8 types of credit cards

There are countless credit cards to choose from, for all types of expenses and budgets. As such, it’s important to know your spending habits and the aspects of your financial life that you’re looking to strengthen by using a credit card. Discover the typical characteristics of each type of credit card.

1. Travel Credit Cards

Travel Credit Cards offer amenities and benefits aimed at making your travels less stressful and less expensive. They earn points or miles that you can redeem for travel.

Depending on the annual fee, a travel card may also include benefits such as travel accident insurance, rental car insurance, airport lounge access, annual statement credits and access at Global Entry or TSA PreCheck to get through airport security much faster. Basically, the more expensive the card, the more extensive its benefit package.

2. Introductory APR Credit Cards

Avoiding interest is the name of the game with introduction to APR credit cards. They offer 0% interest promotional periods for new cardholders, which helps you avoid paying interest charges on balance transfers or new purchases.

These introductory offers usually last from nine to 21 months. During this window, your credit card balances will not accrue interest, allowing you to pay them off more efficiently.

Introductory APR cards tend to have higher credit requirements than standard credit cards, but they can be a great way to finance large and planned purchases or to eliminate existing credit card debt.

3. Credit cards with balance transfer

Credit cards with balance transfer offer cardholders the opportunity to get rid of some of their existing credit card debt.

By offering an introductory interest rate of 0% for a fixed term, balance transfer cards allow you to repay a balance transferred from another credit card while avoiding the interest it would normally generate.

It is important to note that most balance transfer credit cards require a balance transfer fee which is usually 3% or 5% of the transferred balance. There are credit cards with no balance transfer feesbut they tend to offer shorter introductory deals.

More often than not, paying a balance transfer fee will be more profitable than paying lots of interest charges on a credit card with a high APR.

4. Rewards Credit Cards

Rewards credit cards bolster your daily spending by offering rewards on your spending. There are credit cards with rewards annual fee And without; more expensive cards generally offer higher reward rates.

Depending on the card, you can earn rewards in the form of cash back or points, which you can turn 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 are very similar to rewards credit cards, except that they earn their rewards exclusively in the form of cash back. Cash-back cards generally have fewer redemption options, sticking mostly to statement credits or bank deposits.

They also differ in the value of the rewards. Points can generally vary in value, while cash back tends to equal 1% cash back worth 1 cent per dollar spent.

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

6. Airline Credit Cards

Airline credit cards are co-branded credit cards, which means that an airline brand has partnered with a credit card issuer to offer cardholders rewards and benefits for a specific airline. They typically include benefits such as priority boarding, in-flight discounts, annual statement credits, or application fee credits for Global Entry or TSA PreCheck.

7. Hotel Cards

Just like airline credit cards, hotel credit cards are co-branded cards but with hotel brands. They offer higher rewards at their respective hotel properties and may include access to hotel loyalty programs that offer bonus points and additional amenities to cardholders.

8. Store credit cards

Store or retail credit cards are rewards cards co-branded with a specific store. They offer rewards and benefits centered on the store they come from. These may include cash back or specific discounts and perks like 2-day shipping or extended warranties. They are generally easier to obtain than standard credit cards, but have less favorable terms, including higher than average APRs and additional fees.

Differences by credit card issuer

Just as all credit cards are not created equal, neither are the companies that issue them. There are some differences between credit card issuers.

American Express tends to offer more premium cards. They offer a wide variety of credit card benefits like annual credits, but require hefty annual fees. Discover and Capital one Credit cards have no foreign transaction fees, making them a good choice for people who travel abroad often.

Hunt offers a number of co-branded airline cards and good business cards with their Ink business card family. Bank of AmericaAmerican bank and Town also stand out from their competitors. You’ll want to do your research to find the credit card and issuer that best suits your needs.

The bottom line

There is a credit card available for each level of credit and each person, it depends on What are you looking for. You want the credit card to already reinforce your spending, without changing your spending habits to match the card.

Ask yourself why you want a credit card. Are you looking for travel rewards and benefits? Or are you looking for a way to make your necessary expenses profitable? Or are you just looking for a way to improve your credit score Where eliminate credit card debt?

There’s no one type of credit card meant to support all types of expenses, so it’s important to understand how you spend money and what aspect of your finances you’re looking to improve.

Editorial content on this page is based solely on objective, independent assessments by our editors and is not influenced by advertising or partnerships. It was not supplied or commissioned by a third party. However, we may receive compensation when you click on links to products or services offered by our partners.