MONEY credit cards

As the CARD Act Turns Five, Borrowers Have Many Reasons to Celebrate

The 2009 credit card legislation has saved American consumers billions of dollars, studies show.

On May 22, the 2009 CARD Act celebrated its fifth birthday. But studies done on the consequences of the law suggest that borrowers are the ones receiving the gifts.

The act, which went into effect in 2010, included provisions that both made it easier for consumers to understand their credit card bills and more difficult for issuers to hike rates or fees without telling cardholders.

One of the more influential studies on the consequences of the Act—which reviewed more than 160 million credit card accounts—found that card costs and rates dropped, without limiting access to credit.

“We estimate that the CARD Act fee reductions have saved U.S. consumers $12.6 billion per year,” wrote the study’s authors, who hailed from the National University of Singapore, the Office of the Comptroller of the Currency, University of Chicago Booth School and New York University. Moreover, borrower’s APRs fell, “by an annualized 1.7%, with a decline of more than 5.5% for consumers with FICO scores below 660.”

Related: How to pick which credit card is right for you

Other findings further demonstrate the success of the Act. The Consumer Financial Protection Bureau, which enforces the Act, recently found that, “overlimit fees and repricing actions have been largely eliminated,” and “the dollar amount of late fees is down as well.” In 2012, according to the CFPB, consumers saved $4 billion in late fees alone. (The report did find that the dollar amount of total available credit limits was less than before the recession, due in part to fewer credit cards among college students.)

Demos’s 2012 National Survey on credit card debt of low- and middle-income households found that, “one third of households say they are responding to new information included on credit card statements by paying their balances down faster.” Meanwhile, 28% of households reported paying late fees in 2012, down from 52% in 2008, and nearly three in 10 said credit cards hiked their rates after a late payment in 2012, compared to 53% four years earlier.

Sounds like pretty good reason for consumers to be celebrating this financial milestone.

TIME Saving & Spending

5 Super Simple Tricks to Lower Your Credit Card Bill

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Adam Gault—Getty Images/OJO Images RF

Americans who carry balances on their credit cards are paying more than ever. According to a new report from the website CardHub.com, that the average credit card interest rate rose more than 2% in the first three months of 2014 compared to last year. People with good credit pay more than 17%, on average, while people with fair credit pay a whopping 21% — and that’s for the ones who pay their bills on time. The average penalty rate is even higher, at 28%. Even people with excellent credit pay almost 13%.

That’s a lot of money, but you don’t have to open up yet another card with a teaser balance transfer offer to get out from under those hefty finance charges. Open up a new card and you’ll be under the gun to pay off the entire balance before the teaser rate expires, and you may be tempted to run up more debt on the old card, leaving you worse off than when you started.

Instead, it’s worth calling your credit card company and just asking for a lower rate. To increase your chances of success, experts suggest following these pointers.

1. Give them a rundown of your track record. If you’ve been a customer for a long time, if you always pay on time and if you charge a lot, the company is going to want to keep your business, says Linda Sherry, director of national priorities for the group Consumer Action. If your other cards have lower APRs, let them know that, too.

2. Tell them if your finances have gotten better. “It’s important to know how your credit has changed since you applied for your card,” says Ken Lin, CEO of CreditKarma.com. Since issuers set your initial rate based on how much you earn and what your credit score is at the time you opened the card, an improvement in either of these gives you a good reason to ask for a lower rate. “You’ll have negotiating power going into your conversation with your credit card issuer,” Lin says.

3. Go up the food chain. “If the person you initially deal with isn’t cooperative, ask for a supervisor,” Sherry suggests. and a higher-level representative might have the authority to lower your rate.

4. Play issuers against each other. If you have another credit card you don’t use much, contact the company and ask what kind of APR you could get for a balance transfer, says Gerri Detweiler, director of consumer eduction at Credit.com. “Then, use that information to try to get the other issuer to play ball,” she says.

