Business credit cards are designed for the unique credit requirements of entrepreneurs and small business owners. Like their consumer counterparts, these products leverage business spending to earn significant cash back, airline, or hotel rewards.
The best business cards deliver additional lines of credit, low fees, business-category discounts, and strong rewards programs. This list represents our top rated cards across a number of categories, all driven by our rating methodology, comprehensive card database and proprietary points valuation models. We focus on highlighting the best cards possible and do not give any preference to cards from which we may receive compensation. These are the cards we'd recommend to our family and friends who run businesses, and they're the same ones we're recommending to you.
Best Business Credit Cards for January 2021
- Ink Business Preferred: Best Overall, Best for Travel Rewards
- Marriott Bonvoy Business American Express: Best for Hotels
- United Business Card: Best for Airline, Best for Miles
- Capital One Spark Cash: Best Cash Back
- Wells Fargo Business Platinum Credit Card: Best For No Annual Fee
- Wells Fargo Business Secured Card: Best for Bad Credit
Best Overall, Best for Travel Rewards
Ink Business Preferred℠ Credit Card
Earn 100,000 bonus points after you spend $15,000 on purchases in the first 3 months from account opening.
|Regular APR (%)||15.99% - 20.99% variable|
|Rewards Earning Rate||Earn 3 points per $1 on the first $150,000 spent on travel and select business categories each account anniversary year. Earn 1 point per $1 on all other purchases.|
|Balance Transfer Fee||Either $5 or 5% of the amount of each transfer, whichever is greater.|
|Cash Advance APR (%)||24.99%|
|Cash Advance Fee||Either $15 or 5% of the amount of each transfer, whichever is greater.|
WHY WE CHOSE THIS CARD
The Chase Ink Preferred Card is our pick for best overall business card and best for general travel because it offers a massive one-time bonus worth an estimated $1,250 when redeemed for travel, along with triple points on travel and other eligible business expenses. The annual fee is quite reasonable at $95. Qualifying for the bonus requires substantial spending in the first three months, so this card is best-suited to small businesses that can easily meet that requirement through planned capital or operational expenditures.
PROS & CONS
- Potential to earn a large bonus
- Flexible rewards program
- High rewards on select business expenses
- Low base rewards rate
- Not a lot of business-related benefits
- Chase card service to businesses has been below par
- 100,000 bonus points after you spend $15,000 on purchases in the first 3 months after account opening. That's $1,250 toward travel rewards when you redeem through Chase Ultimate Rewards.
- Earn 3 points per $1 on the first $150,000 spent in combined purchases on travel, shipping purchases, Internet, cable and phone services, and on advertising purchases made with social media sites and search engines each account anniversary year.
- Points are worth 25% more when you redeem for travel through Chase Ultimate Rewards.
- Stay on top of your business with Fraud Protection, Purchase Protection, personalized Account Alerts, and more.
- Employee cards at no additional cost.
Best Business Hotel Card
Marriott Bonvoy Business™American Express® Card
Earn 75,000 Bonus Marriott Bonvoy Points after you use your new Card to make $3,000 in purchases within the first 3 months.
|Regular APR (%)||15.74% - 24.74% variable|
|Rewards Earning Rate||Earn 6X points for every $1 spent at participating Marriott Bonvoy hotels, 4X points at U.S. restaurants, U.S. gas stations, wireless telephone services purchased directly from U.S. service providers and U.S. purchases for shipping, and 2X points everywhere else.|
|Cash Advance APR (%)||25.24%|
|Cash Advance Fee||Either $5 or 3% of the amount of each transfer, whichever is greater.|
WHY WE CHOSE THIS CARD
The Marriott Bonvoy Business American Express card is our choice for the best business hotel card due to its strong bonus rewards on Marriott expenditures as well as those at U.S. restaurants and U.S. gas stations, making it an ideal business travel and entertainment card. It has a $125 annual fee but that should be easily justified with normal business expenditures. We value the 75,000 one-time bonus offered, once initial spending requirements of $3,000 in the first 3 months are met, at $833 when redeemed for stays at Marriott properties.
PROS & CONS
- Outstanding rewards on Marriott stays and select spending
- Complimentary Marriott Bonvoy Silver Elite status
- Bonus night on card anniversary
- Dismal rates on non-Marriott redemptions
- Receive 1 Free Night Award every year after your Card account anniversary.
