The best credit cards for good credit - Business Insider - Business Insider

The best credit cards for good credit - Business Insider - Business Insider


The best credit cards for good credit - Business Insider - Business Insider

Posted: 08 Sep 2020 04:54 PM PDT

This article is brought to you by the Personal Finance Insider team. It has not been reviewed, approved, or otherwise endorsed by any of the issuers listed. Some of the offers you see on the page are from our partners like Citi and American Express, but our coverage is always independent. Terms apply to the offers listed on this page.

This page includes information about the Discover it® Student chrome, which are currently not available on Business Insider and may be out of date.

The best credit cards for good credit:

If you have a credit score in the high 600s or low 700s, your credit rating is considered "good" but not necessarily great. Having good credit typically means you can qualify for a credit card and for various loan products, yet you may not receive the very best rates and terms.

However, it's possible that, with a little work, you could boost your credit score into the very good or excellent range (generally 740+). With a FICO score in that range, you may be able to qualify for the best rewards credit cards on the market today, as well as loans with the most preferable rates and terms.

Many of the best credit cards for good credit offer generous rewards and 0% APR offers with no annual fee. If you have credit in this range and you're looking for a credit card that could help you build more credit until you get your score where it needs to be, here are the best options to consider.

We're focused here on the rewards and perks that come with each card. These cards won't be worth it if you're paying interest or late fees. When using a credit card, it's important to pay your balance in full each month, make payments on time, and only spend what you can afford to pay.

Annual Fee

$0

Regular APR

14.49% to 24.99% variable

Credit Score

Editor's Rating

Featured Reward

20,000 bonus points when you spend $1,000 in purchases in the first 3 months from account opening

Intro APR

0% intro APR on purchases and balance transfers for 12 months from account opening
Chevron iconIt indicates an expandable section or menu, or sometimes previous / next navigation options.
  • Details
  • Pros & Cons
  • 20,000 bonus points when you spend $1,000 in purchases in the first 3 months
  • Earn 3x points o : Eating out and ordering in; Gas stations, rideshares, and transit; Flights, hotels, homestays, and car rentals; Popular streaming services.
  • Earn 1x points on other purchases
  • Intro APR on purchases and balance transfers for 12 months from account opening
  • Points that do not expire while your account remains open
  • No foreign currency conversion fees
Pros
  • No annual fee and no foreign transaction fees
  • Earns 3x points on a wide variety of purchases
  • Comes with a cell phone protection benefit
Cons
  • While rewards are called points, they're effectively cash back
Read Our Review Read Our ReviewA looong arrow, pointing right

The Wells Fargo Propel American Express® card is easily the best option if you have a credit score in the "good" range, since you'll earn a generous sign-up bonus and an exceptional rewards rate in a ton of popular categories. This card also comes with no annual fee, yet it offers valuable benefits like cell phone protection, retail protection against damage or theft, extended warranties, lost luggage reimbursement, 24/7 travel and emergency assistance, and car rental loss and damage insurance.

The points you accrue with this card won't expire as long as your account is open. You can cash in your rewards for myriad options ranging from travel to gift cards to cash back.

Finally, this card comes with a 0% intro APR on purchases and balance transfers for 12 months from account opening, then a 14.49% to 24.99% variable rate. This makes it a good option whether you want to save money on interest for new purchases or consolidate high-interest debt.

What we love: This card offers a generous sign-up bonus plus 3x points in popular categories like dining out, streaming services, and gas. Couple that with the intro APR offer, and it's easy to see how this card could leave you ahead.

What to watch out for: If you transfer high-interest debt from other credit cards, you'll have to pay a balance transfer fee of 3% (minimum $5) for transfers made within 120 days of account opening. After that, the balance transfer fee goes up to 5% (minimum $5).

Annual Fee

$39

Regular APR

26.99% variable APR

Credit Score

Fair

Editor's Rating

  • Details
  • Pros & Cons
  • Unlimited 1.5% Cash Back on every purchase
  • Automatic credit line reviews
  • $0 Fraud Liability if your card is ever lost or stolen
  • Tap to pay
Pros
  • No bonus categories to keep track of; you earn 1.5% back on everything
  • Intro APR offer
Cons
  • Other cards offer higher cash-back rates

The Capital One® QuicksilverOne® Cash Rewards Credit Card is marketed to consumers with fair credit, so it may be easier to qualify for than most other rewards credit cards. This card lets you rack up a flat 1.5% cash back for each dollar you spend, and you can cash in your rewards for a check, a statement credit, or gift cards. You also get a pretty exceptional set of benefits that includes travel accident insurance, extended warranties, auto rental collision damage waiver, and 24-hour travel assistance.

