Owning credit cards is convenient and useful nowadays. It’s easy to make purchases both in-store and online, and credit cards can help you establish a good credit score. But in an ocean of options, how do you know which one is the best for you? Payday Depot has compiled the types of credit cards in the market and how they differ.
It is essential to note that these types are not mutually exclusive to each other. In other words, a credit card can belong to multiple categories and can offer multiple perks. Pretty cool, right? Let’s dive in!
Table of Contents
6 Kinds of Credit Cards
1. Rewards Credit Cards
This type of credit card can offer different rewards for different types of purchases. The usual types of purchases are gas, dining out, retail, and groceries. Rewards are usually in the form of vouchers or even items that the credit card company will send once you reach a specific tier. Others even have a catalog of what you can redeem and how many points you need.
2۔ Cashback Credit Cards
This one offers a refund of a specific percentage of your total purchases either by check, a statement credit, or bank transfer. Cashback credit cards are useful if you use your card for general purchases and you prefer cash as a reward instead of vouchers or other items.
3۔ Travel Credit Cards
Travel credit cards are usually tied up to a specific airline or transport system. When you use these cards to make your purchases, you get rewards in the form of miles that you can redeem for your travels. This is perfect for frequent travelers as big savings await! There are also other rewards that these credit cards offer, like travel insurance, baggage protection, and even airport lounges.
4. Low-Interest Credit Cards
These are the types of credit cards that offer the lowest interest rates. It’s the perfect choice for those who wish to make big purchases and want to use their credit cards for those. It’s also best to use these for purchases that you wish to pay over a long period of time so that you can minimize fees.
5. Student Credit Cards
If you are looking to establish a decent credit score and you feel like acquiring a credit card is the way to go, getting student credit cards is the best way to achieve this plan. This type of credit card is usually easy to apply to, and there are fewer requirements for application. The rewards are not that flashy, but it’s a good starting point.
6. Secured Credit Cards
This type of credit card needs a deposit before you can start to use them. It’s great for people who wish to control their spending as you won’t be able to increase the credit limit without increasing your deposit as well.
Owning a credit card has many uses in today’s world. However, it’s vital to know and understand the different types of credit cards so you can apply for the type that fits you best. Assess your needs and priorities, so you can choose the right one.
Read also: Credit Cards That Fit Your Needs