- Complimentary Marriott Bonvoy Silver Elite Status
- 6X points for each dollar of eligible purchases at participating Marriott Bonvoy hotels.
- 4X points for each dollar of eligible purchases at U.S. restaurants, at U.S. gas stations, on wireless telephone services purchased directly from U.S. service providers & on U.S. purchases for shipping.
- 2X points on all other eligible purchases.
Best Business Airline Card
United℠ Business Card
60,000 bonus miles after you spend $3,000 on purchases within the first 3 months of account opening.
|Regular APR (%)||16.49% - 23.49% variable|
|Rewards Earning Rate||Earn 2 miles per $1 on United purchases, at restaurants, gas stations, eligible local transit, and office supply stores. 1 mile per $1 spent on all other purchases. 5,000 mile loyalty anniversary bonus.|
|Balance Transfer Fee||Either $5 or 5% of the amount of each transfer, whichever is greater.|
|Cash Advance APR (%)||24.99%|
|Cash Advance Fee||Either $15 or 5% of the amount of each transaction, whichever is greater.|
WHY WE CHOSE THIS CARD
The United Business Card tops our rankings of business airline cards due to the superior value of its miles, which we estimate to be $2.28 each, and multiple routes to earn them. With that high valuation, the one-time bonus offer is worth nearly $1,370. Purchases from United, along with other popular spending categories, earn double miles, providing an ongoing opportunity to accumulate mileage wealth. Card benefits include two one-time United Club lounge passes, priority group 1 boarding, primary auto insurance coverage, and a fee waiver on your first checked bag. The $99 annual fee can easily be justified with occasional United flying and normal business charges.
PROS & CONS
- Huge bonus
- Annual miles bonus if you also own a personal United card
- Annual statement credit opportunity and complimentary United Club passes
- Fewer free checked bags than other airlines
- 60,000 bonus miles after you spend $3,000 on purchases within the first 3 months of account opening.
- Earn 2X miles on United Airline purchases, on local transit & commuting and at gas stations, office supply stores and restaurants.
- Free first checked bag – save up to $140 per roundtrip.
- Priority boarding - board United-operated flights prior to general boarding.
- 25% back on United inflight purchases.
- Receive a 5,000-mile better-together anniversary bonus when you have the United Business Card and a personal United credit card.
Best Business Cash Back Credit Card
Capital One Spark Cash for Business
Earn $500 when you spend $4,500 in the first 3 months of account opening.
|Regular APR (%)||20.99% variable|
|Annual Fee||$0 for the first year, then $95|
|Rewards Earning Rate||Earn 2% cash back for your business on every purchase, everywhere.|
|Balance Transfer Fee||There is no standard balance transfer fee for this card.|
|Cash Advance APR (%)||26.99%|
|Cash Advance Fee||Either $10 or 3% of the amount of each cash advance, whichever is greater.|
WHY WE CHOSE THIS CARD
With unlimited 2% cash back on all purchases, the Capital One Spark Cash for Business is our natural choice for best cash back business card. Its excellent and broad rewards offer a compelling alternative to cards that offer high bonus rewards in select spending categories, often with spending caps. The $95 annual fee is waived the first year, which allows you to test-drive the card to gauge whether its cash back earnings justify paying the annual fee in subsequent years.
PROS & CONS
- Decent bonus, albeit for commensurate spending
- Simple rewards program
- Your personal credit history could be affected
- Earn a one-time $500 bonus when you spend $4,500 in the first 3 months from account opening.
- Get unlimited 2% cash rewards.
- Add employee cards for free and earn all the rewards from their purchases.
- Get a custom, itemized spending report to simplify planning, budgeting, and taxes.
- Make purchases outside of the U.S. with zero transaction fees.