This card also lets you apply to get prequalified online, which can be a major benefit if you want to gauge your ability to qualify before you fill out a full credit card application.

What we love: Earning 1.5% back on all your purchases can help you rack up rewards quickly, and this card comes with a surprising number of benefits for a credit card for fair credit.

What to watch out for: You'll pay a $39 annual fee to carry this card, and you'll never want to carry a balance due to the 26.99% variable interest rate charged on purchases.

Annual Fee

See Terms

Regular APR

See Terms

Credit Score

No Credit History

Editor's Rating

Intro APR

0% intro APR for 6 months from date of account opening
Chevron iconIt indicates an expandable section or menu, or sometimes previous / next navigation options.
  • Details
  • Pros & Cons
  • - Intro Offer: Discover will match all the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
  • - 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.
  • - Good Grades Rewards: $20 statement credit each school year your GPA is 3.0 or higher for up to the next 5 years.
  • - No annual fee. No late fee on first late payment. No APR change for paying late.
  • - Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
  • - Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.
  • - Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
  • - 0% intro APR on purchases for 6 months, then the standard variable purchase APR of 14.49% - 23.49% applies.
Pros
  • Earns 2% cash back at gas stations and restaurants
  • Discover matches cash back after your first account year
  • Get a $20 statement credit every year your GPA is 3.0 or higher
Cons
  • Low cap for earning 2% cash back (up to $1,000 per quarter in combined purchases at gas stations and restaurants)
  • Other cards offer better cash-back rates

The Discover it® Student chrome lets students earn rewards on all their spending with bonus rewards on up to $1,000 in gas and restaurant spending each quarter. Discover will also match all the rewards you earn in your first year, so $100 in rewards becomes $200 after 12 months, $200 in rewards becomes $400 and so on.

Discover also offers a good grades bonus of $20 each year you post a GPA of 3.0 or higher, which is a nice perk if you maintain a good grade point average. There's no annual fee, and you'll qualify for 0% intro APR for 6 months from date of account opening, followed by a variable APR of 12.99% to 21.99%.

What we love: This card makes it easy to build credit while you earn rewards on all your spending. You'll also avoid interest on purchases for the first 6 months, which can be helpful if you need to make a large purchase and pay it off over time.

What to watch out for: After six months, you'll pay a variable APR of 12.99% to 21.99% when you carry a balance. If you wind up with an interest rate on the higher end of that range, carrying long-term debt on this card could be a costly endeavor.

Annual Fee

None

Regular APR

16.49% to 24.49%

Credit Score

N/A

Editor's Rating

Intro APR

0.00% introductory APR for 18 months from date of account opening
Chevron iconIt indicates an expandable section or menu, or sometimes previous / next navigation options.
  • Details
  • Pros & Cons
  • Lowest possible intro APR for 18 months from account opening on purchases and balance transfers
  • Zero liability protection for promptly reported unauthorized transactions
Pros
  • Long intro APR offer
  • Cell phone protection
  • No annual fee
Cons
  • No rewards

While the Wells Fargo Platinum Card isn't ideal for people who want to earn rewards, consumers with high-interest debt to consolidate should pay attention. This card lets you enjoy 0% APR on purchases and balance transfers for a full year and a half, followed by a variable APR of 16.49% to 24.49%. You won't pay an annual fee either, and you'll get a free FICO score on your monthly statement.

This card also comes with a surprising number of cardholder benefits for a card with no annual fee.

What we love: The intro APR offer can be hugely beneficial if you need to pay down a large purchase over time or you want to consolidate high-interest debt.

What to watch out for: Balance transfers require a 3% balance transfer fee (minimum $5) for the first 120 days. After that, the balance transfer fee goes up to 5% (minimum $5)

Annual Fee

$0

Regular APR

26.99%

Credit Score

Fair

Editor's Rating

Intro APR

26.99%
Chevron iconIt indicates an expandable section or menu, or sometimes previous / next navigation options.
  • Details
  • Pros & Cons
  • Unlimited 1% cash back on every purchase for your business
  • Free employee cards
  • Pick your own monthly due date. Your business has the control to pay when you want
  • Get an itemized report of your spending to simplify budgeting and tax time
Pros
  • No annual fee
  • Travel and purchase protection
Cons
  • Some other business cards offer better rewards
  • No welcome bonus

Marketed to business owners with fair credit, the Capital One®️ Spark®️ Classic for Business makes it easy to earn 1% back for each dollar your business spends. There's no welcome bonus, and you only earn 1% back on your business purchases, yet this card could be easier to qualify for when compared to other top business credit cards.

