Credit Cards in 2026: Big Card Changes Are Rolling Out — Here’s What to Re-evaluate Now

Summary

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Episode Overview

Podcast: NerdWallet’s Smart Money Podcast
Episode: Credit Cards in 2026: Big Card Changes Are Rolling Out — Here’s What to Re-evaluate Now
Date: January 12, 2026
Hosts: Sean Pyles, CFP®, and Elizabeth Ayoola
Guest: Caitlin Mims, NerdWallet Credit Card Expert

This episode dives deep into how credit cards are changing in 2026, covering updated features, interest rates, annual fees, spending trends, the “best of” credit cards, and actionable advice for maximizing value while aligning money habits with personal values. The discussion also examines broader personal finance resolutions for the new year, focusing on intentional spending, generosity, and practical saving strategies.

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Value-Driven Spending in 2026

Segment: Personal Finance Resolutions (02:14–15:24)

Setting Intentional Money Goals

• Sean and Elizabeth reflect on changes they want to make in their 2026 spending to better align with their values.
  • Spend Less:
    • Sean: Reducing money spent supporting billionaires and large corporations. “I'm going to try to stop using services from companies that are funding and expanding our AI-driven surveillance states.” (03:35)
    • Elizabeth: Cutting down on childcare spending by exploring babysitting co-ops and reducing impulsive online purchases. “I realize that when I'm idly shopping online, I spend more money on things that don’t matter to me.” (07:13)
  • Spend More:
    • Sean: Increasing support for marginalized communities—especially immigrants and trans people—through regular donations and mutual aid. “I also want to be more generous with one-off contributions and GoFundMe.” (09:03)
    • Elizabeth: Prioritizing random acts of kindness and giving gifts without occasion, as well as more frequent donations for people in need.
  • Spend the Same:
    • Elizabeth: Continuing to budget for travel and dining out, emphasizing enjoyment over restriction.
    • Sean: Maintaining or slightly increasing his restaurant spending to foster relationships.

Notable Quote:

• Sean: “It’s all about staying organized, right? That’s the whole purpose, is you want to make sure that you’re saving enough for each distinct goal and not just taking from one account to fuel another and then kind of muddying the waters a bit.” (11:32)

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The State of Credit Cards in 2026

Segment: Credit Card Trends and Expert Interview (18:43–35:21)

Major Changes in 2025–2026

Guest: Caitlin Mims, NerdWallet credit card expert

The Year of “Chaotic” Changes (19:24–20:11)

• Caitlin: “Chaotic. Issuers seem to be refining who they view as their ideal customer. Big changes to almost every class of card, especially travel cards.”
• Airline and general travel cards, like Amex Platinum and Chase Sapphire Reserve, underwent major overhauls.
• New cards launched for fair/bad credit, plus refreshed features on existing ones.

Highs and Lows in the Credit Card Industry (20:12–21:13)

• More perks, higher rewards, increased consumer-friendly benefits.
• Pre-approval checks more widely available—a “high” for transparency.
• Major downside: “Issuers are increasing fees and offering a lot of niche perks that might not be relevant to everyone.” (20:28)
• Example: Perks like Peloton memberships offered, but not useful for all.

Consumer Patterns: Buy Now, Pay Later and Debt (21:19–23:46)

• Trend: Buy Now, Pay Later (BNPL) became standard, integrated into credit cards (e.g., US Bank card auto-installments).
• Elizabeth: “You start buying more things... then you're just paying things for a long period of time and doing what you call Buy now, pay later loan stacking.” (22:02)
• Caitlin: Flexible when used occasionally, but adopting as a regular strategy is risky—monthly fees add up, and overspending is common. “If you feel like you need to use these programs for everyday purchases, I highly recommend looking at your budget.” (22:55–23:27)

Debt and Delinquencies (24:00–25:20)

• Credit card debt rose, especially for low/middle-income earners, but steadied for higher incomes; delinquency rates dropped slightly.
• Possible explanations: Minimum payments more common, or issuers less willing to approve risky borrowers.

Interest Rates & The Federal Reserve (25:20–26:04)

• Credit card APRs are variable and tied to Fed rates, but rate cuts bring minimal real-world relief (only minor reductions in APR).
• Example: A 20% to 19.75% drop saves just a few dollars over years.

Strategies for Tackling Credit Card Debt (26:23–27:28)

• Top tip: 0% balance transfer offers are the best tool for paying off debt.
• Look for retention balance transfer offers on existing cards.
• Can’t transfer a balance within the same issuer; must switch brands.
• Debt consolidation loans as a backup—lower interest than credit cards, but usually not as good as a 0% card.

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Credit Card Fees, Value, and 2026 Outlook

Segment: Fees, Benefits, and Decision-Making (27:28–31:25)

Annual Fees and Value Calculation

• Substantial annual fee increases for premium cards (e.g., Amex Platinum, Chase Sapphire Reserve).
  “Allegedly adding more value, but not everyone can justify $800–$900 a year.” (27:48)
• Some sub-$100 annual fee travel cards (Chase Sapphire Preferred, Capital One Venture) are losing benefits, indicating possible future fee changes.