Best No Annual Fee Business Card
Wells Fargo Business Platinum Credit Card
Get a one-time $500 cash back bonus or 50,000 bonus points when you enroll in the Business Card Rewards Program and spend $5,000 in the first three months of account opening.
|Regular APR (%)||11.24% - 21.24% variable|
|Rewards Earning Rate||Earn 1.5% cash back on every $1 spent.|
|INTRO PURCHASE APR||0% for 9 Months|
|INTRO BALANCE TRANSFER APR||0% for 9 Months|
|Balance Transfer Fee||See Bank Terms|
|Cash Advance APR (%)||23.99%|
|Cash Advance Fee||See Bank Terms|
WHY WE CHOSE THIS CARD
The Wells Fargo Business Platinum Card is our choice for the best business card with no annual fee due to its generous one-time bonus and the flexibility of its rewards program—allowing an unusual choice between earning cash back or points with business spending. No foreign transaction fees also make it a good choice for business travel and purchasing goods and services outside of the U.S.
PROS & CONS
- Flexible rewards structure
- 0% introductory APR
- Limited benefits
- High spending required to earn bonus
- Get a one-time $500 cash back bonus or 50,000 bonus points when you enroll in the Business Card Rewards Program and spend $5,000 in the first three months of account open date.
- 0% introductory rate for first nine months
- $0 annual card fee, plus up to 99 employee cards with no additional fees.
- Cash management tools.
Best for Bad Credit
Wells Fargo Business Secured Credit Card
|Regular APR (%)||15.15% variable|
|Rewards Earning Rate||Earn 1.5% cash back or earn 1X point and recieve 1,000 bonus points when your company spend is $1,000 or more in any monthly billing period.|
|Balance Transfer Fee||See Terms|
|Cash Advance APR (%)||23.99%|
|Cash Advance Fee||See Terms|
WHY WE CHOSE THIS CARD
The Wells Fargo Business Secured card is our pick for best business card for bad credit because it is uniquely positioned in the market to provide credit card access to small business owners with impaired personal or business credit. It also allows the flexibility to earn cash back or points rewards along with a business-friendly credit line up to 25,000 depending on the security deposit amount.
PROS & CONS
- Flexible rewards structure
- No foreign transaction fee
- Annual fee applies to every card issued
- Minimal benefits
- Choose to earn cash back or reward points.
- $500 to $25,000 credit line.
- $0 liability protection.
- Annual fee: $25 per card.
- Up to 10 employee cards.
- Spending reports available online.
What Are Business Credit Cards?
Business credit cards are designed for the needs of small businesses organized as sole proprietorships, partnerships, or LLCs. They allow business spending to be leveraged to earn valuable rewards in the form of cash back, points, or miles. Other business-friendly features include providing a separate credit line to help fund business operations and tools to easily segregate business expenses from personal ones.
Who Qualifies for Small Business Credit Cards?
Anyone with a registered business (organized as a sole proprietorship, partnership, or LLC), or simply a side gig, can potentially be considered for a small business credit card. Technically, a business is any enterprise that is generating income from the sale of services or products. To demonstrate ownership, it suffices to confirm that you've reported earned income to the IRS under a business ID (EID, if formally organized) or your own personal Social Security Number (SSN).
Under that guideline, everyone from a registered merchant, tradesman, and CEO of a startup LLC to a consultant, freelance artist, Uber driver, dog walker, handyman, and Amazon seller qualifies to apply for a business card. Having an office, store, or other dedicated headquarters is not required, nor must you have any employees other than yourself.
Can Business Cards Be Used for Personal Expenses?
Generally, no. While card terms and conditions vary, they usually stipulate that only legitimate business expenses can be charged to business credit cards.
Can a Personal Credit Card Be Used For A Business?
Yes, in many cases a personal credit card can work just fine for expenses related to a small business. It's best, though, if the card is dedicated to business spending. That avoids intermingling personal expenditures and business ones in a single account, which can complicate accounting and taxes. Indeed, the IRS considers segregation of business expenses to a separate card important to validating that purchases claimed as business expenses are just that, rather than for personal use.
How do Business and Consumer Credit Cards Differ?
While a personal credit card can be used for a business, consumer and business cards have some distinct differences. Here's a rundown:
Small Business Credit Cards:
- Require business-related usage
- Usually have higher credit limits than consumer cards
- Report activity to business credit bureaus rather than to consumer ones
- Bonus rewards rates, if offered, are often for business-related spending categories, such as office furniture and supplies, shipping, and digital advertising
- Sometimes provide 30-day trade terms
Consumer Credit Cards:
- Can be used for either personal or business-related expenses
- Report activity to consumer credit bureaus
- Don’t help build a credit history for your business
- Usually have lower credit limits than business cards
- Focus their best rewards on consumer expenditures, such as spending on groceries or gas
How Do Small Businesses Use Business Credit Cards?
