8 Types of Credit Cards

There are countless credit cards to choose from for all different types of spending and budgets. As such, it’s important to know your spending habits and what aspects of your financial life you want to strengthen by using a credit card. Let’s take a look at the unique features of each type of credit card.

1. Travel credit cards

Travel credit cards Offering amenities and perks aimed at making your trips less stressful and less expensive. They earn points or miles that you can redeem for travel.

Depending on the annual fee, the travel card may also include perks such as travel accident insurance, rental car insurance, airport lounge access, annual statement credits and access. Global Entry or TSA PreCheck To get you through airport security more quickly. Basically, the more expensive the card, the more widespread its benefits.

2. Introductory APR credit cards

Avoiding interest is the name of the game with this one Introductory APR Credit Cards. They offer 0% interest promotional periods for new cardholders, which help you avoid paying interest charges on balance transfers or new purchases.

These introductory offers typically last anywhere from nine to 21 months. During that window, your credit card balances won’t accrue interest, allowing you to pay them off more efficiently.

Introductory APR cards have higher credit requirements than standard credit cards, but they’re a great way to go Financing large, planned purchases Or to eliminate some existing credit card debt.

3. Balance transfer credit cards

Balance transfer credit cards Offer cardholders the opportunity to eliminate some of their existing credit card debt.

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By offering a 0% introductory interest rate over a fixed period of time, balance transfer cards allow you to pay A balance transferred from another credit card While avoiding the interest that usually accrues.

It is important to note that most balance transfer credit cards require a balance transfer fee that is typically 3% or 5% of the balance transferred. There are Credit cards without balance transfer feesBut they tend to offer lower introductory APR offers.

Often, paying a balance transfer fee is more cost-effective than paying several interest charges on a credit card with a high APR.

4. Rewards credit cards

Rewards Credit Cards Increase your daily spending by offering rewards on your spending. Along with this there are reward credit cards Annual fees and without; More expensive cards usually offer higher rewards rates.

Depending on the card, you can earn rewards as cash-back or points that you can convert into statement credits, gift cards, travel and more.. Reward redemption rates may vary from card to card.

5. Cash-back credit cards

Cash-back credit cards Similar to rewards credit cards, only they earn their rewards as cash back. Cash back cards typically have fewer redemption options, sticking primarily to statement credits or bank deposits.

They differ in how valuable the rewards are. Points can generally vary in how much they’re worth, but cash back is equivalent to 1% cashback but is worth 1 percent per dollar spent.

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Cash-back credit cards offer a flat rate for all purchases or a higher rate for specific purchases in bonus categories. Some cash-back cards also include purchase protections or introductory APR offers.

6. Airline credit cards

Airline credit cards are co-branded credit cards, meaning the airline brand teams up with the credit card issuer to provide cardholders with rewards and perks for a specific airline. They often include perks like priority boarding, in-flight discounts, annual statement credits or application fee credits for Global Entry or TSA PreCheck.

7. Hotel cards

As with airline credit cards, Hotel credit cards Co-branded cards but with hotel brands. They offer more rewards at their hotel properties and may include point earning bonuses and access to hotel loyalty programs that provide cardholders with additional benefits.

8. Collect credit cards

Store or retail credit cards These are rewards cards that are co-branded with a particular store. They provide rewards and perks based on their given store. These may include cash back or specific discounts and perks like 2-day shipping or extended warranties. They are generally easier to qualify for than standard credit cards, but have less favorable terms, including higher-than-average APRs and additional fees.

Varies by credit card issuer

Not every credit card is created equal, and neither are the companies that issue them. There are some differences between credit card issuers.

American Express Tends to offer a large number of premium cards. They offer a variety of credit card perks such as annual credits but require a higher annual fee. Explore And capital one Credit cards have no foreign transaction fees, making them great options for people who travel abroad frequently.

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Chase Offers several co-branded airline cards and premium business cards with their Ink Business Card family. Bank of AmericaUS Bank and City Different from their competitors. You’ll want to do your research to find the right credit card and issuer for your needs.

The bottom line

A credit card is available for every credit level and individual, it depends What are you looking for?. You want a credit card to increase how you already spend without changing your spending habits to match the card.

Consider why you need a credit card. Are you looking for travel rewards and perks? Or are you looking for a way to generate income on top of your necessary expenses? Or are you simply looking for a way out? Improve your credit score Or Get rid of credit card debt?

There isn’t one type of credit card for every type of spending, so it’s important to understand how you spend money and what aspects of your finances you want to improve.

The editorial content on this page is based on the objective, independent assessments of our writers and is not influenced by advertising or partnerships. It is not provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.

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