Caitlin’s Approach:

• Assess both value and effort. Many cards now offer “coupon book” benefits requiring ongoing active use (e.g., monthly or quarterly credits instead of simple annual credits).
• If using the perks takes too much work or doesn’t match your lifestyle, reconsider the fee.
  Example: “If you don’t eat out often... this [Resy] credit isn’t that valuable for you.” (29:46)
• Don’t be afraid to ask for retention offers if you’re considering closing or downgrading.

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The NerdWallet “Best Of” Awards for Credit Cards

Segment: Best Cards of 2026 and Selection Process (31:25–34:31)

How Winners Are Picked

• Comprehensive review: Star ratings based on objective metrics (fees, rewards, perks, rates), plus team discussions for trends and future-proofing.
• Example: Southwest cards changed policies (adding baggage fees, removing open seating), so some new perks remain too “untested” to weigh heavily in awards evaluation.

Top 2026 Picks

• All Purpose Travel: Chase Sapphire Preferred
• All Purpose Cashback: Wells Fargo Active Cash
• Best Balance Transfer: Citi Simplicity

Remarkably, these choices matched last year’s winners, even through major industry changes.

Notable Quote:

• Caitlin: “Pick the card that's right for you, not the one that's trendy or making headlines.” (34:45)

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Final Words of Wisdom

Segment: Takeaways and Closing Advice (34:31–35:21)

• Only choose a credit card that matches your actual spending habits—not what’s popular.
• If carrying a balance, prioritize 0% introductory APR offers over rewards cards.
• Consistent reevaluation is key: “If the benefits don’t add much value, or maximizing the card is becoming too much of a stressor, just consider getting rid of it or downgrading.” (30:36)

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Key Quotes & Timestamps

• Sean on value spending:
  “I’m going to do what I can to keep my money in my community.” (02:57)
• Caitlin’s word for 2025 credit cards:
  “Chaotic.” (19:37)
• Elizabeth on buy now, pay later danger:
  “You start buying more things and then you’re just paying things for a long period... loan stacking.” (22:02)
• Caitlin on best advice:
  “Pick the card that’s right for you, not the one that’s trendy or making headlines.” (34:45)
• Caitlin on minimizing debt:
  “If you can, try to pay more than the minimum payment, even if you can only afford a couple of dollars each month, that will help you get out of debt faster.” (27:11)

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Timestamps for Major Segments

• 02:14 — Start of value-aligned spending conversation
• 15:33 — Transition to credit card discussion
• 18:43 — Credit cards industry deep dive
• 19:37 — "Chaotic" credit card landscape in 2025
• 21:19 — Buy Now, Pay Later on credit cards
• 24:00 — Credit card debt and delinquencies
• 25:20 — APRs, Fed cuts, and rate realities
• 26:23 — Solutions for cardholders with debt
• 27:28 — Annual fee increases and value
• 31:25 — NerdWallet “Best Of” credit card methodology
• 33:09 — Winners: Best credit cards of 2026
• 34:45 — Final consumer wisdom

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Tone & Takeaways

The episode remains upbeat and practical, blending insightful analysis with a friendly, conversational tone. The hosts emphasize both the emotional and tactical sides of personal finance, urging listeners to stay organized and intentional while also leaving space for joy, generosity, and community support.

Actionable Tips

• Audit your spending for value-alignment.
• When considering a new card, focus on actual benefits you’ll use—not just promotional perks.
• Use 0% balance transfers strategically if tackling debt.
• Only keep premium cards if the effort and rewards match your life.
• Always ask for retention offers before canceling a card.

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For the next episode, tune in for a focus on insurance in 2026!

Transcript

[A]

The following is a paid sponsorship, not an endorsement by NerdWallet's editorial team. Today's episode is sponsored by Bilt. It's 2026 and if you are still paying rent without Bilt, it might be time for a change. BILT is the loyalty program for renters that rewards you for what is usually people's biggest monthly rent. With bilt, every rent payment earns you points that can be used towards flights, hotels, Lyft rides, Amazon.com purchases and so much more. And here's something that I'm really excited about. Starting in February, BILT members can earn points on mortgage payments for the first time. Soon, you'll be able to get rewarded wherever you live and unlock exclusive benefits with more than 45,000 restaurants, fitness studios, pharmacies and other neighborhood partners. Personally, as a homeowner, I'm very excited about this news and I can't wait to use all of my points for a nice meal out with my partner. It's simple. With bilt, paying rent feels better because you can get more. And soon. Owning a home can feel better with BILT too. Earn rewards and get something back wherever you live. Join the loyalty program for renters at joinbuilt.com smartmoney that's J-O-I N B I L T.com smartmoney make sure to use our URL so they know we sent you. Why do growing businesses love working in Slack?

[B]

Let's ask Christy at Ari Bikes. Running things in Slack saves me so much time.