Our research of the small business community suggests that most entrepreneurs and business owners use business credit cards primarily to help manage cash flow. That is, they mostly depend on the card at times when they've incurred charges in order to provide goods and services but are yet to get paid by clients. They also appreciate, and even rely upon, leveraging business spending to earn card rewards.
Also important, since card fraud is a frequent headache for small businesses, is the quality of customer service—and how well issuers resolve complaints, particularly.
Lower in priority, say many businesses, is the card's interest rate, whether during introductory promotions or over the long term. In large part, that's because businesses are less inclined than consumers to carry balances from month to month. Small-business people, we observe, are also less sensitive than regular consumers to cards' annual fees, and less concerned about meeting the spending requirements for a card's one-time bonus.
What Should You Consider Before Applying For A Business Credit Card?
Before diving into the rich array of choices in business credit cards, take stock of some attributes of your enterprise and how well they align with the features and attributes of cards on the market. Here are some key considerations:
Credit Score: Issuers of business credit cards evaluate an enterprise’s creditworthiness just as they do for individuals who apply for consumer cards. If your business is at least a few years old, expect its business income and expenses to be evaluated as part of the issuer's approval process.
That said, a key data point for a new enterprise is likely to be the personal credit record of the principal owner. While standards vary by the card and issuer, approval for a business credit card generally demands good to excellent credit. That translates to a credit score of roughly 700–720 or better.
Rather than simply taking your chances on a card, it’s best before applying to research your current credit score or to go through a card-matching or pre-approval process. That exercise will provide a preliminary take on your likelihood of approval before you risk submitting a full application, which can reduce your credit score, albeit only slightly.
Business-Related Spending Patterns: The better you understand what you'll buy with a business card, and where, the better you can tailor the card you choose to your spending. Some business credit cards provide extra points, miles, or cash back for certain categories of spending, such as phone bills, shipping, or office supplies. Others offer discounts on purchases from specific business-focused retailers, such as Staples.
If your spending ranges too widely to suit a card that emphasizes specific categories or retailers, you can instead choose one that provides a set percentage of cash back or number of points or miles on all spending.
Ancillary Card Features and Benefits: Since businesses present a higher risk to lenders, interest rates on business cards tend to be a bit higher than for regular consumer cards. That said, rates do vary among business cards. If you anticipate carrying a balance, seek out a card with a lower APR or an initial period when purchases can be carried without interest. If you are already carrying business debt on another card, seek out cards with offers that allow balances to be transferred to the new card and carried at 0% APR for a period.
Some premium travel business cards offer luxe benefits such as airport lounge access and concierge services. These cards, though, tend to have steep annual fees. Assess carefully whether the card's extras merit the extra cost you'll likely pay. Unless you're a true road warrior, a card with few or no travel benefits and a small or no annual fee may be a better choice for your business.
What Are The Different Types of Business Credit Cards?
Small-business credit cards are as varied in type as their consumer counterparts. In fact, many consumer credit cards have a business-card sibling, typically with similar features and rewards.
As with personal cards, the choices in business cards run the gamut from no-frills/no-fee options to rewards cards with complex tiered rewards based on travel, airline, issuer, or hotel loyalty programs.
Here's a quick primer to the main card types available to small business owners:
Business airline credit cards: These cards offer rewards—usually in miles—for regular card spending, along with bonus miles for purchases from their co-branded airline. Miles earned with the card are pooled with those earned by flying. The cards may also offer benefits such as early boarding, a free checked bag, or discounts on in-flight purchases.
Ability to earn airline-specific miles on a favored carrier
Bonus miles usually offered for airline purchases and other travel-focused categories, like dining or hotels
Often confers elite status in the airline's frequent-flyer program
Annual fees are often high
Limited options for redeeming or transferring miles
Business hotel credit cards: Similar to their airline counterparts, these cards offer rewards—usually in points—for regular card spending, along with bonus miles for purchases from their co-branded hotel chain. Points earned with the card are pooled with those earned through hotel or resort stays.
