Credit Cards

10 different types of credit cards: and how to choose yours

From cash back to travel rewards, see the main different types of credit cards you can use to your benefit!

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by Sabrina Paes

Published on 05/08/2023

Find the perfect credit card choice for your needs!

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See the main different types of credit cards! Source: Adobe Stock

With so many different types of credit cards available in the market, it can be difficult to choose which one is right for you. Each type of credit card offers its own unique set of benefits and rewards.

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So, it’s important to consider your spending habits and financial goals when selecting a card. In this article, we will discuss 10 different types of credit cards and how to choose the right one for you.

1. Cash Back Credit Cards

Cash-back credit cards are one of the most popular types of credit cards in the US. These cards offer a percentage of cash back on every purchase made with the card.

Some cash-back credit cards also offer higher cashback rates for certain categories, such as groceries, gas, or dining out.

2. Travel Rewards Credit Cards

Travel rewards credit cards are great for those who love to travel. When choosing a travel rewards credit card, consider the rewards rate offered for different categories, such as flights, hotels, or car rentals.

Also, look for cards that offer flexible redemption options, such as the ability to transfer points to airline or hotel loyalty programs.

Some travel rewards credit cards also offer travel insurance or other travel-related perks, which can come in handy during your travels.

3. Balance Transfer Credit Cards

If you have high-interest credit card debt, a balance transfer credit card can help you save money on interest charges and pay off your debt faster.

When choosing a balance transfer credit card, consider the balance transfer fee and the length of the introductory 0% APR period.

Look for cards with a low balance transfer fee and a long introductory period, as this will give you more time to pay off your debt without accruing interest charges.

4. Low-Interest Credit Cards

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Save money with low-interest credit cards! Source: Adobe Stock

Low interest credit cards can help you save money on interest charges if you carry a balance on your credit card.

When choosing a low-interest credit card, consider the interest rate and any fees associated with the card, such as an annual fee or a balance transfer fee. Look for cards with a low-interest rate and minimal fees.

5. Rewards Credit Cards

Rewards credit cards offer rewards points or miles for every purchase made with the card.

When choosing a rewards credit card, consider the rewards rate offered for different categories, such as groceries, gas, or dining out.

Also, consider the redemption options available for the rewards, such as merchandise, gift cards, or travel.

Look for cards with flexible redemption options and rewards that align with your spending habits.

6. Business Credit Cards

If you’re a small business owner, a business credit card can help you keep your business expenses separate from your personal expenses.

When choosing a business credit card, consider the rewards and perks tailored specifically to small business owners, such as cash back on office supplies or advertising.

Also, consider the credit limit and any fees associated with the card, such as an annual fee or a foreign transaction fee.

7. Secured Credit Cards

Secured credit cards require a security deposit in order to be approved.

When choosing a secured credit card, consider the security deposit required and the credit limit offered.

Look for secured credit cards that report to all three credit bureaus, as this will help you build or improve your credit score over time.

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8. Student Credit Cards

Student credit cards are designed for college students who are just starting to build their credit.

So, consider the credit limit offered and any rewards tailored specifically to college students, such as cashback on textbooks or dining out. Look for cards with no annual fee and low-interest rates.

9. Retail Credit Cards

Retail credit cards are credit cards offered by specific retailers, such as department stores or gas stations. These cards often offer rewards or discounts for purchases made at the retailer.

10. Premium Credit Cards

Premium credit cards offer high-end perks and rewards, such as access to airport lounges, concierge services, and travel credits.

These cards often come with high annual fees and require excellent credit scores.

When choosing a credit card, it’s important to consider your spending habits, financial goals, and credit score.

Take the time to research different types of credit cards and compare their rewards, fees, and interest rates.

By selecting the right credit card for your needs, you can maximize your rewards and save money on interest charges.

How do you choose your best credit card type?

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See how to choose your next card! Source: Adobe Stock

Choosing the perfect credit card can be a daunting task, but by following these tips, you can make an informed decision that aligns with your financial goals and spending habits.

Consider your spending habits

When choosing a credit card, consider your spending habits. Do you spend a lot on groceries, gas, or dining out? Look for credit cards that offer cash back or rewards points for these categories.

If you travel frequently, look for travel rewards credit cards that offer rewards points or miles for flights, hotels, and car rentals.

Check your credit score

Your credit score plays a big role in the type of credit card you can qualify for. Before applying for a credit card, check your credit score to see where you stand.

If you have a good or excellent credit score, you may qualify for credit cards with lower interest rates and higher rewards.

If your credit score is fair or poor, consider secured credit cards or credit cards designed for people with lower credit scores.

Compare fees and interest rates

When choosing a credit card, compare the fees and interest rates associated with each card. Look for cards with low or no annual fees and low-interest rates.

Also, consider any other fees associated with the card, such as balance transfer fees or foreign transaction fees.

Look for sign-up bonuses

Many credit cards offer sign-up bonuses or welcome bonuses, which can help you earn more rewards or cash back.

Look for credit cards with sign-up bonuses that align with your spending habits.

Consider redemption options

When choosing a credit card, consider the redemption options available for rewards or cash back.

Look for cards with flexible redemption options, such as the ability to transfer rewards to airline or hotel loyalty programs or the ability to redeem rewards for statement credits or gift cards.

If you want to learn more about credit cards for bad credit, check out the post we have separated below.

Best credit cards for bad credit: top 10 options

A credit-building card is a great option to improve your bad credit score and get a better financial life. So, read our list of the best credit cards for bad credit!

About the author

Sabrina Paes

Content Writer, Copywriter, and Ghostwriter. Content marketing professional with 5 years of experience. Specialist in investment, finance, and technology niche. MBA in Marketing at the University of São Paulo, Brazil. Content Writer by Rock Content, and University of California (UCDAVIS).

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