[A]

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[B]

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[A]

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[B]

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[A]

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[B]

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[A]

Well, let's not let that happen. Visit slack.com podcast to get 50% off Slack Business plus, the new year is a time for change and affirming what you want from your life and your money. So what are you willing to do differently to ensure your spending really aligns with your values?

[B]

Well, I'm willing to check my credit and debit card statements and and see where it doesn't align. I think that's a good start.

[A]

There you go. Well, I'm going to hope that folks can actually make some big changes to how they spend their money on a broad scale and we'll see if that's possible. Welcome to NerdWallet's Smart Money podcast where you send us your money, questions and we answer them with the help of our genius nerds. I'm Sean Pyles.

[B]

And I'm Elizabeth Ayola. This episode, we're going to go deep into credit cards in 2026, how you can make the most of yours and which credit cards are the best of the year.

[A]

But first, as I cryptically alluded to at the top, we're going to talk about change on Smart Money. We talk a lot about living your values and aligning what you do with your money and what you really care about. So we're going to talk about how we're going to change our spending in the new year to better align it with our values.

[B]

Sean and I are going to choose one thing we're going to spend more money on this year, one thing we'll spend less money on, and then one thing we'll keep spending about the same amount of money on in the new year, so. So that we're putting more on what reflects our real values. All right, Sean, you're up first. What are you going to spend less money on this year?

[A]

I'm going to spend less money, I think on wedding planning in particular, because guess what, my wedding is behind me. But no, seriously, I'm going to spend less money on billionaires. I think they have enough of our money. So I'm going to do what I can to keep my money in my community. And that's going to be a perpetual work in progress. I think a lot of us have tried to do this over the past few years, but just recently I've been making a few changes that are steps in that direction. I recently, recently moved from Spotify to Tidal and I made that change because Tidal supports artists more. It pays a lot more to artists than Spotify does. Also, Spotify has been doing some shady political things that I'm not too keen on. So that was a small, but to me at least symbolically significant step. I'm also going to try to stop using services from companies that are funding and expanding our AI driven surveillance states. So, so you know, all these dystopian things that we're dealing with on a day to day basis, somehow some way our money is going into them. That can be through our investments or our day to day consumer spending. And yes, while we all have to make compromises as consumers, I'm just trying to be better about not funding evil things in companies and people.

[B]

I'm not going to lie, that is pretty inspirational, Sean. And I say that because there is a lot of talk about doing exactly what you're doing, but I don't tend to see the action behind it or how people are doing it. So I'm curious actually how you came to these actionable steps in terms of how you're going to support that value goal with your money.

[A]

Yeah, that's a really good point because I think we talk about living your values, spending your values a lot and it can seem kind of mushy but in fact it's actually super tactical and practical. So I the Spotify, for example, I looked into what they were doing with their money, what the owners of the company were doing with their money and wasn't too happy about it. And so I looked around at alternatives. I considered Apple Music. To me, their interface is just horrible. So I said no thank you and Tidal just best aligned with my value. So it can take a little bit of research. I mean think about it like how you shop around for a financial product but you're shopping around for any sort of service or investment that aligns with your values. I also recently switched to a high yield savings account at a bank that has a more eco friendly commitment than my previous bank. So that's another example of how you can sort of live your values through the products and services that you're using.

[B]

And then just one more thing on that. You said you looked into how they were spending their money. Was there a particular document you looked at? Was it like their earnings report or spending report or what?

[A]

There are plenty of news articles that detail how Spotify and their management have allocated their money. I'm not going to go too deep into that. But just look at the news everyone.

[B]

I like that. I like that.

[A]

So what about you Elizabeth? What are you going to spend less money on this year?

[B]

Well, not quite as radical as you, Sean. Childcare, complete other end of the spectrum. I would like to spend less money on childcare. I spend quite a bit because I'm a single mom. Anytime I want to go on date night, when I want to travel, especially quite a large chunk because I'm paying for childcare over a series of days. So I like to spend less on that.

[A]

Do you know how much you spent in total on childcare in 2025?

[B]

I would, I would not like to know, Sean, but I do get a glimpse. Several hundred, no, thousands, I do get a glimpse, yeah, during tax season I do get some tax breaks which make a tiny, tiny difference in the drop of the ocean, but that doesn't account for my date nights and stuff like that. It's just, you know, when he's off of school and half terms and things like that. But something I have been thinking about that I started doing and completely forgot about, are looking into babysitting co ops and apparently they're not as popular as they used to be, but it's where parents gather together and they essentially take turns babysitting each other's kids for free. So maybe I can create one of the smaller building community.

[A]

Yeah, that's a nice.

[B]

Exactly.

[A]

That's mutual aid in your area. You haven't done it yet, but you're just looking into it.

[B]

I'm looking into it. And now that I'm out of my introverted bubble, I'm like, hey, why not create one? But there's so much, I guess, things you have to think about around it, like safety and getting to know these people.

[A]

Right.

[B]

But I think it would be worthwhile and save me a lot of money.

[A]

I like the idea. So keep us posted on how that actually pans out, because I would worry about who these people are. You want to make sure I.O. is safe.