Ability to earn bonus points at preferred hotel chain on hotel nights and other spending
Often confers elite status in the hotel's loyalty program
Annual fees can be high
Limited options for redeeming or transferring points
Business general travel credit cards: Branded to card issuers, rather than airlines or hotels, these rewards cards offer points or miles from the issuer that can be redeemed for travel through the issuer's rewards portal. Some provide automatic statement credits for travel-related purchases.
Certain cards offer exceptional benefits, like airline lounge access, priority boarding, and primary rental-car insurance.
Many cards offer bonus miles or points for spending in categories such as airfare, restaurants, and gas.
Some cards offer additional incentives, like bonus points multipliers, for booking travel through the issuer's reservation portal.
Annual fees are common.
No automatic elite status in an airline or hotel loyalty program, unlike with many cards that are co-branded with carriers or chains.
Business cash back credit cards: These offer a fixed percentage of cash back on all purchases, or in certain categories like restaurants, travel, and office supplies. Or often both.
Rewards are in the most usable of currencies—cash
No hassle of redeeming points or miles
Rewards value is clear and transparent
Few or no redemption options except cash
May provide lower rewards value than certain points and miles programs
Business non-rewards credit cards: As with the simplest consumer credit cards, some business cards have few or no rewards, discounts, or benefits. Such cards provide small businesses with basic credit card functionality, generally for no annual fee.
Business secured credit cards: A few national card issuers offer secured business cards aimed at those with no credit history or who are seeking to repair damaged credit. Like their consumer counterparts, these cards require a security deposit that the issuer holds in order to extend a credit line of equal value, and can often be upgraded to a non-secured card after a history of on-time payments.
Business General Travel Credit Cards vs. Business Airline Credit Cards and Hotel Credit Cards
Deciding between a general travel rewards credit card or one allied to a specific airline or hotel-chain is a common dilemma for small businesses. While some small business owners have preferred airlines and hotel chains, others have no particular brand loyalty, and instead seek out the lowest ticket and room prices on every trip.
Choose between general- and co-branded travel cards based on your priorities and past behavior. If you already have a significant number of miles or points accumulated with an issuer, carrier, or hotel chain, you might favor a card that allows you to continue earning those. If you have no such legacy, and no affinities to particular airlines or hotels, you may prefer to pass on partner-specific perks and status in favor of earning the more flexible rewards of a general travel card.
Business Travel Credit Cards vs. Business Cash Back Credit Cards
The key difference between business travel credit cards and business cash back credit cards is the type of “currency” they earn.
Business travel cards earn miles or points that can be used to redeem for free travel through certain card issuer reward platforms or, in the case of co-branded cards, with specific airlines or hotels.
By contrast, business cash back cards earn a percentage rebate on purchases, paid in the form of statement credits, gift cards, or a check directed to the small business owner. (Some supposed cash back cards actually earn “points” that are then converted to statement credits, gift cards, or checks on a penny per point basis.)
The types also differ in their annual fees. As a rule, business travel cards (whether general travel, airline, or hotel) have fees and most business cash back cards do not. One helpful exercise to help decide between a travel card with an annual fee and a no-fee cash back card is to calculate whether your yearly spending will generate enough value to fully offset the travel card's annual fee.
If the rewards are sufficient, and the card's extras contribute additional value for you, the travel card may be the better choice. However, you might favor a no-fee cash-back card if you're uncomfortable with paying for a card. That especially the case if the fee for the card is on the high side and its benefits aren't especially compatible with your travel preferences and style.
How Do You Compare Business Travel Credit Cards?
As with assessing consumer travel cards against one another, it can be complex to compare the rewards and benefits of competing business travel credit cards. Here, to help simplify the task, is a rundown of the main attributes you should size up when deciding between business travel cards:
Annual membership fees: While several business travel credit cards charge no annual fee, those are the exception rather than the rule. When considering a card with a fee, it's helpful, naturally, if the rewards you expect to earn on a card over a year will fully offset the expense. But if it won't, consider how valuable--financially or in terms of comfort and convenience—the card's extras are to you. In other words, an annual fee shouldn’t necessarily be a deterrent to choosing a particular card. It should, however, be a key factor in your choice.
Rewards earning structure: Do the math based on your business spending patterns to see what you would likely earn each year relative to other types of cards in the category. Keep in mind, though, that the best-laid spending plans sometimes fall short, and there's a risk a card won't generate the rewards value you expected in a given year.
