1. Standard Credit Cards
Standard credit cards are the most basic type of card available, providing users with a revolving credit line that they can use to make purchases or withdraw cash (if cash advances are enabled). These cards do not offer rewards programs or other specialized features, making them a straightforward choice for consumers who prefer simplicity. They usually come with a variety of interest rates based on the cardholder's creditworthiness and have no or low annual fees. However, their simplicity also means they lack many of the perks that more advanced cards offer, such as cashback or travel benefits.
Best for: Individuals who want a basic card for regular purchases without worrying about rewards or fees.
2. Rewards Credit Cards
Rewards credit cards provide a wide range of incentives for spending, including cashback, points, or travel miles. These cards are popular because they allow cardholders to earn rewards on everyday purchases. Cashback cards give a percentage of purchases back as cash, while points or miles cards allow you to redeem for travel, merchandise, or other rewards. Rewards credit cards often come with attractive sign-up bonuses, especially when certain spending thresholds are met within the first few months. However, these cards may also come with annual fees and require good to excellent credit for approval.
Best for: Consumers who want to earn rewards on daily expenses and can pay off their balances monthly to avoid interest charges.
3. Secured Credit Cards
Secured credit cards are specifically designed for individuals with no credit or bad credit who are looking to establish or rebuild their credit. These cards require the cardholder to make a security deposit, which acts as collateral for the credit limit. Typically, the credit limit is equal to the amount of the deposit. Because of the deposit requirement, secured credit cards are easier to qualify for than traditional credit cards. Over time, as the cardholder demonstrates responsible use, their credit score can improve, potentially allowing them to upgrade to an unsecured card. Many secured cards report activity to the major credit bureaus, making them a valuable tool for building credit.
Best for: Individuals with no or poor credit looking to build a positive credit history.
4. Student Credit Cards
Student credit cards are designed for young adults, typically college students, who are new to credit and may not have a full-time income. These cards often come with lower credit limits and fewer perks, but some do offer rewards or incentives for responsible card usage, such as cashback or credit for good grades. Student credit cards usually have lower qualification requirements, making it easier for students to be approved. Many also come with educational tools and resources to help cardholders learn about credit management. They are a great way for young adults to begin building their credit history while still in school.
Best for: College students who want to start building their credit while enjoying a few rewards.
5. Business Credit Cards
Business credit cards are tailored to the needs of business owners, offering specialized features such as higher credit limits, rewards on business-related purchases (e.g., office supplies, travel), and expense management tools. These cards help business owners keep their personal and business expenses separate, which is crucial for accounting and tax purposes. Many business cards also offer employee cards, allowing business owners to track and manage their team’s spending. Business credit cards often come with rewards programs tailored to business needs, and some offer valuable perks like travel insurance or expense-tracking software. However, they may also require a personal guarantee, meaning the cardholder is responsible if the business can't pay.
Best for: Business owners who need to manage expenses and want rewards tailored to business spending.
6. Travel Credit Cards
Travel credit cards are designed for frequent travelers, offering rewards and perks that enhance the travel experience. Cardholders earn points or miles for purchases, which can then be redeemed for flights, hotels, rental cars, and more. Many travel cards also come with travel-related benefits, such as priority boarding, free checked bags, and airport lounge access. Some cards even offer travel insurance, rental car coverage, and protections for delayed or lost luggage. However, travel credit cards often have higher annual fees, which are usually offset by the perks and rewards they provide. These cards are ideal for individuals who travel often and can make the most of the travel-related benefits.
Best for: Frequent travelers looking to maximize rewards and enjoy travel-related perks.
7. Balance Transfer Credit Cards
Balance transfer credit cards offer an excellent solution for individuals with high-interest credit card debt. These cards typically come with an introductory 0% APR for balance transfers, allowing cardholders to transfer existing debt from other credit cards and pay it off without incurring additional interest charges during the promotional period. The length of the 0% APR period varies, but it often ranges from 12 to 18 months. Some balance transfer cards charge a transfer fee, usually between 3% and 5% of the transferred amount, but this fee can be worth it if the cardholder is saving significantly on interest. Once the introductory period ends, the standard APR applies, so it’s important to pay off the balance before the higher rate kicks in.
Best for: People looking to consolidate and pay off high-interest credit card debt.