[B]

That's right. That's right. The second thing, maybe a little bit similar to what you're talking about is online shopping. I realize that I tend to sometimes when I'm just idly shopping online, one, spend more and two, spend more money on things that don't matter to me. And three, it's not great for the environment. You know, buying, I don't know, toothbrush from Amazon when I can just drive or walk up to Walgreens around the corner or whatever store and get it without harming the planet or. And, you know, things like that.

[A]

So, yeah, I mean, you said the word like idly shopping. I think that's super important. Like idly versus intentionally shopping. If you're just shopping as a form of entertainment, of course you're not going to be super satisfied with what you're getting because you're just doing it for a dopamine hit. Basically.

[B]

That's right. So I find myself nowadays going to the store more if I need something versus looking online first. And just the process of having to get in my car and drive to the store makes me think, do I really need this thing before I actually go and buy it?

[A]

If it's a toothbrush, I'm going to say yes.

[B]

That was not a great example because, yes, please brush your teeth, people. We need the toothbrushes.

[A]

Get some floss while you're at it.

[B]

Yeah, and a tongue scraper. And Sean, what are you going to spend more on in 2026?

[A]

Okay. My more Category is kind of the inverse of my less category. I'm going to try to spend more money supporting individuals and organizations that have been marginalized and targeted by oppressive policies over the past 12 months or so. So that might be. So that's going to mean increasing the amount that I donate monthly. I already have regular donations to food banks in my local area, but now I'm going to try to find organizations that help immigrants and trans people because guess what, they are being targeted in ways that are painful to see. And I want to do something, whatever I can to try to help people. I also want to be more generous with one off contributions and GoFundMe. We're seeing a lot of families that need support, maybe if their family was torn apart, an immigration rate or something, and they don't have a support system as much anymore, how can I use the income and the resources that I have to help people who aren't as fortunate? So that's going to be my more category is just being more generous, loving.

[B]

These altruistic ways of using your money. Sean, mutual aid is so important. It's always important, but even more in the times that we're living in. And as you said, GoFundMe, it tugged a heartstring for me because I'm such a fan of GoFundMes. My favorite thing to do now crying with strangers on the Internet is follow these pages where the influencers find people who are in need of mutual aid and they do fundraisers for them and raise thousands or millions of dollars to help them out of a difficult place.

[A]

I think finding a trusted influencer or other resource can be really key here because some folks take advantage of people's generosity and there are plenty of GoFundMes that are straight scams. So don't be indiscriminate. You want to vet people and whoever you're donating to. But yeah, on a more fun note, one area that I want to spend more money on is of course, gardening and gardening supplies. I'm looking at getting some new trees, some conifers for my yard, because, you know, pine trees, conifers are huge in Pacific Northwest and we somehow don't have any in our garden. So I might be getting a few this year and I'm excited to see wherever I put them because the garden is always a work in progress.

[B]

Well, are we gonna get more gardening pictures, Sean, on social media? Can we see more of your garden?

[A]

Yeah, I mean, it's January, so the garden's pretty sleepy right now. But yeah, come spring, more's on the.

[B]

Way for sure as you're talking. One more thing that I would like to spend money on is, I think, since we're on the topic of feel good things, is giving random gifts to people in my life just because gifts. I know it's easy to give birthday gifts and when there's a special occasion, but isn't it such a great feeling when you just receive a gift out of nowhere just because of nothing, because someone just loves you?

[A]

That's so sweet. I love giving really thoughtful, random gifts to people. So, like, whenever I travel, I try to pick up something for a friend if it reminds me of them, and I won't hold on to it until Christmas or their birthday unless it's, like, less than a month away. But I will just send my friends random things and just say, thinking of you, love you, miss you, and then they get to enjoy whatever random trinket I pick up. So I love that. It's very sweet.

[B]

Very sweet. And I'm realizing now that I have all of these financial goals for this year. I'm gonna need lots of buckets for them. I mean, these giving goals and things like that. I'm gonna open more accounts.

[A]

Sean. There you go. You're coming over to my way of doing things. I love it. It's all about staying organized, right? That's the whole purpose, is you want to make sure that you're saving enough for each distinct goal and not just taking from one account to fuel another and then kind of muddying the waters a bit.

[B]

Not being loosey goosey, as you say.

[A]

Yes, loosey goosey, exactly. What else are you gonna spend more money on this year?

[B]

One of the things, I guess I'm gonna double back to what you were talking about earlier is just, I guess in the spirit of random acts of kindness, is giving more to people in need. So you know that I mentioned for my birthday celebration that we put together gift bags for homeless people, and I think it just opened something in me to want to do that more regularly. So I would love to put some of my funds into that and also just do more fundraising for people in need and give them things randomly, not just on the holidays or my birthday.

[A]

We are such good people. Also, let's hold each other accountable because we have all these altruistic things that we want to do. Let's make sure we actually do them. Elizabeth. So let's check in every few weeks because it's easy to say you want to do these things. Actually doing them is a different thing. Not that I doubt us at all. But, you know, it's good to have an accountability partner.

