibility, and benefits of using a credit card. You likely already have a debit card linked directly to your bank account, but I always advise utilizing a credit card whenever possible because there is excellent fraud protection and no one will have direct access to your bank account. If you have ever had your credit card stolen or cloned (via a digital copy) and were subject to a charge you did not authorize, check out our “Dispute a Credit Card Charge” article. That article goes into greater detail on the protections you have when utilizing a credit card.

Additionally, a credit card is an excellent way to build credit and increase your credit score. In order to show lenders you are responsible, you have to demonstrate your ability to successfully manage credit. To do this, simply make prudent purchases and pay your card on time. Credit cards generally have extremely high interest rates that typically range from 15% to 28%. However, if you pay off your card’s full balance every month, then you will pay no interest. This is the best way to manage your credit. You do not want to carry a balance and pay an exorbitant interest rate, but using a credit card responsibly provides you with fraud protection, allows you take advantage of rewards points, and helps boost your credit.

What is the best credit card?

As discussed the best credit card will vary depending on your lifestyle and goals, but we will focus on choosing the best “everyday credit card” that you can utilize for purchases everywhere, such as gas, groceries, bills, and shopping. The cards that are most capable of providing great benefits in all purchase categories are cash back cards.

Cash Back

Most of the highest cash back cards are around 1.5%. There are a few exceptions that offer 2% cash back on all purchases, like the Citi Double Cash Card. While certain cash back cards offer higher rates, like 5% return on specific categories, if you want a card for all your purchases, focus on a card with unlimited cash back in any category. However, cash back is not the only criteria you should consider. What other factors should you look at when choosing an everyday credit card?

Annual Fee

Annual fees can quickly consume much of the cash back rewards that you receive from purchases made with a credit card. Therefore, I recommend choosing a card with no annual fee. Many of the American Express cards require an annual fee. Additionally, American Express is not as widely accepted by vendors as MasterCard and Visa. Consequently, for the average consumer, American Express is likely not the best fit. There may be situations where a specific American Express Card provides substantial benefit, but I would not pick them as an everyday card.

International Transaction Fee

If you travel, then international transaction fees will be an important consideration. Any time you make a purchase in a foreign country, it is potentially subject to foreign transaction fees. For example, if you have a credit card from the United States and make a purchase in Mexico that is charged in pesos, then you would pay a fee on that transaction. A typical foreign transaction fee is around 3%, so it amounts to more than the cash back rewards on many cards. To provide the maximum versatility, which is what an everyday credit card should do, it is best to choose a card with no foreign transaction fees. If you do, then you can safely use your card in any country without worrying about the associated fees.

Interest Rates, Annual Percentage Yield (APY)

The credit card’s interest rate or APY is also a consideration. However, since I advocate to avoid carrying a balance on your card, the interest rate does not play a huge factor in our rating of cards. Make every attempt to pay off your balance every month, and pay down your card as soon as you are able. Many cards will offer an introductory APY that is very low or even 0%, but this rate will be temporary before the normal rate resumes. If you take advantage of one of these introductory rates, pay the card off before the offer expires.

Top 3 Credit Card Picks

1. Capital One Quicksilver Card: This card has a lot of attractive features. It provides 1.5% cash back on every purchase, regardless of the purchase category. Additionally, it boasts no annual fee and no foreign transaction fees. As a result, you can utilize this card for all your purchases domestically and abroad. Overall, this is an extremely well rounded card, which is why it took the #1 spot.

2. Citi Double Cash Card: This card provides slightly higher cash back at 2%. You earn 1% when you make the purchase and 1% when you pay the card balance. It has no annual fee; however, it does have a foreign transaction fee. Since you may not travel often, then the foreign transaction fee might not be a high priority, and you may prefer the additional 0.5% that this card earns over the Capital One Quicksilver Card. However, because its flexibility is lower due to the foreign transaction fee, it came in as #2 among our top picks.

3. Chase Freedom Unlimited Card: This card offers 1.5% cash back and higher cash back in several categories: 5% on travel, 3% on dining/restaurants, and 3% at drug stores. Additionally, it does not have an annual fee. However, it does have a 3% foreign transaction fee. Therefore, the 5% back on travel may be appealing if you are traveling domestically, but if you plan to travel internationally, this benefit is less valuable.