8. Low-Interest (APR) Credit Cards
Low-interest credit cards offer a reduced interest rate compared to standard credit cards. These cards are ideal for individuals who may carry a balance from month to month but want to minimize interest charges. Some low-interest cards come with an introductory 0% APR period, during which no interest is charged on purchases or balance transfers. After the introductory period, the card’s regular interest rate applies, but it is still lower than that of many other cards. These cards usually have fewer rewards and perks compared to rewards or premium cards, but the primary benefit is the reduced cost of carrying a balance.
Best for: Cardholders who carry a balance and want to reduce the amount they pay in interest.
9. Store Credit Cards
Store credit cards are issued by specific retailers and are typically used to make purchases at the issuing store. These cards often come with exclusive discounts, rewards, or special financing offers for cardholders. While store credit cards can offer great savings for frequent shoppers, they usually have higher interest rates than traditional credit cards, and the rewards may be limited to the issuing store. Some store cards are “closed-loop,” meaning they can only be used at the retailer that issued them, while others are “open-loop” and can be used anywhere but offer enhanced rewards for purchases at the retailer.
Best for: Frequent shoppers at a particular store who want to earn rewards or get discounts.
10. Gas Credit Cards
Gas credit cards provide rewards or cashback on fuel purchases, which is beneficial for individuals who drive frequently. These cards are often co-branded with gas station chains, offering higher rewards for fuel purchases at that chain. In addition to gas, many of these cards also provide rewards on convenience store items, vehicle maintenance, or travel-related expenses. Gas credit cards can be a great way to save on one of the largest recurring expenses for drivers. However, it's important to compare rewards across different cards, as some general rewards cards may offer competitive rates for gas purchases without limiting you to specific gas stations.
Best for: Frequent drivers looking to save on fuel and related purchases.
11. Premium Credit Cards
Premium credit cards offer an array of luxury benefits and rewards, but they also come with higher annual fees. These cards typically provide exclusive perks such as airport lounge access, travel credits, concierge services, and premium hotel and airline benefits. In addition to these high-end perks, premium cards often come with enhanced rewards rates on spending, making them an attractive choice for high-spending consumers. Many premium credit cards also offer large sign-up bonuses and travel insurance coverage. The higher fees associated with these cards are usually offset by the value of the benefits, but they are best suited for individuals who can take full advantage of the card’s offerings.
Best for: High-income individuals or frequent travelers looking for luxury perks and premium services.
12. Credit Cards for Bad Credit
Credit cards for bad credit are designed to help individuals with poor credit scores rebuild their credit. These cards are generally easier to qualify for, but they often come with higher interest rates and lower credit limits. Some cards may require a security deposit, making them similar to secured cards, while others are unsecured but come with higher fees. These cards typically report to the major credit bureaus, so responsible use (such as paying bills on time) can help improve a person’s credit score over time. However, cardholders should be careful to avoid late payments and carrying a balance, as the high interest rates can quickly lead to debt.
Best for: Individuals with poor credit who want to rebuild their credit history.
13. Airline Credit Cards
Airline credit cards are co-branded with specific airlines and offer perks that cater to frequent flyers. These cards allow users to earn miles for purchases, which can then be redeemed for flights, seat upgrades, and other travel-related rewards. Airline credit cards often come with exclusive benefits such as free checked bags, priority boarding, and discounts on in-flight purchases. Some premium airline cards even provide lounge access and travel insurance. While airline cards are great for frequent travelers loyal to a specific airline, the rewards and benefits may be limited if you fly with different carriers.
Best for: Frequent flyers who are loyal to a specific airline and want to earn travel rewards.
14. Charge Cards
Charge cards are unique in that they have no preset spending limit, allowing cardholders more flexibility in their purchases. However, the balance on a charge card must be paid in full each month, as there is no option to carry a balance over time. Charge cards often come with premium rewards and benefits, such as travel perks, purchase protections, and concierge services, similar to those offered by premium credit cards. Because of the strict repayment requirements, charge cards are best suited for individuals who are confident they can pay their balance in full every month. These cards typically have high annual fees, but the rewards and benefits can outweigh the costs for frequent users.
Best for: Individuals who can pay off their balances in full each month and want premium perks and rewards.