[C]

Yeah.

[A]

Okay. And now let's turn to what we want to spend the same amount of money on, roughly the same amount of money on this year. What's yours, Elizabeth?

[B]

Travel and food. You know, I looked at and I sometimes I'm like, hey girl, you might have eaten out a lot of times this week and do we want to change that? And I'm like, hey girl, absolutely not. So I'm still gonna be eating out. It's still in my budget. I enjoy eating different food. I don't want my food that I cook every single day of my life. And travel's always gonna be a love for me. I just want to do a better job at budgeting for my travel this year because I'll just be like, hey, I want to go on a trip and I'll have surplus in some account. And then, you know, but it's. I think it's nicer to actually save towards a TR trip. I do not do that.

[A]

Well, let me tell you, as someone who saved a lot for my honeymoon and wedding and didn't have to go into any debt for all of that, it felt great knowing that I wasn't going to feel bad at the end of it because I had all that money tucked away ahead of time.

[B]

I did a pretty good job last year. You know, I did lots of thrifting and consignment stores of focusing on quality clothing. I do like to shop, so I don't feel like I have to stop myself from shopping, but it's just doing budget friendly shopping. So I'm going to keep doing that this year.

[A]

Yeah, I love that. Well, I'm kind of following you too, around going out to eat. I'm planning to spend about as much and maybe even a little more on going out to eat at restaurants. I mean, Portland is a food haven. We have so many incredible restaurants here. And I really cherish the time that I spend having a good meal at a great restaurant with the people that I love. And I think it's one of the best investments that I can make in like developing my relationships and having quality time with the people that I love in my life. So I view it as a really important part of my day to day life. So I'm just gonna keep throwing money at all these restaurants and they keep tipping well because I know it's worth it.

[B]

Do you have any restaurants in mind that you would like to tackle this year or it's just randomly coming up with ones or researching or TikTok. Are you TikTok influenced?

[A]

I'm not so big on TikTok in part because my ADHD brain gets too sucked into it. So I'm not on TikTok at all. But there was just a list put out by the Oregonian, the local newspaper, of the best new restaurants in Portland. And one of them is a good ramen spot. So I'm go there and then one of my favorite restaurants in town, Coquin, kind of a fancy place, just opened an oyster bar right next to their restaurant. So I'm going to check that out. Sounds good.

[B]

I love oysters, Sean, I don't know if you love oysters too. Do you love oysters?

[A]

I love oysters, yes.

[B]

Another thing we have in common discovered.

[A]

In 2026, next time we get together IRL, we got to get some oysters.

[B]

We got to get some oysters and we'll film some content and you guys can watch it. Don't ask me how yet, but you'll watch it of us eating oysters together.

[A]

I'm adding it to the list of things that I need to do in 2026.

[B]

Thank you. In a moment, we're going into the next installment of our series, about your money in 2026. This time it's all about credit cards.

[A]

But before we get into that listener, think about your values and how you'll spend your money this year. What are you going to spend more on or less on? We'd love to hear from you, so leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD. Or email us at podcastnerdwallet.com and while.

[B]

You'Re at it, send us your money. Questions do you not know how to set some goals for yourself for the new year? Do you need some help? Do you need some accountability? We can answer whatever questions you have. Just send us an email or call us. All right, let's get to this episode's Money Question segment. That's up next. Stay with us.

[A]

The following is a paid sponsorship, not an endorsement by NerdWallet's editorial team. Today's episode is sponsored by Bilt. It's 2026 and if you are still paying rent without Bilt, it might be time for a change. Bilt is the loyalty program for renters that rewards you for what is usually people's biggest monthly rent. With bilt, every rent payment earns you points that can be used towards flights, hotels, Lyft rides, Amazon.com purchases and so much more. And here's something that I'm really excited about. Starting in February, Bilt members can earn points on mortgage payments for the first time. Soon you'll be able to get rewarded wherever you live and unlock exclusive benefits with more than 45,000 restaurants, fitness studios, pharmacies and other neighborhood partners. Personally, as a homeowner, I'm very excited about this news and I can't wait to use all of my points for a nice meal out with my partner. It's simple. With Bilt, paying rent feels better because you can get more and soon. Owning a home can feel better with Bilt too. Earn rewards and get something back wherever you live. Join the loyalty program for renters at joinbilt.com smartmoney that's J-O-I-N B I L T.com smartmoney make sure to use our URL so they know we sent you. Today's episode is sponsored by Quince Starting the year with a wardrobe refresh, Quint's has you covered with luxe essentials that feel effortless and look polished. They're perfect for layering, mixing and building a wardrobe that lasts. Their versatile styles make it easy to reach for them day after day. Quince has all the staples covered from Mongolian cashmere sweaters that feel like designer pieces without the markup to 100% silk tops and skirts for easy dressing up to perfectly cut denim for everyday wear. Their wardrobe essentials are crafted to last season after season. The quality shows in every detail, the stitching, the fit, the fabrics. Every piece is thoughtfully designed to be your new wardrobe essential. And like everything from Quint's, each piece is built with premium materials in ethical, trusted factories, then priced far below what other luxury brands charge. I recently picked up their cashmere zip up hoodie and I can tell you I'm going to be living in this thing all winter long. It's so cozy and seems really built to last. Refresh your wardrobe with Quint's don't wait. Go to quince.com smartmoney for free shipping on your order and 365 day returns. Now available in Canada too. That's Q-U-I-N-C-E.com smartmoney to get free shipping and 365 day returns. Quints.com smartmoney we are back and continuing.