5. Tell them you’ll stop using the card. “They make money when you use the card, so suggesting that you’ll stop using it in favor of another bank’s card may do the trick,” Sherry says. This is a better tactic than threatening to close the card, since closing it could ding your credit score, especially if you’re carrying a balance.

 

TIME Retail

Target CEO Resigns Amid Fallout From Data Breach

Gregg Steinhafel holds himself "personally accountable" for the massive breach last year that exposed tens of millions of credit cards, but Target's board credited him with steering the retail giant through the crisis and said he'll remain in an advisory role during the transition

Target president and CEO Gregg Steinhafel will step down, the retail giant said Monday, five months a massive data breach over the holidays compromised the credit card information of more than 40 million customers.

Target said that Steinhafel held himself “personally accountable” for the 2013 data breach, but “pledged that Target would emerge a better company.”

“We are grateful to him for his tireless leadership and will always consider him a member of the Target family,” the company’s board of directors said in a statement.

Chief financial officer John Mulligan will serve as interim president and CEO, while Roxanne S. Austin, who currently serves on the board of directors, will be the interim non-executive chair of the board. Steinhafel will stay on in an advisory capacity during the transition.

The shakeup comes just weeks after Target acknowledged that its computers alerted them to the data breach, but that company officials ignored warnings of suspicious activity.

MONEY Kids and Money

4 Ways to Lighten Your Kid’s Debt Load

Converse sneaker ball and chain
The typical 25- to 29-year-old has more than $35,000 in debts. Michael Crichton + Leigh MacMill&

Many young adults are struggling to keep up with student loans, credit-card balances, and car payments. Here's how you can help.

No Mom or Dad wants their adult children to view them as a walking ATM. Still, when they’re struggling financially, what are you going to do?

One thing’s for sure: A lot of them do need help. The typical 25- to 29-year-old owes more than $35,000, according to a recent study from PNC Financial Services—and only about 40% of them say their debts include student loans. No wonder that between credit card balances, car payments, and other bills, 78% of the millennials with debt reported in a new Ameriprise survey that they feel woefully overextended.

If your child is one of them, of course you want to help. These steps will let you do that—without undermining his autonomy or risking your own financial security.

Offer Advice, Not Cash

Resist the impulse to provide a handout, at least initially. After all, you probably need the money for retirement. Plus, you’ll lose a teachable moment. “Bailing your kids out doesn’t help them learn fiscal responsibility,” says financial adviser Deena Katz, an associate professor of personal financial planning at Texas Tech University.

Instead, she suggests, offer to review your child’s expenses and identify ways to free up cash to help with debt payments. Junior isn’t eager to share details about his money with Mom and Dad? Encourage him to use sites such as youneedabudget.com to create a workable plan. Or offer to pay for a year of budgeting help from a professional adviser at a financial planning site such as LearnVest.com ($89 setup, $19.99 a month).

Tackle the Plastic

Twentysomethings often pay lofty credit card rates of 22% or higher owing to their meager credit history and low credit scores (average for millennials: 628). Suggest your child call her issuer and ask for a lower rate, pointing out—if true—her history of on-time payments. “If the provider doesn’t budge, use Bankrate.com or CreditCards.com to shop for a lower-rate card to transfer the balance,” says Beth Kobliner, author of Get a Financial Life: Personal Finance in Your Twenties and Thirties.

Another option, says Gerri Detweiler, director of consumer education for credit.com: Take out a lower-rate loan to pay off the balance. At peer-to-peer lending sites Prosper.com or Lendingclub.com, a millennial might nab a 12.5% rate from investors.

Wrestle Down School Loans

Also help your child explore ways to lower the monthly bill for college debt, such as income-based repayment plans for federal loans. Instead of the standard 10-year payback term, monthly payments under this program are capped at 10% or 15% of the borrower’s discretionary income, depending on when they took out the loans.

The downside is that your kid may rack up more interest over a longer payback period. Any balance remaining will be forgiven after 20 or 25 years of consecutive payments, though taxes will be due on the amount. Have a kid who’s a teacher, works for Uncle Sam, or has another public-service job? He may qualify for loan forgiveness after 10 years with no taxes due. (Get details from the Department of Education here.)

