There are many types of credit cards available in the United States, and it can be difficult to figure out which one is right for you. Do you want a card with great rewards? A card that offers low-interest rates? Or maybe a card with no annual fee?
We are going to outline 10 different types of credit cards and explain how to pick the right one for your needs.
Two Basic Credit Card Types
Ac credit cards fit into two categories: secured and unsecured. Secured cards require a security deposit, which is usually equal to your credit limit. This protects the issuer in case you default on your payments. On the other hand, unsecured cards do not require a security deposit and are typically more difficult to get approved for.
Secured Credit Cards
There are two types of a secured credit card: standard and rewards. Standard secured cards have no annual fee, but they do not offer any perks or benefits like other types of unsecured cards do.
Rewards-based secured cards offer the same rewards as unsecured cards, such as points or miles that can be redeemed for travel, cash back, or gift cards. However, you will need to meet certain requirements in order to qualify for a rewards-based secured card.
Unsecured Credit Cards
There are many types of unsecured credit cards, including rewards cards, cash back cards, travel cards, and balance transfer cards. For example, rewards cards offer perks, such as points or miles that can be redeemed for travel, or gift cards. Travel cards offer rewards and benefits when you use them to book travel through the issuer’s website or app, and so on.
What Are the Different Types of Credit Cards in the USA?
There are many kinds of credit cards available in the United States, and each one has its own set of benefits and drawbacks. Here are the ten most common credit card types you can find on the market, along with their advantages and disadvantages.
Standard Secured Card
Standard secured cards. They do not have any rewards or benefits, but they do require a security deposit equal to your credit limit. This helps protect the issuer in case you default on your payments. This is one of the three types of credit cards that are most diverse: personal, business, and platinum.
Business Credit Card
Business credit cards are designed for business owners who need to separate their personal and business expenses. These types of cards offer a variety of perks, such as rewards points, lounge access, and statement credits for airline tickets or hotel stays.
They also typically have higher credit limits than other types of cards do. In order to possess one, you would have to be a business owner.
Travel Rewards Credit Card
Best types of credit cards for those bitten by the travel bug. Travel rewards credit cards allow you to earn points or miles when you use them to book travel through the issuer’s website or app. These points or miles can then be redeemed for travel, cashback, or even gift cards. Many of these cards also come with other perks, such as free checked bags or priority boarding.
In order to obtain them, naturally, you would have to travel more frequently.
Balance Transfer Credit Card
Balance transfer credit cards allow you to move your existing credit card debt from one issuer to another. This can be helpful if you are looking to save on interest rates or want to consolidate your debts into one payment.
The downside may be higher interest rates and fees than other types of cards.
Retail Store Credit Card
Types of credit cards you should have if you enjoy a particular brand are definitely retail store credit cards.
Retail store credit cards are issued by a specific retailer or group of retailers, such as Target or Macy’s. These types of cards may offer perks and benefits when used at the issuer’s locations, but they typically have high interest rates and annual fees. They also tend to have low credit limits compared to other types of cards.
Cash Back Credit Card
Cashback credit cards give you a percentage of your purchase amount back in the form of statement credits or checks. These cards typically have no annual fee, and some even offer sign-up bonuses.
The disadvantage with cashback credit cards is that you have to wait until the end of each billing cycle in order to receive your statement credit or check. These types of cards also usually require good or excellent credit too.
Platinum Credit Card
A list of types of credit cards in the USA can’t be complete without a platinum. If you have one, you’re in luck. Platinum credit cards are high-end credit cards that offer a variety of perks, such as rewards points, lounge access, and statement credits for airline tickets or hotel stays. They also typically have high credit limits.
All those types of credit cards that are platinum aren’t perfect, though. While they’re great for travel and rewards, they may not have the best interest rates or fees.
Student Credit Card
Student credit cards are designed for students who want to establish their own credit history. These types of cards typically have lower interest rates and annual fees than other types of cards, but they may require a co-signer. They also tend to offer fewer rewards or benefits than other types of cards do.
Subprime Credit Card
What types of credit cards are there if I have no credit history? Well, start with this one. Subprime credit cards are for people with poor or no credit history. These types of cards typically have lower interest rates and annual fees than other types of cards, but they may require a co-signer.
Unfortunately, they also tend to offer fewer rewards or benefits than other types of cards do.
Prepaid Credit Card
Prepaid credit cards allow you to load money onto them and use them like a debit card. They do not require a checking account or credit check, but they also don’t help build your credit score. Prepaid cards may have fees for activation, monthly maintenance, ATM withdrawals, balance inquiries at bank tellers’ windows, and other features
What Types of Credit Cards Should I Have?
There are a number of factors to consider when choosing the best credit card for you. To start, think about what types of rewards or benefits you want from your card. Do you want cashback? Travel rewards? Retail store discounts? Then, compare interest rates and fees between different cards to find the one that is the best deal for you.
Finally, make sure the card you choose has no annual fee or a low one that can be offset by any rewards or benefits it offers.
How Can I Get the Best Interest Rate on My Credit Card?
The best way to get the best interest rate is to shop around for different types of cards and compare their rates. Don’t shy away from new types of credit cards like various zero percent APR credit cards, but do your research. Look at how much each card charges in interest and fees. Also, look at what types of rewards or benefits they offer. For example, a credit card that offers cashback may charge higher interest rates than one that doesn’t offer any rewards at all.
How Can I Get the Most Out of My Credit Card?
To start, make sure you always pay your bill on time. This will help improve your credit score and may qualify you for a lower interest rate on future cards. Next, try to use your card for all of your everyday purchases. This will help you rack up rewards points or cashback faster. Finally, never carry a balance on your card. This will only lead to expensive interest payments and late fees.
Conclusion
Credit cards can be a great way to build your credit, earn rewards and pay for everyday purchases. But before you apply for one, make sure you know different types of credit card options, what precise benefits they offer, and how much interest rates or fees each card charges.
FAQs
What is the best type of credit card for me?
The best type of credit card for you depends on what types of rewards or benefits you want from your card. Look at interest rates and fees between different cards to find the one that suits your needs and requirements the best.
What are the 3 types of credit cards?
The three credit card types are personal, business and platinum. Personal credit cards are meant for everyday use, while business credit cards are meant for (small) business owners. Platinum credit cards have high annual fees and interest rates but also typically have higher credit limits than other types of cards do.
What are the 7 categories of credit cards?
The seven credit card types are personal, business, platinum, cashback, travel rewards, retail store discounts, and student. Each type of card falls into one or more of these categories.
What is the easiest type of credit card to get?
Subprime credit card is definitely the easiest credit card to obtain because they are meant for people with poor or no credit history. These types of cards typically have lower interest rates and annual fees than other types of cards, but they may require a co-signer. Subprime credit cards are of those types of credit cards that tend to offer fewer rewards or benefits than other types of cards do.