[B]

Our series about your money in 2026. So far we've covered investing in housing and now we're moving on to credit cards, the plastic money millions of Americans use every day, including myself. We're going to chat about how you can use them efficiently, what direction interest rates are going in, and also how you know the best ones in the market. Now, as we've been doing in this series, we will also explore NerdWallet's best of awards for, of course, credit card products. Now, I can't do this alone, so to help us navigate the world of plastic money, I'm joined by a credit cards nerd, Caitlin Mims. This is your first time on Smart Money, Caitlin?

[C]

It is. I'm happy to be here.

[B]

Welcome, welcome. We're happy to have you. All right, we're going to start with the icebreaker because Elizabeth loves a good icebreaker. Now, Caitlin, if you had to describe credit cards in 2025, what one word would you use?

[C]

Chaotic.

[B]

For sure, that's one of my favorite words. And now I need to tell you why credit cards were chaotic in 2025.

[C]

Yeah, issuers seem to be refining who they view as their ideal customer. So there were big changes to basically every class of card. We cover several cards for fair and bad credit launched last year, and others updated key features. But we saw the most changes with travel credit cards. Just about every suite of airline card made major overhauls and we had huge changes to general travel cards like the Amex Platinum and the Chase Sapphire Reserve.

[B]

Yeah, I have both of those cards and I am sorry to say that I did see those price increases and no, I didn't get rid of my cards. So another expense for me, but I think it's worth it. All right, Caitlin, what were a couple of highs and lows that the credit cards industry experienced in 2025?

[C]

Yeah, we're seeing a lot of issuers add perks, increase rewards, and just provide a lot of consumer friendly benefits. One of the things that I've really loved is that issuers are by and large adding the ability to see if you're approved for the card before you actually apply. But along with this, issuers are increasing fees like we just talked about and offering a lot of niche perks that might not be relevant to everyone.

[B]

I know. I think, I don't know if it's the Chase Sapphire Reserve or the Amex Platinum, but I just remember they were offering like a peloton membership. And I'm like, I'm not going to use a peloton bike and I'm not going to start using it just because I want to use the membership. So I think it's Important for people to think about whether they really are going to use the niche benefits.

[C]

Yeah, definitely. And a lot of those benefits don't even cover the full cost of the actual membership.

[B]

You see, Caitlin is educating us. All right, can you talk about consumer patterns with credit cards in 2025 maybe as it relates to things like spending, debt and consumer behaviors? And also, did anything stand out to you?

[C]

Yeah, we've noticed that a lot more people are using Buy now, pay later options for just general purchases and not even just on specific companies like Affirm and Afterpay, but we're also seeing more installment plans on credit cards. US bank even launched a credit card recently where every purchase is automatically put into an installment plan. These programs can offer some flexibility when you need it, but they can also encourage overspending.

[B]

Yeah, that's my main concern, the overspending element. Because sometimes you tell yourself, hey, if I am able to pay this off in four or in six, then I have more time to pay it. But then you start buying more things and then you're just paying things for a long period of time and doing what you call Buy now, pay later loan stacking.

[C]

Yep.

[B]

Now, something I noticed towards the end of 2025 is that buy now, pay later was becoming standard on many credit cards, as you mentioned. So can you talk a bit about how this works and whether it may be a helpful feature for consumers to lean into in 2026?

[C]

Yeah, every issuer's program is a little different, but generally any program or any purchase over $100 is. And you can choose a payment length of anywhere from 3 to 12 months and it can be really great for one off purchases. I moved cross country last year and used this on my credit card. I was able to purchase some items for my apartment during way day and prime day without having to pay off the balance right away. But just like standalone companies, it's not really a sustainable option to use all the time. The monthly fees will be lower than interest most of the time, but payments will still add up. Like you were talking about Buy now, pay later stacking, and really it's just not going to be a sustainable solution. If you feel like you need to use these programs for everyday purchases, I highly recommend looking at your budget and seeing if you can cut any expenses first.

[B]

I love that. And I love that you mentioned that, you know, sometimes there is a really huge payment and it will be cheaper to use a Buy now, pay later loan rather than put it on a credit card and get charged all that interest. If you can't pay it off in one month. But I think what you said, budget is the key word there. So even when you're using these buy now, pay later loans, you still need to bake those payments into your budget.

[C]

Totally. And, you know, if, if your expenses are significantly higher than your income, sometimes that can't be helped. But again, Buy now, pay later will come back in the end and just be unsustainable.