For private student debt, your child may be able to get a lower-rate refi or consolidation loan through another lender or credit union, says Detweiler. Check out student loan comparison shopping sites such as Simpletuition.com and Overturecorp.com for sample offers.

Provide Temporary Refuge

If your child is in too deep for these strategies to work, go bigger. Maybe you suggest your child move home for a bit and direct “rent” toward loan repayment. Or, if you can really afford it, you might pay off her credit card debt—but be clear this is a one-time-only gesture.

Just remember: “Financial help between parents and adult kids is fraught with emotion for both of you,” says Olivia Mellan, a Washington, D.C., therapist who specializes in money issues. Helping your adult children doesn’t give you permission to meddle in their lives, says Mellan, and don’t be surprised if they don’t act grateful. In other words, nothing’s really changed from when they actually were kids.

 

More on Financial Independence

7 Ways to Get Your Kid Out of Your Basement

Is Living with Mom and Dad Starting to Cramp Your Style? Take These Steps to Independence

Taking Five Years to Earn a B.A. is Common—And Costly. Here’s How To Get Out in Four

TIME Security

LaCie Joins Ranks of Hacker-Breached Companies, Says Credit Card Info Possibly Stolen

The France-based storage manufacturer says its website may have been compromised for the better part of a year.

I’ve always thought of LaCie as more of a boutique storage-maker, the sort of outfit you’ll pay a little more to get something in orange, because hard drives always look better in orange.

The company sells storage devices with names like Blade Runner and Quadra and Porsche. I have one of the latter sitting on my desk right now, an aluminum brushed-nickel-finish brick with the company logo — all caps, the “C” bigger still — grandiloquently etched into the side. LaCie even sells a one-terabyte thingamajig audaciously dubbed the Christofle Sphère (Christofle being the French designer’s name, Sphère apparently being the French word for something that looks like it’d be right at home in Miss Cleo’s parlor) that’ll set you back $500. For one terabyte.

Now it seems the company has been hacked, or at least it’s pretty sure that’s the case. It’s put up an “incident notification” explaining that the FBI told it evidence has been found that someone used malware to breach its website and potentially accessed transactions occurring between March 27, 2013 and March 10, 2014. That’s no typo: the company’s basically admitting its site may have been exposed for the better part of a year, and during that year, the ne’er-do-wells may have accessed names, addresses, email addresses, account usernames and passwords, as well as credit card numbers and expiration dates.

It’s ultimately bad news for Seagate, a hard drive maker U.S. buyers are probably more familiar with: Seagate announced plans to snap up LaCie in May 2012, and the acquisition was completed in August 2012.

It’s also bad news for LaCie’s reputation as a purveyor of security wares. The company makes something called “Private-Public,” for instance, a Mac/PC-based encryption tool it markets to customers looking to encrypt files (documents, personal photos, passwords, etc.) on mobile devices. The breach didn’t involve access to the software, as far as anyone knows, but the last thing you want, obviously, is an albatross like this when you’re trying to present yourself as a credible security firm.

If you have a LaCie web account, the company has a “what you can do” to protect yourself FAQ (while it conducts a forensic digital analysis) here.

TIME Companies

Bank of America Inks $772 Million Settlement For Credit Card Practices

A man walks past a Bank of America ATM in Charlotte, N.C., May 8, 2013.
A man walks past a Bank of America ATM in Charlotte, N.C., May 8, 2013. Davis Turner—Bloomberg/Getty Images

Bank of America is paying $772 million in refunds and fines to settle accusations that it illegally deceived 2.9 million customers into purchasing additional credit card services between 2000 and 2012

Bank of America is paying $772 million in refunds and fines to settle accusations by the government that it illegally deceived 2.9 million customers into purchasing additional credit card services, regulators said Wednesday.

The deal, announced by the Consumer Financial Protection Bureau and the U.S. Office of the Comptroller of the Currency, is the largest refund ever ordered by the three-year-old CFPB, as well as the largest settlement over credit-card add-ons won by the federal government, the Associated Press reports.

