New Survey Puts Credit Cards To The Test

If you avoid credit cards that carry an annual fee, you may be missing out on some of the best in the industry, according to a new analysis conducted by the Consumer Reports Money Lab.

The survey, which is featured in the November issue of Consumer Reports, looked at 53 credit cards and identified the best cash rewards, travel and balance transfer/low interest cards. The top cards chosen by the report suggest that consumers shouldn't avoid a card simply because it has an annual fee. Particularly for those who pay off their balances each month, the perks of some rewards credit cards outweigh their costs, the report found.

The report named its best three cards in each category. The results of the Money Lab analysis used the terms offered to those with high credit scores, so consumers may receive different terms based upon their credit history and other factors. In addition, credit card issuers may change program terms at any time.

Best cash-rewards credit cards

For credit cards that offer cash back, the analysis based its findings upon monthly spending that includes $400 on gas, $600 on groceries and $1,000 elsewhere. The following are the top three cards in the category:
  • American Express Blue Cash Preferred
  • Fidelity Rewards American Express
  • Capital One Cash Rewards

The top card in the category, American Express Blue Cash Preferred, comes with a $75 annual fee, but the report also estimated it offers the potential to accumulate cash rewards of $770 over 12 months and $2,010 over three years. The rewards figures take into account upfront bonuses as well as the cost of the annual fee.

Top travel cards

To score travel cards, the report assumed the same monthly spending as with cash rewards cards. For travel cards, top rankings went to the following three cards:

All three of the best travel cards charge an annual fee, although Chase and Capital One currently waive the fees for the first year. A no-annual fee version of each card is also available, but they pay lower rewards.