[B]

Absolutely. All right, so credit card debt has ticked up since the pandemic. Experts predicted this would be the case. So it's no surprise things like cost of living pressures, economic uncertainty, and less than impressive job reports are factors that may have pushed more people to rely on credit cards. What were debt and delinquency rates like in 2025, and how do you think they'll change this year?

[C]

Yeah, I mean, credit card debt has increased, but we're not seeing it increase at the same rate across all income brackets. According to the Fed, debt for low and middle income earners has surpassed pre pandemic levels, but it's actually stayed pretty steady for people who make above $121,000. But interestingly, we've seen credit card delinquency rates drop slightly. This could be because more consumers are paying at least the minimum. Or it could be that issuers are less willing to approve applications for risky borrowers.

[B]

Or people are listening to our podcast and applying our advice. Yes, or reading the wonderful articles that you're writing. Caitlin. The Fed cut rates multiple times last year. And do you think that made a dent in the APR on credit cards? I know some people assume that the Fed cuts will dramatically decrease their apr. Meanwhile, the needle doesn't tend to move much.

[C]

So most credit cards have a variable interest rate that is tied to the Fed's interest rate. So issuers will generally lower rates in tandem with the Fed. But issuers don't always lower APRs immediately, and they don't always lower APRs at the same rate. Even if they do pass on the full amount, though, consumers might not feel much of a reprieve because interest rates are just significantly higher on credit cards than on something like mortgage rates. If your Apr drops from 20% to 19.75%, you're looking at maybe a few dollars saved over the course of several years.

[B]

Caitlin, what do you think will happen this year as it relates to APRs and consumer credit card debt? Could we see people pull back on spending and balances go down?

[C]

I don't want to speculate too much just because there's so many factors at play like job loss, inflation and just general economic uncertainty that a lot of people are feeling right now. But regardless of what happens in the future or what the Fed does, consumers with credit card debt should be proactive and make a plan to pay it off.

[B]

For consumers carrying credit card debt into 2026, what are some options they can explore to minimize that debt?

[C]

My first recommendation would always be to get a credit card with a 0% balance transfer offer. It sometimes seems counterintuitive to get another credit card for credit card debt, but this really is the best way to pay off your debt without accruing interest. You can also look at credit cards you already have. A lot of them will Give existing cardholders 0% interest rate as a retention offer on balance transfers. But it's important to note that you generally can't transfer a balance from one card to another with the same issuer. So if you have debt on a Capital One card, you'll want to look at a card on a different issuer like Citi or Wells Fargo. And if you can try to pay more than the minimum payment, even if you can only afford a couple of dollars each month, that will help you get out of debt faster. Another option is you could look into a debt consolidation loan. You will be charged interest, so it's not my first choice, but it will still likely be lower interest than you're paying on your credit card.

[B]

Let's talk about fees now, Caitlin. We've seen many major credit cards substantially increase their annual fee amount, as you mentioned earlier. I have the Amex Platinum and the Chase Sapphire Reserve as I also mentioned, and both have raised their annual fees to ridiculous amounts. Now, while they're allegedly adding more value in rewards in exchange for these higher fees, some consumers simply can't afford or justify paying 800 to $900 every year for a credit card. Do you think we'll continue to see increases in 2026? I'm crossing my fingers and my toes, and I hope, I'm hoping that's not the case.

[C]

It's really tough to say. We saw a lot of annual fee increases last year, particularly with premium travel cards and airline cards. But issuers only tend to raise annual fees every couple of years, and other card categories have remained relatively stable. One area I'm personally watching is travel cards with an annual fee under $100. So cards like the Chase, Sapphire Preferred and the Capital One Venture, these cards and their competitors have all had very stable annual features fees over the last several years. But both the Sapphire Preferred and the Venture lost some key benefits last year, which tells me that issuers might not think that their current annual fees are sustainable.

[B]

I like what you're saying about tracking cards with stable annual fees, because it really does feel like heartbreak when your fees go up and you realize you have to pay more for the card. All right. How should consumers approach weighing out whether it's worth keeping a card, especially if fees go up again this year?

[C]

For me, there are really two factors to consider. Value and effort. A lot of issuers have been adding what we call coupon book benefits to credit cards in exchange for these higher fees. So instead of general yearly credits on certain spending categories, we're seeing a lot of specific credits that are doled out monthly or quarterly. Some of these credits can be extremely valuable, but it also takes a lot of effort to to use. If these credits take so much effort for you that it's unsustainable, it's probably not adding much value to your life. I also have the Amex Platinum, and when the annual fee increased from $6.95 to $8.95, one credit they added was $100 quarterly credit to any restaurant on Resy. I live in a big city and already eat at restaurants on Resy, so this new credit easily added a net value of $200 for me after factoring in the annual fee. But if you don't eat out often or you won't spend at least $100 per quarter at resi restaurants, this credit isn't that valuable for you because you'll just lose the amount that you're not spending on resi restaurants.