The rewards you earn with this card can be redeemed for statement credits in any amount and they won't expire as long as your account is open.

What we love: Earn rewards and build credit without an annual fee. We also love the fact you get so many perks with this card, including travel and emergency assistance services, auto rental damage waiver, purchase protection against damage or theft and extended warranties.

What to watch out for: You'll pay a 26.99% variable APR for purchases, so this card isn't a good option if you want to carry a balance.

Annual Fee

$95

Regular APR

23.99% (variable rate)

Credit Score

Good

Editor's Rating

  • Details
  • Pros & Cons
  • 5% cash back rewards on the first $5,000 of eligible purchases each year
  • 1% back on all other purchases
  • Free online access to your Experian credit score
  • Protection against unauthorized charges
  • Manage your account quickly and easily on your phone or tablet using the Credit One Bank mobile app
Pros
  • Earn up to 5% cash back
  • Free Experian credit score
Cons
  • Annual fee
  • Bonus cash back is capped at $5,000 in spending per year

If you only have good credit but you want to maximize your rewards haul, consider the Credit One Bank®️ Platinum Rewards Visa. This card lets you earn 5% back on up to $5,000 spent in popular categories like gas, grocery, internet, cable, satellite TV, and mobile phone service purchases each year. You'll also earn 1% back thereafter and 1% back on all other purchases.

If you want to improve your credit, you'll also be happy to know this card grants you a free Experian credit score on your online account management page. Finally, you can prequalify online, which can be beneficial if you want to see if you could qualify before you formally apply.

What we love: Maxing out this card's bonus categories each year would leave you with a minimum of $250 back in rewards. Since you also earn 1% after that and 1% back on all other purchases, this card can help you rack up points quickly.

What to watch out for: The $95 annual fee on this card can be hard to justify if you don't spend a lot or earn a lot in rewards. You'll also pay a high variable interest rate of 23.99% on all purchases, which makes this card a poor option if you need to carry a balance.

  Annual fee Rewards Best for
Wells Fargo Propel American Express® card $0

3x points on eligible streaming services, dining out, gas stations, transit and rideshares, car rentals, hotels and homestays, and flight

1 point per dollar on everything else

Rewards with no annual fee
Capital One® QuicksilverOne® Cash Rewards Credit Card $39 1.5% cash back on all purchases Flat-rate rewards
Discover it® Student chrome $0

2% cash back on up to $1,000 in combined spending on gas stations and dining each quarter (then 1% back)

1% cash back on all other purchases

Students who want to build credit
Wells Fargo Platinum Card $0 None Intro APR offer
Capital One®️ Spark®️ Classic for Business $0 1% cash back on all purchases Business owners
Credit One Bank®️ Platinum Rewards Visa $95

5% cash back on the first $5k spent on gas, groceries, internet, cable, satellite TV, and mobile phone service each year (then 1% back)

1% cash back on everything else

Rewards, if you're willing to pay an annual fee

Gen Z, Millennials and COVID Fuel Rise in Hybrid Credit Card Alternatives - The Financial Brand

Posted: 14 Sep 2020 11:32 AM PDT

Younger consumers, less enthralled with using traditional credit cards and their ensuing debt, are adding drive to the point-of-sale financing trend. More and more variations on the "buy now, pay later" way of buying things keep rolling out.

Fintech lenders are the major drivers, but traditional consumer lenders have ramped up their efforts as the competitive risk of not doing so grows.

Trends that were already in motion have been given a big push by COVID-19, as the pandemic drove more consumers than ever to online and mobile purchasing channels. POS financing is available for both in-store and digital purchases, and is both a payments mechanism as well as a form of financing.

Ways for consumers to use this new form of payment and financing depend on the provider and include direct access at the point of sale, often via a fintech app or a button on a retailer's app or on its checkout screen; the choice to switch a credit card purchase to an installment plan after purchase; and access to a platform that connects consumers, seller and financing providers.

Variations on this product are available for making purchases at some of the nation's biggest retailers — including Amazon, Walmart and Target but have grown increasingly popular for niche retailers

This movement keeps gathering momentum: Afterpay, a plan provider that originated in Australia, saw the number of users enrolled in its offerings rise by over 219% in mid-2020 over the same point in 2019. That results in an increase to 5.6 million U.S. enrollees. Klarna, based in Sweden, one of the world's largest buy now, pay later companies, added over 1 million new users during the summer of 2020. The company reports that daily downloads of its app hit an average of 20,000 daily in the U.S.