“Bank of America both deceived consumers and unfairly billed consumers for services not performed,” CFPB director Richard Cordray said. “We will not tolerate such practices and will continue to be vigilant in our pursuit of companies who wrong consumers in this market.”

Bank of America has not admitted to or denied the accusations, but a statement from the bank said it had already ceased offering the products in question and refunded “the majority” of affected customers.

The feds claim that from 2000 to 2011, the Charlotte, N.C.-based bank billed 1.5 million customers a total of $459 million for various identity-protection products without the proper authorization. From 2010 to 2012, the bureau says Bank of America also exaggerated or misstated the benefits of two credit-protection programs that allowed some customers to cancel credit-card debt in instances of unemployment or other hardships, allegedly misleading another 1.4 million customers into paying $268 million.

In addition to those refunds, Bank of America will pay $20 million and $25 million in civil penalties to the CFPB and the office of the Comptroller of the Currency, respectively.

TIME

These Credit Cards Are Desperate to Give You $400

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Adam Gault—Getty Images/OJO Images RF

Thanks healthier economy

If you’re good with your finances, credit card companies are literally throwing money at you to get you to become a customer. Issuers are laying their cards on the table with bonus offers of up to $400, trying to seize the momentum of a rebounding economy.

“You have a slugfest among the big guys over those people who pay their bill in full every month,” says David Robertson, publisher of the credit card industry newsletter The Nilson Report. He also says banks are willing to take a little more risk with customers who may have had years or even decades of sterling credit before the recession. “This was a person who was good as gold a decade ago, and the recession shot them off their horse, so to speak,” he says. For banks, these customers are starting to look attractive again.

“The Great Recession is the driving force behind the emergence and staying power of lucrative credit card initial bonuses,” says Odysseas Papadimitriou, CEO of Evolution Finance, parent company of personal finance sites CardHub.com and WalletHub.com.

So which issuers are dangling the biggest carrots?

“If you aren’t a frequent traveler and you’re just looking for some extra cash to pay off everyday expenses, the Chase Sapphire Preferred card is the way to go,” says John Kiernan, senior analyst at Evolution Finance. “It offers 40,000 bonus points redeemable for a $400 statement credit, in return for new cardholders spending at least $3,000 during the first three months,” he says. Cardholders can boost the value of that pool of points up to $500 — but there’s a catch: The higher value only applies if you use the points for air or hotel redemptions made through Chase’s Ultimate Rewards program. There’s also a fairly steep annual fee of $149, although it’s waived for the first year.

“Another great offer is the Barclaycard Arrival,” says Credit.com credit card expert Jason Steele. This card will be most appealing to frequent travelers or people looking to take a vacation, since its $400 bonus (issued as 40,000 reward miles) has to be redeemed as a statement credit towards travel-related charges. As with the Chase Sapphire Preferred, you also have to spend $3,000 in the first 90 days after opening the account, and after the first year, there’s an $89 annual fee.

But even if you don’t charge a lot from month to month or don’t want to pay an annual fee, you can still find signup bonuses for new cards, says Amber Stubbs, managing editor at CardRatings.com.

“The standard seems to be $100 bonus cash back right now and you can get that with the Chase Freedom, Citi Dividend Platinum Select or the Capital One Quicksilver Cash Rewards card, to name a few,” she says. No, it’s a far cry from $400, but here’s the good part: None of these have an annual fee, and you only have to spend $500 in three months — rather than $3,000 — to get the bonus.

“I like Quicksilver’s ongoing rewards program better because you earn a straight 1.5% cash back on all purchases, so no need to worry about rotating bonus categories or caps,” Stubbs says.

The Discover It card, which also has no annual fee, is being promoted on some third-party credit card sites with a $150 cash back bonus for users who spend $750 in the first three months. “I’m sure Discover is trying to make that card stand out,” says Bill Hardekopf, CEO of LowCards.com. “It does have the leading cash back — not points — bonus at the moment,” he says, although the spending threshold is $250 higher than its competitors.

