Did you apply for a credit card during the height of the COVID-19 pandemic?
Amid economic uncertainty and shutdowns during the early days and again in various periods of the COVID-19 pandemic, credit card applications dropped significantly. In fact, from April to June 2020, only about 8.6 million consumers were approved for a new credit card — numbers that are near record lows.
The good news is that credit card applications and approvals are back on the rise — and financial experts believe that as capacity limits continue to be removed and the country’s complete reopening move forward, there’s going to be greater demand for new lines of consumer credit. The signs are already there. For example, new credit cards rose to 12.3 million from July through September 2020, then again to 15.5 million from October through December 2020. In the first quarter of 2021, credit card originations are up to 15.5 million. That’s down from the nearly 19 million number that marked the first quarter of 2020, but still a sign that loan activity is returning to levels similar to what was observed in pre-COVID times.
With credit card applications back on the rise and lenders more apt to approve consumers with the short and long-term economic picture becoming more clear, now is a great time to apply for a new card. In the next section, we’ll take a closer look at some of the cards that you may want to consider.
What Cards Are You Thinking of Adding to Your Wallet?
Before you apply for a new credit card, it’s important to ask yourself why you’re doing it. For instance, are you looking to build your credit score or credit history? Are you looking to maximize rewards or cashback? Are you looking to maximize the return on investment of travel? Here’s a look at some of the best credit cards out there for each category, per data from CNBC:
- Chase Freedom Unlimited: This card doesn’t have an annual fee and can earn users at least 1.5 percent cash back on all purchases, 5 percent back on travel, and 3 percent back on drugstores and dining.
- American Express Gold Card: If you’re a frequent flyer or now getting back to regular business travel, the American Express Gold Card can really help you take advantage of your situation. Though it carries a $250 annual fee, you earn up to 4 times the points on dining and groceries, 3 times the points on flights and dollar-for-dollar points on all other purchases.
- Petal 2 Visa: If you’re looking to build credit, you can’t go wrong with the Petal 2 Visa. It’s a card that helps holders with money management so they can responsibly spend and build crucial credit.
- CapitalOne Savor: If you’re in business development and often wining and dining clients, then the CapitalOne Savor card is for you. Though it has a $95 annual fee, it earns users up to 4 percent on dining purchases.