A related trend is social media platforms that increasingly make "social shopping" or "social commerce" part of the experience. This means being able to go straight from a post to a purchase, without having to leave the channel.

Afterpay on Instagram

Influencers like actress Sarah Hyland help promote 'buy now, pay later' fintech firms like Afterpay.

Instagram is the clear pioneer in this trend, according to Mintel's Jeannette Ornelas, Senior Digital Analyst. A report by Ornelas indicated that Instagram leads the social platforms in on-platform purchasing, with Pinterest getting similar efforts underway. Leaders among buy now, pay later fintech firms like Klarna, Afterpay and Affirm use the Instagram platform to stimulate interest both in companies that permit consumers to pay this way and in the method itself. Social media influencers are a key tool to promote the service.

Read More:

Why New-Age Installment Plans Appeal to Today's Consumers

Finding ways to be where the consumer is when they want financing may rapidly become a survival skill. A McKinsey report indicates that "75% of consumers who seek financing decide to do so early in the purchasing journey." Beyond share of wallet there is share of mind — the payments brand that puts itself in the vicinity of the purchase will most likely pick up the business.

McKinsey notes that banks have an advantage fintechs typically don't. While the latter have their algorithms, traditional financial players "possess the consumer data necessary to design flexible personal credit lines allocated across credit card, point of sale, and multipurpose installment loans." This is a far cry from the paper-based traditional personal loan offered by credit unions and some banks.

Research by The Ascent, a personal finance service by The Motley Fool, describes in detail how Americans have been using this type of credit thus far. (The study looked at use of fintech providers' offerings.)

"Over a third of U.S. consumers between 18 and 54 have used a buy now, pay later service."

Over a third (37%) of U.S. consumers between 18 and 54 have used a buy now, pay later service, according to the report. The Ascent's research found in a consumer survey that the top two reasons for choosing this option are to avoid paying credit card interest (39%) and to make purchases that fall outside of their normal budget (38%).

The types of plans offered fintechs that put consumers straight into an installment program generally don't charge interest, promoting the plan as the retailer's price divided by the number of payments selected. Of course, even in this low-rate period they aren't doing this for free. Somebody pays, explicitly, in this case, the retailer. Typically they receive the sale price, less a service fee. This isn't that different in principle from the discount taken by card issuers on purchases, although when consumers revolve the interest they pay go to the lender alone. A common selling point made by the companies providing plans that retailers pay for is that consumers who use them tend to buy more than those who buy with traditional methods.

affirm on Instagram

The plans generally fall into three categories, according to blogger Mike Eckler writing for PracticalECommerce. These are fixed plans, which set the number of installments and flexible plans, where the consumer can choose the number of payments within an offered range. In these the seller pays the fee. In the third choice, micro-loans, the consumer pays a flat fee to the plan provider.

The Ascent's research found that use of buy now pay later programs rises until the age of 44. According to the survey, the following percentages have used such a service at least once:

  • 18-24: 37.7%
  • 25-34: 46.8%
  • 35-44: 50.1%
  • 45-54: 42.2%
  • Over 54: 20.6%

Some consumers may be considering these repayment plans to somehow not be "debt" in the same sense as credit card balances because they have a finite term. This makes them seem more palatable. "The option to buy now and pay later can be the difference between 'hopefully one day and 'how about now'," Visa observed in a company blog.

An important point to understand is that usage isn't a frequent event for most respondents. This is in keeping with the trend to use buy now pay later plans for specific large purposes where the methodology permits the impact on the household budget to be contained to a given period and dollar amount. The study found this usage pattern:

  • Once a year or less: 27.7%
  • Every six months: 21.1%
  • Every three months: 21.3%
  • Monthly: 18.3%
  • Weekly: 7.8%
  • More than once a week: 3.8%

People using these plans tapped them to buy the following (they could select multiple categories):

  • Electronics: 43.7%
  • Clothing and fashion: 36.9%
  • Furniture or appliances: 32.8%
  • Household essentials: 31%
  • Groceries: 22.5%
  • Books, movies, music, games: 15%
  • Other: 7.1%

The study also ranked fintech providers by usage:

  • PayPal Credit: 48.1%
  • Afterpay: 35.7%
  • Affirm: 25.7%
  • Klarna: 19.3%
  • FuturePay: 10.7%
  • QuadPay: 10.4%
  • Sezzle: 6.1%
  • Splitit: 4.7%

One bright flashing yellow light: The study found that only a bit over one in five users of these plans say they fully understand how they work. This suggests compliance issues will arise in the future, especially if a worsening economy puts some of these buyers in arrears.