These “free money” offers might sound great, but the experts say before you rush out to sign up for a new credit cards, there are some things to keep in mind.

If you plan to revolve a balance, you should look for the card with the lowest APR rather than chasing bonuses — the amount you’ll pay in interest charges will outstrip the value of any rewards you earn, since APRs tend to be higher on rewards cards.

And while customers with less-than-perfect credit are being courted by banks again, people with the best credit are still the biggest catch. “Given that such people safely navigated the housing market collapse and resulting struggles, they likely possess solid financial values,” Papadimitriou says. If your credit is blemished, you’ll only damage it further by applying and getting rejected.

“It’s important for consumers to think beyond the introductory offer and find the card that offers the most value for the long run,” Stubbs says.

TIME credit cards

PayPal President Gets His Credit Card Hacked

David Marcus, president of PayPal, had his credit card information stolen while in the United Kingdom.
David Marcus, president of PayPal, had his credit card information stolen while in the United Kingdom. Simon Dawson—Bloomberg/Getty Images

PayPal President David Marcus has been the victim of credit card fraud, he said on Monday. The leader of the online payments company revealed via Twitter that his credit card information had been stolen on a trip to the United Kingdom and he’d racked up a “ton” of fraudulent transactions on his account. Marcus speculated that thieves probably skimmed the info from the magnetic stripe on his card, even though his card had an EMV chip, a technology that makes cards in Europe more secure than the ones commonly used in the U.S.

Marcus leveraged the incident as an opportunity to plug his own company, speculating that the fraud wouldn’t have happened if only the merchant had accepted PayPal. His company is currently trying to expand its presence as a payment option in physical stores, putting it in direct competition with platforms like Square and Google Wallet.

TIME Retail

Target Hackers Accessed Card Data Through a Vendor

A Target Store Ahead Of U.S. Personal Consumption Figures
Victor J. Blue / Bloomberg via Getty Images

The retailer says the thieves stole credentials from a vendor that allowed them to pinch 40 million credit card numbers

Target said Wednesday the hackers that broke into its system and stole millions of customer credit numbers got access to the data by first stealing credentials from a vendor.

A Target spokesperson said the thieves gained access to 40 million credit card numbers and the personal information of 70 million more people by lifting vendor credentials that gave them access to Target systems.

Target says it has taken special precautions since the breach became public on December 15 and that is working with the Secret Service and the Justice Department to resolve the situation.

[AP]

MONEY credit cards

Best Credit Cards

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MDI Digital

Get a better deal from your plastic with these top 15 credit card picks for rewards junkies, balance carriers, frequent travelers, college students, and small business owners. What's the best card for you? MONEY and NerdWallet teamed up to find it.

THE QUANTITY—and quality—of the credit card offers in your mailbox has likely changed in recent months.

That’s owed to the fact that four years after the Great Recession officially ended, banks are finally opening the lending gates again. Until recently, issuers had marketed mainly to low-risk consumers with credit scores of 750-plus. Now card delinquencies are at their lowest level since 1994, TransUnion reports, and Americans are borrowing more than in any year since 2009. So banks are reaching out to a broader swath.

That’s great news for folks who were on the edge of qualifying for the best cards before (FICO scores of around 690 to 749). It’s not so great for those of you who were the target of issuers’ fancy for so long. More qualified borrowers means it’s more of a seller’s market. As a result, the perks you had grown to expect are weakening: Sign-up bonuses are down a bit from their post-recession highs; some issuers have put caps on cash back; and certain rewards are less rewarding (good luck getting 5% on gas anymore, for example).

“What we’re seeing is a reflection of the credit cycle,” says Anisha Sekar, vice president at Nerd-Wallet.com, a site that collects data and offers advice on credit cardsand other financial products.

