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Key takeaways
- Preferred credit cards are designed for individuals with good to excellent credit scores who want to enhance their credit card rewards.
- These cards usually have annual fees, but the benefits and rewards can often offset the cost.
- Preferred credit cards are different from premium credit cards, which usually offer higher annual fees and elite benefits.
- It’s important to compare all options and consider factors such as spending habits and credit score before applying for a preferred credit card.
If you’re wondering what a preferred credit card is, you’re not alone. Many credit card issuers offer cards with names that include the word “preferred” — for example, the Chase Sapphire Preferred® Card and Citi® Diamond Preferred® Card — without necessarily clarifying why cardholders should prefer those cards over other options.
So, what is a preferred card, and how do preferred cards compare to others?
What does “preferred” credit card mean?
Generally speaking, preferred credit cards are designed for people who have built a good to excellent credit score and are ready to take their credit card rewards to the next level. While some preferred credit cards charge annual fees, they’re generally moderate, and savvy cardholders can easily earn enough rewards to offset the cost.
Is “preferred” just a marketing term?
Are preferred credit cards really better than competitors, or is “preferred” just a marketing term?
Bankrate’s take:
In the end, “preferred” is a marketing term connected to cards that offer desirable perks and rewards a cut above average — but not at the level of a premium or elite card.
In other words, there’s no reason to choose a preferred credit card if you don’t actually prefer the card. If you’d be happier with a premium credit card, a no-annual-fee card, a credit-building card or another of today’s best credit cards, don’t let the word “preferred” prevent you from applying for the card you really want.
If you need help deciding which credit card is right for you, Bankrate’s CardMatch™ tool can help. Plus, you might even find yourself preapproved for your next credit card.
How is a preferred credit card different from a premium credit card?
Premium credit cards are designed for people with excellent credit who are ready to pay high annual fees in exchange for elite benefits and perks. Many premium credit cards are also some of the top travel credit cards. In addition to the points and miles offered with every purchase, cardholders may receive complimentary airport lounge access, annual airline credits, travel protections and more.
The Chase Sapphire Preferred card, for example, charges a $95 annual fee. The Chase Sapphire Reserve®, one of the top premium travel cards on the market, charges a $795 annual fee — and offers a lot more in rewards, benefits and perks.
Both cards have unique perks, but if you find yourself choosing between them, be sure to consider your spending habits first. It all depends on what you’re hoping to get out of your travel credit card and how much you’re willing to pay.
Today’s best “preferred” credit cards
If you’re looking for a preferred credit card, we’ve got four top picks for you to consider. Whether you’re hoping for a travel credit card, a balance transfer credit card, an everyday spending credit card or a business credit card, you have options. Here’s how each of these stacks up to the competition.
Best for starter travel
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The Chase Sapphire Preferred® Card card is a perfect for people who want to test out travel rewards before committing to a premium travel card like the Chase Sapphire Reserve.
With a $95 annual fee and numerous opportunities to earn Chase Ultimate Rewards, cardholders can get a lot of value — as long as they’re prepared to use their Chase Sapphire card for a lot of purchases.
The Chase Sapphire Preferred card’s sign-up bonus is currently:
- Earn 75,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening.
This bonus is considered one of the best sign-up bonuses in the industry. It also offers 5X points on travel-related purchases made through Chase Travel℠, plus excellent travel insurance.
Best for no annual fee
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The Citi® Diamond Preferred® Card is one of the few preferred credit cards that does not charge an annual fee. It’s also one of the rare credit cards that does not offer any credit card rewards.
What do cardholders get when they apply for the Citi Diamond Preferred? The opportunity to take advantage of one of the longest 0 percent intro APR balance transfer offers on the market. Cardholders receive 0% for 21 months on Balance Transfers, as long as those balances are transferred within the first four months of account opening, after that a 17.24% – 27.99% (Variable) APR applies, based on your creditworthiness. This top balance transfer credit card could be just what you need to pay off old debt while avoiding new interest charges.
Best for everyday spending
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If your household spends a lot of money on groceries, the Blue Cash Preferred® Card from American Express could be your new favorite credit card.
- Earn 6% cash back at U.S. supermarkets on up to $6,000 per year in eligible purchases (then 1%).
- Earn 6% cash back on select U.S. streaming subscriptions.
- Earn 3% cash back at eligible U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses and more) purchases.
- Earn 1% cash back on other purchases.
Blue Cash Preferred is a good choice for nearly all of your everyday spending needs.
Best for small businesses
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Small-business owners can also take advantage of preferred credit cards. The Ink Business Preferred® Credit Card is designed for business owners who are ready to invest in growth.
With a $95 annual fee — tax-deductible, naturally — and the opportunity to earn top-level Chase Ultimate Rewards on travel, shipping, internet, phone, cable and online advertising, there are a lot of reasons to use the Ink Business Preferred card for many of your small business purchases.
The bottom line
Preferred credit cards may offer more benefits than other types of credit cards, but there’s no set formula behind that term. So, make sure to compare all of your options before applying for a preferred card.
You may be better off with a good no-annual-fee card, for example, or you may want to build your credit score before you apply for a preferred card. You may also want to skip the preferred card and go straight to the premium credit card instead, paying a higher annual fee in exchange for some of the best rewards in the industry.
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