Consumers nowadays are bombarded with credit card offers from seemingly endless providers, and it's easy to feel overwhelmed by the huge volume of options. But, you need not become an expert on every credit card available. If you already know what kind of credit card will best suit your requirements, then you can devote your attention to learning more about specific cards in that category.
10 Distinct Kinds of Credit Cards
How, therefore, does one go about selecting an appropriate charge card? Read on to learn about the many credit card options available to you and how they could fit into your long-term financial plans.
Reward Credit Cards
Some rewards credit cards even provide extra points in common expenditure areas like grocery, petrol, and eating out. Many rewards credit cards also provide you the option of cashing in your rewards for statement credits, gift cards, or even items. Because of this, you may use one of these credit cards with confidence for the kinds of ordinary purchases that don't need interest or a grace period. It's possible to earn money back or travel rewards on purchases you want to make anyhow, such as groceries and home supplies, when you use a credit card that offers rewards.
Cash Back Credit Cards
Some cashback credit cards provide a flat percentage rebate on all purchases, while others have more nuanced reward structures. There are a few different reward structures available in this space, with some offering a flat rate and others offering additional points for spending in certain areas like eating out or taking a vacation. Additionally, some cards provide a set rate of points on all transactions outside of the bonus categories and bonus categories that rotate every three months.
There are also a lot of cashback credit cards that don't charge a yearly fee. However, some cards with better rewards & bonus offers do charge small annual fees, usually less than $100. Instead of getting a flat-rate card, which really is great for those with varying expenses but no special needs, you may get a bonus subcategory card if you invest more than average in certain categories, like grocery or eating out.
Travel Credit Cards
Travel credit cards allow you to collect rewards tailored exclusively to travel, such as flexible trip credits that may be used for any travel transaction or points that can be transferred to airline or hotel programs. You may earn points for specialized programs with certain travel credit cards, including frequent traveler or hotel loyalty programs.
Keep an eye out for premium credit cards that include travel advantages, including airport lounge entrance, yearly travel credits, and application fees waived for programs such as Global Entry & TSA PreCheck if you frequently travel for work or pleasure. Many of the finest travel rewards credit cards allow you to accumulate points & miles by making regular non-travel-related transactions, so you don't even need to leave the city to start doing so.
Balance Transfer Credit Cards
If you're struggling to keep up with payments on high-interest credit debt, you could be contemplating a balance transfer credit card. The finest balance transfer credit cards provide an initial 0% APR for a period of 15-21 months, during which time you may concentrate on paying off your debt without worrying about interest.
There are certain credit cards that don't charge a balance transfer fee, but the vast majority of them charge a cost of between 3% and 5%. Despite the balance transfer charge, it may be worthwhile to transfer balances to your card during the promotional APR period because of the potential interest savings.
Corporate Credit Cards
By using a business credit card, users may keep their corporate and personal spending distinct, as well as collect points on all of their business purchases. Credit cards for businesses come in a wide variety of forms, including those that provide cash back, general incentives, travel perks, and even secured lines of credit. To be approved for a corporate credit card, you must have a legitimate company or other sources of regular revenue.
You know you have an excellent business credit card if you can save money and streamline your operations by using it for all of your company's expenses. You should look for a credit card that offers a rewarding rewards program, allows you to keep track of your spending, and has other features that will improve your bottom line. While certain business credit cards provide a flat rewards rate on all transactions, others offer increased benefits on categories of spending that are particularly important to a company, such as travel and internet access. When you're ready to cash in your rewards, most business credit cards allow you to choose between cash back and airline miles.
Student Credit Cards
Student credit cards are a kind of "beginning credit card" designed for students with little or no credit history. That is to say, the criteria for applying are less severe, making it more likely that you will be accepted. Credit cards designed for students often don't have annual fees and frequently come with extra incentives like discounts and cashback for high grades and smart spending. The establishment of positive credit history and the formation of sound financial habits may get off to a strong start when a student signs up for a credit card and uses it wisely.
Co-Branded Credit Cards
Credit cards for a specific shop or brand that are issued by more mainstream financial institutions like Chase, Citi, and American Express are known as "co-branded" cards. You may find credit cards that work with certain loyalty programs, such as those issued by airlines that allow you to earn miles in a particular frequent flyer program or hotels that allow you to earn points in a particular loyalty program, among other options. Some shop partners issue their own credit cards, known as co-branded credit cards, which may be used everywhere Visa is accepted. Co-branded credit cards often only give benefits for one specific brand, but those incentives tend to be substantial and, in many circumstances, more valuable than cash back.
Store Credit Cards
Consumers may make in-store purchases on credit and make monthly payments to the retailer. Some shop credit cards may be used in other locations within the same retail chain, although this is the exception rather than the rule. The interest rates on retail credit cards are often higher than those on general-purpose credit cards, and they frequently impose delayed interest charges. In a deferred interest arrangement, you get an initial rate that is either low or zero percent, but you will be charged interest on the unpaid balance from the day the interest was deferred. However, you may reap the benefits of a shop credit card's incentives and bonuses by making timely payments.
Secured Credit Cards
Most credit cards don't require you to put anything down as collateral. Secured credit cards need a cash deposit to protect a limited credit line, generally for the same amount. For instance, you may apply for a protected credit card and make a $500 down payment to get a $500 credit limit. You may put down as little as $49 all at once to establish your credit limit. Secured credit cards, which require you to put up collateral in case you don't make your payments, are the simplest sort of credit card to be accepted, and they may be quite useful if you need to start building credit from the start or restore your credit following a financial setback.
APR & Low-Interest Credit Cards
Many credit cards have introductory APRs of 0% for the first 12 to 18 months on all transactions. These credit cards might be helpful if you want to make a major transaction and pay it off over time. Low-interest credit cards provide lower-than-average rates generally, not just during promotional offers.