Klarna on Instagram

While the plans generally promote the lack of interest charges, that's only true so long as payments continue on a timely basis. The Ascent's report delved into the terms and conditions pages of the providers. Some findings: Affirm disclosed that its interest rate could rise as high as 30% if payments faltered — the highest rate among the providers. In terms of late fees, Afterpay's is stated as a percentage of the transaction — as high as 25% of the consumer's charge, per purchase.

Read More:

How Traditional Consumer Lenders Compete with Pay Later Plans

Traditional consumer credit companies have been active with their own variations on the buy now, pay later theme.

"American Express reports that since introduction of 'Plan it,' its card members have set up nearly five million installment plans, representing nearly $4 billion in purchases."

Slightly ahead of the curve, American Express introduced its "Pay It, Plan It" option in mid-2017. The "Pay It" component is a way to direct the company to pay a card transaction immediately after making it, through linkage to the consumer's checking account. "Plan It" permits consumers to turn a card transaction into a short-term installment plan, for a fee. The company reports that since introduction, its card members have set up nearly five million installment plans, representing nearly $4 billion in purchases. People using the Amex plan have created four of them, on average. The average plan size is $789.

Other large financial services companies have added plans along the lines of "Pay It, Plan It" to their menus, among them Citi and JPMorgan Chase. And fintech Klarna added the ability to pay immediately from a transaction account.

This wave of options comes at a time when the COVID economy has been pushing down traditional credit card volume, points out Brian Riley of Mercator Advisory Group in a blog, Mastercard and Visa, now have operations supporting pay-over-time options. The companies are working both with traditional card providers as well as with certain fintech players.

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One example of what's been going on is the partnership of Mastercard and TSYS, a global payments company. The partnership will enable consumers of participating issuers to choose to switch card purchases into installment plans. They will be able to make that choice before, during and after checkout.

In the firms' announcement, Riley states: "Adding the installment lending function to a bank card is suitable for all parties in the transaction. The consumer has a discrete transaction, separate from their general purchasing. Merchants get to close the sale, and similar to credit card usage, have an opportunity to upsell the customer. The issuing bank benefits with increased spending."

One aspect of the partnership that's important to understand for the bigger picture is the option to choose the plan at the time of the purchase. TSYS will make it possible to do this without the need to integrate the merchant company into its processes. To the merchant, the pay later purchase looks like an ordinary card transaction.

Many of the fintech players have relied on their service being a visible option on the screen in-store, online and on the merchant's mobile app. However, the fintechs are also moving towards the flexibility of apps that are transparent to the merchant. For example, Affirm introduced a service that creates a one-time virtual card that can be used to make a purchase at any retailer, both live and digitally. Other fintechs have been adding this to their lineups.

While an April 2020 report by Forrester indicates that 26% of retailers surveyed offer installment plan options at checkout, growth in efforts like Affirm's will bring more consumers the ability to buy on plans at virtually any retailer or etailer, not just those explicitly promoting it.

Another angle for traditional institutions to consider is getting aboard platforms that offer consumers multiple options through the retailers' choice of payment partners. One example is Vyze, which Mastercard acquired. The companies taking part in the platform aren't necessarily all pursuing the same segments. QuadPay, a fintech, specializes in four-payment installment plans for purchases under $1,500. Ally Lending, a financing subsidiary of Ally Financial, on the other hand, is joining the Vyze platform to offer plans lasting six to 60 months for up to $40,000, more like a traditional third-party financing arrangement.

The buy now, pay later trend involves more than tangible purchases. JetBlue and Goldman Sachs' Marcus introduced the ability to pay for travel over time through the lender's new MarcusPay service. Trips from $750 to $10,000 can be financed through the effort. This program carries a fixed interest rate.

Read More:

Social Shopping Begins to Take Hold for Millennials and Gen Z

According to Mintel research, Millennials and Generation Z represent a key intersection point for etailers and payments and financing companies. The research has found that of consumers 18-43 who shop online and use social media, 34% would like to purchase items directly through a social media site and that 50% say they would be inclined to use buy now, pay later plans to buy expensive items online. Meanwhile, separate Mintel research indicates that 59% of consumers are trying to limit the time they spend in stores.

Social is also the place where fintechs offering buy now, pay later programs actively promote the goods of companies they've signed up, plus, as mentioned, where they use influencers to stimulate additional interest in their programs or specific goods.

Ornelas reports that Klarna is the biggest spender among the fintech firms offering payment plan, outspending its rivals significantly.

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