One-time bonus: With an airline or hotel card, determine what the bonus is worth, in either dollars or in free award flights or nights. You may also want to keep that value in mind when you consider the card's annual fee, since generous bonuses can help offset that cost, sometimes for years to come.
Foreign transaction fees: Most business travel rewards cards waive foreign transaction fees, which are usually 3% of the transaction value. However, some do not, which should be a major decision factor if your business travel often takes you outside the country.
Global acceptance: While Visa, Mastercard, and Discover are highly accepted at merchants around the world, American Express lags behind in its global footprint. However, the acceptance of all networks varies by country. If you're a frequent traveler to particular destinations, consult the acceptance maps on the networks' websites to confirm you'll be able to easily use the card at the places you visit.
Travel-related insurance: Business travel rewards cards can eliminate the need for employees to pay to insure various aspects of their trips. Important and useful insurance protections that many cards offer on a complimentary basis include coverage for trip cancellation/interruption, lost luggage or flight delays, and travel accidents. Most also offer rental-car insurance coverage, and select premium travel cards even offer coverage that's primary rather than secondary. (That is, it covers the cost of all damage to the car in a collision, rather than only expenses your own vehicle insurance won't reimburse.)
How Do You Choose the Best Business Travel Rewards Credit Card?
Ask yourself the following questions before deciding which travel rewards card best suits your goals and spending:
- Can the spending requirements for the card's one-time bonuses be realistically met with expected business-related purchases?
- Are you loyal to a particular bank card issuer (like Chase, Citi, Capital One, Bank of America, or Wells Fargo) because of an existing financial relationship, such as a savings, checking, or loan account, whether business or personal?
- Are you loyal to a particular airline or hotel, and belong to their loyalty program? Have you a substantial number of points or miles in that account?
- Is it important for you to keep spending in order to reach or maintain elite status in an airline or hotel loyalty program?
- Do you plan or expect to travel to international destinations?
- How important are certain special benefits like airport lounge access or primary rental-car insurance?
- What's the maximum annual fee you're comfortable paying?
What are Business Charge Cards?
Business charge cards are select cards issued by American Express (which also offers business credit cards) that don’t allow balances to be carried from month to month. Instead, each month’s charges be paid in full on or before the statement due date. Business charge cards also lack the preset spending limits of credit cards, not their APRs (since no balances are carried) or late fees (although fees can still ensue if a balance is left unpaid).
How Do You Build Business Credit?
When first starting a business, you must rely on your personal credit history to get a business credit card or any other type of credit for your venture. Over time, though, the business will build its own credit history, and business credit score, with the rating agencies that track business credit. You can help facilitate this process with the following steps:
- Choose an initial form of business entity (sole proprietorship, partnership, or LLC)
- Apply for an employer identification number (EIN) for IRS purposes
- Apply for a Dun & Bradstreet ( D-U-N-S) Number in order to register with the business credit agencies
- Open a business-specific checking/savings account with a bank or credit union
- Apply for, and responsibly use, a small business credit card—including always making on-time payments
- Avoid making personal expenditures with that business credit card
What Are The Types of Business Credit Score?
Two types of business credit scores should be monitored if you plan to apply for business loans in the future: Experian’s Intelliscore Plus score and Dun & Bradstreet’s Paydex score. Both have score ranges of 0–100.
Intelliscore Plus: Scores of 76 or higher are considered good to excellent.
Paydex: Scores of 80 or higher are considered good to excellent.
How Do You Optimize Business Credit Card Rewards?
Whether you get a business credit card, or a separate personal card, for your business expenses, you'll maximize rewards by choosing a card that's well-matched to your anticipated spending. If you are an Uber driver, for example, first consider a card that offers bonus rewards for gasoline and other driving expenses such as tolls. Alternatively, if you're mostly office-bound, find a card that provides discounts or bonus rewards on your leading business expenses—shipping, perhaps, or office supplies.
Another strategy for making the most from cards is to get a number of them, each rewarding different categories of business spending with their richest rewards. That way, you'll optimize your rewards on almost any purchase you make. Some who are adept at this strategy even affix a label to each reward card that lists its premium spending categories.