With all that’s changed, you probably need some help sorting out the credit chaff from the really prime plastic. Et voilà! MONEY teamed up with NerdWallet and combed through its database of more than 1,700 cards to find the best options for five kinds of users: rewards seekers, travelers, borrowers, students, and small-business owners. (For a closer look at the methodology, see page 85.) There’s a card here that’s right for you.

BORROWING

It’s more expensive to carry a balance, with annual percentage rates on new cards averaging 15.31%, up from 14.30% in 2010, according to Bankrate. On the plus side, 0% intro periods have gotten longer, going from eight to 11 months on average over the same time, NerdWallet reports. You can save hundreds—even thousands—by transferring a debt and paying it off within the interest-free window. Or you can take advantage of the 0% trend to pay for a big-ticket purchase over time, at no cost.

1) BEST FOR BALANCE TRANSFERS

Chase Slate (chase.com)

APR: 13% to 23%

INTRO APR: 0% on purchases and balance transfers for 15 months

ANNUAL FEE: $0

BALANCE TRANSFER FEE: $0 if you transfer in the first two months, 3% after that

WHY IT’S A WINNER: Longest 0% period among balance-transfer cards that also have no annual fee and, more important, no balance-transfer fee (a charge that can undercut the benefits of changing cards).

THE CAVEATS: You have to act fast to move the balance or you’ll pay a fee of 3% on the amount you shift over. Also, while Slate offers 0% on new purchases as well, you can get a longer term with the Simplicity (below).

2) LOWEST ANNUAL PERCENTAGE RATE

Lake Michigan Credit Union Prime Platinum Visa (lmcu.org)

APR: 6.25% and up

ANNUAL FEE: $0

WHY IT’S A WINNER: Ideal for those who regularly carry a balance, since it offers the lowest possible APR among no-fee cards (6.25% for applicants with FICO scores of 760-plus).

THE CAVEATS: You have to be a member of the credit union, but you can join with a $5 donation. Not for those who pay in full, since this is a no-frills card.

3) BEST 0% DEAL ON NEW PURCHASES

Citi Simplicity (citi.com)

INTRO APR: 0% on purchases and balance transfers for 18 months

REGULAR APR: 13% to 22%

ANNUAL FEE: $0

WHY IT’S A WINNER: Longest 0% introductory period on new purchases among cards that have no annual fee—so it can be a great way to finance, say, your new kitchen appliances. Plus, it has no late fees and no penalty rates, ever.

THE CAVEAT: Not a great deal for balance transfers. Though it offers 0% for 18 months, you’ll foot a 3% fee.

REWARDS

When it comes to rewards, cash back is king, since it’s more transparent and easier to use than points. The average earn rate on cash cards has edged up from 0.83% in 2010 to 1.09% today, NerdWallet reports. But don’t get too excited: Your ability to earn is often less now, as “some attractive cards have put new limits on the amount you can get back in certain categories, like groceries,” says Alex Matjanec of MyBankTracker.com. Sign-up bonuses have been pared back a bit too, from an average of $82 in 2011 to $79 now.

1) BEST TIERED REWARDS (TIE)

American Express Blue Cash Preferred (americanexpress.com)

APR: 13% to 22%

ANNUAL FEE: $75

SIGN-UP BONUS: $150 after spending $1,000 in first three months

REWARDS:

  • 6% on groceries on up to $6,000 in purchases and 1% thereafter
  • 3% on U.S. gas stations and certain department stores
  • 1% on everything else

WHY IT’S A WINNER: Impressive rates (6% is almost unheard of) on key categories. If you charge $2,000 a month—including the $364 on groceries, $275 on gas, and $166 on department stores the Bureau of Labor Statistics finds typical for households earning $74,000 to $161,000—you’ll reap $489 a year, net the fee (excluding bonus).

THE CAVEAT: The 1% base rate is meager, so you may want to use this card in tandem with the one below.