[B]

I love that you bring that up. Towards the end of 2025, me and my boyfriend were on a mission to spend our StubHub credit from the Chase Sapphire Reserve. And we love going to to concerts. So we're like, let's look for a concert to go to so that we could each use that credit and it doesn't go to waste. So that's a really good point.

[C]

Yep. I don't go to concerts that much, so that benefit really doesn't have much value for me, you see? Yeah. So if these benefits already match your spending like Resy does for me and StubHub does for you, and you can afford the higher annual fee, don't be scared to keep the card. But if the benefits of don't add much value for you or maximizing the card is becoming too much of a stressor, just consider getting rid of it or downgrading it to another card, the product or another product the issuer offers. You can also contact customer service, tell them you're considering closing the account, and ask about any retention offers. They might offer you a temporary fee reduction or bonus points. This doesn't always happen, but it is worth asking.

[B]

Well, speaking of which, some people may be looking at getting new credit cards this year and ditching the old ones. Now. Your team did a Best of Credit Cards roundup, which I think will help consumers make an informed decision, which is what we're trying to do here at NerdWallet. Talk us through the work that went into compiling this list and the metrics that you used to choose the winners.

[C]

We take both an objective and subjective approach to picking winners on credit cards throughout the year. My team reviews products and gives them a star rating, which considers things like fees, rewards, rate and perks. Our star ratings are a really helpful guide, but they capture a card's value today, not what it will be tomorrow or a year from now. The credit card landscape changes very rapidly and our winners need to hold up throughout the year. So we use our star rating as a jumping off point for cards we would consider for each category. Then we have several team discussions about consumer spending, credit card trends, and whether any card or its issuer or brand has any concerning changes that point to less value in the future. So one example from this past year is Southwest made sweeping changes in 2025, including adding baggage fees and getting rid of open seating that just went into effect this year.

[B]

Boo.

[C]

Sorry, yeah, I love me some open seating, but so their suite of credit cards changed as a result of those changes and the Southwest Priority now offers seat upgrades when available. That's a great benefit and could be a lot better than the card's previous four upgraded boardings because it's unlimited, but right now it's mostly untested. We don't know how often cardholders will be able to use it or if there will be such high demand for upgraded seats that cardholders rarely get the rarely get the option to use it. So right now it doesn't make sense to consider that perk when we're looking at winners.

[B]

Thanks for explaining that and giving us insight. So what were the top credit cards and did any make the list that you underestimated initially?

[C]

So we have more than a dozen winners which you can find at NerdWallet, but some of the winners I think most listeners would be interested in is the Chase Sapphire Preferred, which won our All Purpose Travel category, the Wells Fargo Active Cash, which won our All Purpose Cash Back category and the City Simplicity, which earned the award for best balance transfer card. But you asked if anything was surprising. I think the thing that's most surprising to me is that even though the credit card landscape changed so drastically in 2025, we picked the exact same cards that we did last year.

[B]

Oh, wow.

[C]

Yeah, it was pretty surprising to me when I looked at the list. Several cards closed the gap, but they just didn't really pull ahead. One example would be in our all purpose travel category. The Chase Sapphire Preferred used to have a 1.25 redemption rate on all travel booked through Chase. That was a huge benefit that Chase got rid of. And at the same time, the City Strata Premier added American Airlines as a transfer partner, which makes it significantly more valuable. It's the only issuer to have American Airlines as a transfer partner. But even though the Chase Sapphire Preferred was no longer a shoe in for the award, it still had enough perks to keep winning, like primary rental car insurance, which is boring, but frankly my favorite perk on the card and multiple great transfer partners like United and iid.

[B]

Okay, well, now that we talked through last year and looked ahead to this year, we want to leave listening listeners with words of wisdom. Caitlyn, there are always lessons that we can learn from the past. And what are some lessons that credit card users can carry forward from 2025?

[C]

Pick the card that's right for you, not the one that's trendy or making headlines. The Chase Sapphire Preferred is such a great card and it's my personal favorite card that I have. But if you don't travel, it's not going to be that valuable for you, and a cashback winner might be better. Also, remember that if you're not paying off your balance in full each month, any reward you earn is going to be canceled out by interest. If you're in a financial situation where you need to carry a balance, a card with a long 0% introductory APR on purchases is going to be a much better option.

[B]

Caitlin, thank you so much for coming on and talking to us about credit cards in 2026.

[C]

Thanks for having me.

[B]

All right, and that's all we have for this episode. Join us next time as we continue our series about your money in 2026. We're going to talk all things insurance during the next episode, but before then, we want you to follow Smart Money on your favorite podcast app. That's Spotify, Apple Podcasts and iHeartRadio. And we want you to automatically download new episodes in the process. And here's our brief disclaimer we are not your financial or investment advisors. This nerdy information is provided for general educational and entertainment purposes, and it might not apply to your specific circumstances. This episode is produced by Tess Figland. Hilary Georgie help with editing. Nick Krismi mixed our audio. And a big thank you to NerdWallet's editors for all of their help. And with that said, until next time, turn to the nerds.

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