The BEST CREDIT CARDS of 2021

Credit card companies pumped up their rewards to keep consumers spending during the pandemic. Newsweek’s first card ranking will help you pick your best offer

The pandemic has dramatically reshaped americans’ relationship with credit cards—surprisingly, for the better. Instead of the increased delinquencies, ballooning balances and falling credit scores that might have been expected as the economy struggled and unemployment spiked, the opposite has happened: Balances are down, credit scores are up and credit card issuers are rolling out a red carpet of enhanced

rewards to keep consumers spending. According to the Consumer Financial Protection Bureau, balances dropped an average of 10 percent from March to June of last year, and the trend continued through 2020, proving true even for people who had been struggling financially before the pandemic. New delinquencies on loans and credit card accounts also fell, after being flat or increasing gradually in 2019.

Experts attribute the improvement to a combination of stimulus payments, expanded unemployment insurance benefits and reduced spending on activities like dining out, entertainment and travel, which left many people with extra cash to pay down debt. That in turn pushed credit scores higher: The average score hit

711 in 2020, Experian reports—up eight points from 2019.

“A significant group now find themselves in a much better position than they were a year ago,” says Matt Schulz, chief credit analyst at Lendingtree. “A lot of Americans need credit cards less than they have for quite some time.”

To keep Americans charging and paying annual fees, credit card companies have been tweaking and enhancing their rewards to reflect changing needs. Most now reward spending on takeout and delivery services and added or boosted payouts for buying groceries and subscribing to streaming services. And experts say you can expect those lockdown perks to continue, along with more generous offers on traditional rewards categories such as travel, gas, restaurants and entertainment, as issuers compete for your post-pandemic spending.

“Card issuers all want to look like the best option for when people feel comfortable going out and spending again so we’re going to see potentially bigger sign-up bonuses, longer periods for introductory purchase and balance transfer rates, and lower interest rates and fees,” says Schulz. Another plus: With banks relaxing credit standards again and accepting more credit card applications, you shouldn’t have any trouble accessing these new offers later this year either.

To help you take full advantage of this credit card competition and find the perfect card for your needs, Newsweek partnered with Lendingtree, the online loan marketplace and comparison site for financial services, for our first-ever credit card ranking. From a universe of more than 1,030 credit cards offered by 195 financial institutions, we evaluated 36 different factors about each to find the best-in-class option in 31 different categories. One or more of them may be just right for you. → Kerri Anne Renzulli, Senior Reporter To identify America’s Best Credit Cards, Lendingtree in consultation with Newsweek collected data on candidates from more than 1,030 credit cards issued by 195 financial institutions and credit unions. Lendingtree then applied filters to create a short list of eligible candidates in each category, based on the most salient features for each card type. Lendingtree supplied the data and made recommendations about the feature weightings for each category; the final scoring system used was developed by Newsweek, based on the factors editors deemed most important to consumers for that type of credit card.

Data sources included Magnifymoney.com, Depositaccounts.com and information published by each credit card issuer. All together, 36 factors were assessed, covering a wide variety of fees, current interest rates, balance transfer details, introductory purchase offers, introductory sign-up offers, rewards rates for purchases and other special perks.

For consideration in the best big bank card categories, financial institutions needed to have at least $10 billion in assets; for small bank cards, institutions with less than $10 billion in assets were evaluated. Only credit unions that allow anyone to join were considered. For all business card categories, only cards designated for businesses were considered. For best student offering, cards had to cater specifically to students. For best card for military members, only credit cards offered by banks that cater to military members and their families with at least $10 billion in assets, or by credit unions available to military members and their families, were considered. For best credit card for people with poor credit, cards needed to be either secured or designated as being for low credit score applicants. All other winners were selected from all available personal cards offered by financial institutions of any size.

Newsweek exercised final editorial judgment when selecting the winners. Current interest rate information and introductory offer details are accurate as of May 6, 2021.