With all that's involved in starting a business, the rewards you'll earn from credit cards probably won't be your first concern. But they should receive some of your attention. Over time, the value of card rewards and perks can provide a nice bonus for yourself or to reinvest back into your business. Card use also helps build a credit profile for your venture. Assuming that track record is positive, it will help you secure even-better cards along with further forms of credit, such as small business loans.
In order to track and assess the U.S. domestic credit card market, we gather scores of data points on more than 300 cards. This data is collected manually from both card-issuer websites and publicly available sources.
To ensure our information is as up-to-date as possible, we deploy automated tools that monitor changes in such key data as annual percentage rates, introductory rates, introductory periods, bonus offers, rewards earnings rates, fees, and card benefits. We then rapidly make any needed updates to our card listings, reviews, and recommendations to ensure that readers have the most reliable information and advice.
Once we collect credit card data we organize it in our database according to features, which roll up into feature sets (such as rewards, interest, fees, benefits, and Security/Customer Service). Each individual card feature is assigned a star rating score on a 1 to 5 scale using a formula. For instance, for a one-time bonus score we would use a formula like (if bonus is $500 or greater, then assign a score of 5; if $300-$499 then 4, and so forth). Weighting of scores. Once all of each card’s features have received a score we apply a weighting factor to each feature to arrive at a weighted average score for each card (according to the general category in which it resides, such as travel rewards).
This weighting process allows us to assign significantly more emphasis to the attributes important to a particular category, and downplay those that are less relevant to it. That allows us to objectively identify cards that stand out in their category, and why they do. For example, we apply significantly higher weight to such travel-specific features as airport lounge access or primary rental car insurance than we do to attributes such as interest rates or fees that might be more strongly considered for other categories, such as balance-transfer cards.
Another critical factor we consider when rating and ranking travel cards and other types of rewards cards are the cards’ effective earnings rates. We first calculate the average value of points or miles for all the rewards cards in our database, a painstaking process that entails collecting all airline fare data by carrier across scores of popular domestic and international city-pairs along with per-night hotel charges at all major hotel brands.
The required points and miles for air travel or hotel stays from the various reward programs are then used to calculate an effective earnings rate for each card. That allows our readers to make the most informed choices. By putting a card’s large one-time bonus or earnings rates into context across many dimensions and card features, they can more readily weigh the card’s benefits relative to its costs. Uncovering the true but often opaque redemption value of rewards points or miles is, we feel, the only reliable way to make cogent choices among competing value-based cards.
Card Features We Score
As mentioned in our methodology explanation, we place significant weight on certain travel-related features in determining our ratings for each card. Specifically, we place over 50% of our overall assessment score on the combination of the following factors:
- Maximum value of any one-time bonus, whether in points or miles.
- Initial card spending required to earn any bonus.
- Redemption value of the bonus miles or points.
- Global card acceptance, as detailed by the four card networks (Visa, Mastercard, American Express, and Discover).
- Options to redeem points or miles with travel partners, both airline and hotel.
Another consideration is the cards’ coverage, if any, in these travel-related areas:
- Car-rental collision insurance, whether primary or secondary.
- Travel accident insurance.
- Lost or delayed luggage insurance.
- Insurance for trip cancellation, interruption, or delay.
- Cell phone loss or damage.
- Roadside assistance and towing.
- Emergency travel medical/dental benefits.
General, non-travel related features that we consider and score include:
- Interest rates, including both introductory and regular APRs for purchases and balance transfers.
- Fees, including those for annual membership, late payments, cash advances, and foreign transactions.
- Security/customer service features.
- Other non-travel benefits, such as free credit scores, ID theft protection, and contactless payment capability.
How We Reach Our Final Assessments
We rely mostly on the objective scores created by our rating algorithms to determine which card is chosen as the best travel rewards credit card, as well as the ones deemed best for one-time bonuses and as co-branded airline and hotel choices.
However, we may make some adjustments from time to time, to both features and weightings that could affect rankings, which can be influenced by subjective input from our credit card experts. Any potential modifications will be consistent with Investopedia’s belief that consumers are best served by travel cards that:
- Provide superior value in earning awards travel.
- Charge reasonable interest rates in the event that balances are carried month to month.
- Charge fewer and/or more reasonable fees.
- Provide solid customer service, based on the number and quality of customer service features
- Have helpful and protective security features.