U.S. Bank Cash Plus (usbank.com)

APR: 14% to 24%

ANNUAL FEE: %0

SIGN-UP BONUS: $50 to $100

REWARDS:

  • 5% on two categories from a list of 12 (e.g., restaurants, department stores, cell service, hotels) on up to $2,000 a quarter
  • 2% on your choice of gas, groceries, or drugstores
  • 1% on everything else
  • $25 bonus when you redeem $100 or more, once a year

WHY IT’S A WINNER: 5% is pretty sweet, particularly since you get to choose where it’s applied and there’s no annual fee on the card. If you dish out $2,000 a month and $450 of it is on restaurants and your cell plan, you’ll earn $557 a year with the redemption bonus (but not the signing bonus).

THE CAVEATS: Must elect categories quarterly—they are subject to change—or you get only 1% on everything. Can apply for card only at U.S. Bank branches.

2) BEST FLAT-RATE REWARDS (TIE)

Fidelity American Express (fidelity.com)

APR: 14%

ANNUAL FEE: $0

SIGN-UP BONUS: None

REWARDS: 2% on every purchase

WHY IT’S WINNER: Rewards are almost double the average earn rate with no limit on cash back, making this the best deal among no-fee, category-free cashcards. You’ll take back $480 a year if you spend $2,000 a month.

THE CAVEAT: Cash has to go into a Fidelity account (IRA, 529, brokerage, or cash management)—though funds can be withdrawn from the latter two.

Capital One Quicksilver (capitalone.com)

APR: 13% to 21%

ANNUAL FEE: $0

SIGN-UP BONUS: $100 after spending $500 within the first three months

REWARDS: 1.5% on every purchase

WHY IT’S A WINNER: Earn rate handily beats the average cash card, and there’s no cap. Rewards are redeemable as a statement credit, check, or gift card. Charge $2,000 a month and you’ll score $360 a year, not including signing bonus.

THE CAVEAT: Pays less than the Fidelity card, but offers easier access to the cash.

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MDI Digital

COLLEGE STUDENTS

The best plastic for your college kid probably isn’t marketed as a student card; such options have all but disappeared since 2009’s CARD Act went into effect. Among collegiate cardholders, 66% carry balances, Sallie Mae/Ipsos found. So a low APR should be a high priority.

Students must be 21 or have real income to get their own cards. Before 21, you can co-sign. A secured card—you deposit cash up to the limit as collateral—caps the damage your kid can do to your credit. But beware: With a low limit, “it’s easy to max out, which isn’t great for his credit score,” says Gerri Detweiler of Credit.com.

1) BEST SECURED

Digital Credit Union Visa Platinum Secured (dcu.org)

APR: 11.5%

ANNUAL FEE: $0

WHY IT’S A WINNER: No annual fee is rare on secured cards, and rates as low as 11.5% can soften the blow if Junior misses a payment. Digital Credit Union reports account status to the credit bureaus, so your child builds a credit history. You can set the credit limit, from $500 to as high as you wish.

THE CAVEAT: Must be a member of DCU to apply, though you can join with a $10 donation to Reach Out for Schools. Set the limit above what you think your child will need to use so as not to harm his nascent credit score.

2) BEST UNSECURED

Northwest Federal Credit Union FirstCard Visa Platinum (nwfcu.org)

APR: 10% fixed

ANNUAL FEE: $0

WHY IT’S A WINNER: Features a very low APR for a no-fee unsecured card available to those without credit history. Account status is reported to credit bureaus. Another plus: Applicants must complete an online course about credit.

THE CAVEATS: Must be a member of the credit union, but a $10 donation to Financial Awareness Network gets you in. Also, maximum credit limit is only $1,000, so caution Junior to spend cautiously.

SMALL BUSINESS

Entrepreneurs using a credit card to finance a startup or capital improvements should look at rates first. Biz card APRs average 13.6%, a hair lower than on personalcards. Almost half of cards also offer a 0% intro period, for an average of eight months. Nearly nine in 10 offer rewards, and a card that pays you back in the categories where you spend can make sense if your business pays in full every month, says NerdWallet’s Sekar.

