Editor's Note: The CardRatings team of credit card experts picked the best credit cards of 2011 based on their features, perks and overall value to consumers. CardRatings.com was recently ranked the No. 1 credit card comparison site in Bing Editor's Picks.
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Our evolving economy has forced many of us to rethink our relationship with credit. Former road warriors have traded their airline credit cards for other kinds of rewards programs, while job losses have forced some consumers to rebuild their financial lives. Our second batch of Editor's Choice awards celebrates credit cards that add value by saving us money or by helping us build stronger credit scores.
Best rewards credit cards
The best rewards credit cards often beat the best cash-back credit cards, especially when credit card issuers team up with affinity partners who can add even more value to loyalty programs.
- Fidelity Investment Rewards Visa Signature card. Redeeming points for cash through this brokerage-based credit card can net you a rebate between 1.5 and 2 percent. However, Bank of America's private label credit card subsidiary runs this affinity card for Fidelity. Cardholders get access to many of the same WorldPoints travel and merchandise deals as BofA's own rewards cards, but with a higher earning ratio.
- Amazon Visa. Chase's partnership with Amazon.com can save you as much as 3 percent off your online shopping sprees, especially now that America's leading e-commerce company lets cardholders pay with reward points at checkout.
Rewards credit card predictions for 2012: Expect to see more solid deals through the new year, as retailers and service companies leverage bank partnerships for easy financing and loyalty programs. While merchants' demands for lower transaction fees threaten cash-back credit cards, retailers' marketing budgets support generous merchandise and gift card reward programs.
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Best credit cards for poor credit
While many banks were publicly bashed for exploiting the subprime credit markets, a handful of lenders earned our trust by showing compassion during a sluggish economy with some reasonably priced secured credit cards.
- USAA Secured American Express. If you or a family member served in the military, you can get the full benefits of an AmEx card backed up by an interest-earning CD, for a very low annual fee.
- Citi Secured MasterCard. Not only does Citi offer one of the market's least expensive secured credit cards, it sets an 18-month timeframe for participants to earn an unsecured MasterCard or Visa.
- Orchard Bank Visa Classic. HSBC's subprime brand often surprises secured credit card applicants by offering second chances at unsecured credit cards.
Secured credit card predictions for 2012: Competition's heating up again in the subprime lending sector. Banks face lawmaker and shareholder pressure to increase lending, even though consumers' credit ratings haven't yet bounced back from recession-induced lows. Capital One's bid to purchase Orchard Bank and other HSBC brands could open up the category to increased competition, helping more Americans gain access to better account terms.
Most innovative credit card
It's easy to be cynical about the state of student credit cards in the United States, especially when we keep hearing stories about lenders exploiting loopholes in the Credit CARD Act so they can pitch some of their least desirable products to college kids. That's why the Capital One Journey Student Rewards card fills our credit card experts with hope.
Capital One sets a new benchmark for how banks can engage with young consumers: they're straightforward, authentic, and honest. Instead of talking down to students or trying too hard to be hip, Capital One uses clear language on its website and in monthly statements to explain how to build and maintain good credit.
Manage your Capital One Journey Student Rewards card well, and you'll get rewarded with a higher cash-back bonus. Miss a payment, and the account will sting you, but without killing your credit score. A higher-than-average APR should encourage most cardholders to pay their balances in full each month, establishing a lifetime of good financial habits.
Most innovative program
Capital One's Venture Rewards card already shook the airline credit card market by helping consumers disconnect travel rewards from carrier loyalty. With online booking sites making airfares more transparent, it doesn't always make sense to shop for airfare from a single carrier. Venture replaced traditional "miles" with points that work on any airline, any time. If Capital One's reward system didn't keep airline marketing managers awake at night, their innovative Match My Miles stunt certainly did.
Capital One made a bold move to convince longtime airline credit card users to make the switch. Putting a billion "bonus miles" on the line, company pitchman Alec Baldwin offered to match new cardholders' frequent flier mile balances from competing airline cards. Even after capping the sign-up bonus at 100,000 miles and requiring a $1,000 spend, the bank exhausted its budget in about a week. The promotion set the stage for a summer of aggressive - and sometimes crazy - sign-up bonuses from other airline cards. Match My Miles earned high marks for creativity, and for proving that competition that benefits consumers has returned to the credit card business.