1) BEST FOR CASH BACK

Chase Ink Cash (chase.com)

APR: 13%

ANNUAL FEE: $0

SIGN-UP BONUS: $200 cash after spending $3,000 in first three months

REWARDS:

  • 5% on office-supply stores, phone service, Internet, and cable on up to $25,000
  • 2% on gas and restaurants on up to $25,000
  • 1% on everything else, no cap

WHY IT’S A WINNER: Offers top-drawer cash-back rates on categories in which businesses typically spend a lot, and the Ink Cash has no annual fee. Assuming that your business spends $75,000 ($25,000 in each reward tier), you’d make back $2,000 a year, not including the sign-up bonus.

THE CAVEAT: Has a 3% fee for foreign transactions, so this is not the card to take to that conference overseas.

2) BEST FOR BORROWING

Wells Fargo Business Platinum (wellsfargo.com)

APR: 9% to 18%

ANNUAL FEE: $0 (or $50, waived the first year, if you join rewards program)

SIGN-UP BONUS: Double rewards for first six months

REWARDS: 1 point per dollar or 1% cash back, your choice

WHY IT’S A WINNER: Lowest APR for business borrowers among no-annual-fee cards.

THE CAVEAT: Rewards are subpar, especially considering the fee. Plus, cash is distributed quarterly, as opposed to on demand.

TRAVEL

The average earn rate on travel rewards cards has reached a cruising altitude of 1%, NerdWallet reports, but redeeming miles can be challenging. Unless you fly one airline a lot, go for one of the newer breed of cards that are airline agnostic. “The generic travel rewards cards don’t have blackout dates or restrictions,” says Ben Woolsey of Creditcards.com.

Go abroad a lot? More cards have no foreign transaction fee (27% vs. 4% in 2010). Only your plastic may not always work: Many countries are moving to a “chip-and-pin” technology available on few U.S. cards.

1) BEST FOR TRAVEL REWARDS

Barclaycard Arrival World MasterCard (barclaycardus.com)

APR: 15% to 19%

ANNUAL FEE: $89 (waived first year)

SIGN-UP BONUS: 40,000 bonus miles if you spend $1,000 in first 90 days (buys a $400 flight)

REWARDS:

  • Two miles per $1 spent
  • 10% miles back when you use them for travel

WHY IT’S A WINNER: Card not only comes with one of the largest sign-up bonuses but also has an impressive ongoing rewards rate of 2% with no caps. Miles can be applied as a statement credit when you spend on any kind of travel, be it flights, cruises, car rentals, or hotels. So you have a lot more leeway than an airline card. Plus, Arrival World MasterCard does not have a foreign transaction fee.

THE CAVEAT: Doesn’t have chip-and-pin technology, so it might not always work overseas. A salesperson can manually put through a magnetic strip card like this one, but you could have trouble at unmanned kiosks.

2) BEST FOR USING OVERSEAS

Andrews Federal Credit Union GlobeTrek Rewards (andrewsfcu.org)

APR: 8% to 18%

ANNUAL FEE: $0

SIGN-UP BONUS: 5,000 points with your first purchase

REWARDS: One point per $1 spent

WHY IT’S A WINNER: One of a handful of cards in the U.S. that come equipped with chip-and-pin technology while also having no foreign transaction fee and no annual fee. You can join the Andrews Federal Credit Union by first joining (for free) the American Consumer Council.

THE CAVEAT: Value of rewards on the Globe Trek is average—and they cannot be redeemed for cash, only for travel and merchandise; this card is really only for use while traveling overseas.

METHODOLOGY

MONEY decided upon the criteria to consider—which included intro and regular APRs, sign-up bonuses, annual fees, rewards, and other fees—then set parameters for what would make the best cards in each category (for example, lowest rates and no annual fee for someone who carries a balance). NerdWallet plugged the terms into its database and made several suggestions for each category, nothing the issuers from which it receives compensation when people apply through the site. MONEY made the final decisions and independently fact-checked the picks.

NOTE: APRs are rounded to the nearest percentage point and are variable except where noted. Rates are based on creditworthiness (largely FICO score) when a range is listed. Many of the winners require excellent (750+) credit.

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