11 types of credit cards

If you’re exploring credit cards, it’s helpful to understand what’s available and ask yourself a few questions: How do they match up to your personal finances and credit scores? What kinds of rewards do they offer? And what are the fees, interest rates and other charges associated with each type of card? 

This guide to credit card types can help you get started.

Key takeaways

  • There are many types of credit cards, including cash back cards, travel cards, student cards, secured cards and cards designed for people who are building credit.
  • Understanding the different types of credit cards can help you explore your options and decide which might be a good fit for you.
  • Applying for new credit can temporarily affect your credit scores. But using a pre-approval tool could help you predict your eligibility before applying.

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Rewards credit cards

Credit cards might fall into several rewards card categories. These cards might offer cardholders rewards in the form of cash back, miles or points. Some common examples include: 

1. Cash back credit cards

Cash back credit cards might reward everyday spending on things like groceries, gas, dining, entertainment or other bonus categories. For every qualifying purchase, cardholders earn back a percentage of what they spend.

Redemption options for cash back rewards might include statement credits, checks and gift cards. You may also be able to choose from a few different types of cash back credit cards. Two of the most common are: 

  • Flat-rate cards: These cards offer the same reward rate for all purchases. 
  • Category-earn cards: These cards may offer higher rewards when you use them for specific things, like groceries or dining out.

2. Travel rewards credit cards

Travel rewards cards allow cardholders to earn rewards like miles. You might come across two types of travel rewards credit cards:

  • General travel rewards cards: These cards aren’t associated with any particular airline or hotel. This may give you more freedom to choose how to redeem your rewards. For example, you could earn rewards miles toward a future flight. Or you could redeem rewards for perks, like vacation rentals.
  • Co-branded travel rewards cards: These cards are branded jointly by the credit card issuer and the merchant—usually a specific airline or hotel. When it comes to purchases, these cards typically function like any other credit card. But rewards may be limited to the specific airline or hotel associated with the card.

If you’re interested in a travel card, be sure to pay attention to rewards structures and whether the card lets you earn for all purchases—not just things related to travel. Take note of bonuses for chances to earn higher rates or bonus miles too.

Travel cards may have other benefits to help travelers too. For example, Venture from Capital One offers statement credits for TSA PreCheck® or Global Entry application fees and annual hotel credits.

3. Points credit cards

Points cards might work similarly to other rewards cards. But instead of cash back or miles, rewards are offered as points.

4. Store credit cards

Store credit cards work a lot like other types of credit cards, though they’re affiliated with a specific store. And as the Consumer Financial Protection Bureau (CFPB) explains, “These cards typically provide additional discounts and frequent shopper rewards when used exclusively at their stores or with affiliate retailers.” 

There are two types of store credit cards:

  • Private label: These can usually be used at the store or specified store affiliates. 
  • Co-branded general purpose: Like traditional credit cards, these can typically be used anywhere—even outside of the store and its affiliates. 

Store cards, like other credit cards, can be a great financial tool when used responsibly. And they can offer discounts, benefits and access to experiences that are exclusive to cardholders.

5. Business credit cards

Whether you’re opening a coffee shop or freelancing on the side, a business credit card can be useful to entrepreneurs and business owners. One reason is because it can help keep your business and personal expenses separate. This may make things easier when it comes to doing taxes. Business rewards cards might also offer higher credit limits than consumer credit cards do. 

Some business credit cards offer a flat-rewards rate for all purchases. Others might have higher rewards for business-related purchases like travel or office supplies. 

Plus, there are often other perks that might come with a business credit card:

  • Employee spending tracking and management
  • Travel and emergency assistance
  • Discounts with a selected list of merchants
  • Additional cards for your employees to use

If your issuer reports your business credit card to the business credit bureaus, responsible use of it can help you build your business credit. And if your issuer reports your business credit card to the consumer bureaus and you’re personally responsible for the account, that can also affect your personal credit scores.

Credit-building cards

If you’re looking to build or repair your credit, credit-building cards might help. Secured credit cards and student credit cards are two options that might make it easier to access a line of credit.

6. Secured credit cards

Because credit card issuers look at credit scores and credit reports during credit card qualification, applying for a secured credit card may be an option to help build your credit if you have less-than-excellent credit. Some secured cards even offer rewards.

Secured cards are different from unsecured cards because they require a security deposit to open an account. The deposit acts as collateral. And it’s usually refundable. Other than that, a secured card functions the same as an unsecured card.

7. Student credit cards

Student credit cards work similarly to other types of cards. But they’re tailored to college students without an established credit history. That’s why they might be easier to qualify for and offer more relevant perks and benefits.

If you’re a student, you can learn more about how student cards work and check out a guide to the best student credit cards.

Low-interest credit cards

If you struggle with credit card bills, low-interest cards can help you better manage your monthly payments. This category may include cards with promotional annual percentage rates (APRs) or balance transfer options.

8. Credit cards with low or 0% APR intro rates

Some credit cards offer low or 0% introductory rates that apply to purchases. These can be useful if you’re planning to make a big one-off purchase and then pay it back quickly.

By law, intro rates must last at least six months, but they can sometimes last longer. During that time, you can focus on paying down your account balance. That’s because you may not have to pay much—or any—interest, depending on the promotional period and rate.

When the introductory APR expires, the standard APR kicks in. The standard APR will apply to both future card balances and your current balance if you carry one over. Depending on your card’s terms and conditions, it could kick in early if you are late with payments or if you exceed your credit limit.

9. Balance transfer credit cards

When you transfer a credit card balance, you move an existing balance from one card to another—ideally at a lower interest rate. But you can’t usually transfer balances from the same card issuer

If you’re carrying a credit card balance, transferring it to a card with a lower rate could help you pay less interest—if you use the card responsibly and pay the balance during the promotional period. It could also help you consolidate debt or combine multiple balances into one, which could simplify payments.

But keep in mind that a balance transfer could come with fees. According to the CFPB, balance transfer fees are typically a fixed amount or a percentage of the amount you transferred—whichever is higher. And that fee could impact any potential savings.

Other kinds of credit cards

Here are some more general cards that may suit your spending needs. 

10. Credit cards with no annual fee

There are lots of good credit cards offering rewards and perks that don’t come with an annual fee

If there’s no annual fee, that means you won’t be charged a fixed annual membership fee simply for having the card. But there may be other credit card fees or interest and finance charges, depending on how you use the card.

11. Charge cards

Charge cards function similarly to credit cards. But unlike a credit card, charge cards don’t usually come with a set spending limit. Instead, charge accounts are often approved based on your financial history and your spending and payment habits. But they typically assess a fee to use the card.

Cardholders typically have to repay the balance on a charge card in full each month or when they get their statement. That means balances aren’t carried over into the next month. And missing payments could mean late fees or other penalties.

How to choose the best type of credit card for you

Now that you’re familiar with some of the most common types of credit cards, how do you choose the best credit card for your needs? Here are a few things to think about before submitting an application:

1. Consider your credit scores

Your credit history could play a role in which cards you qualify for—and on what terms. Typically, applicants with higher credit scores qualify for better terms, such as higher spending limits, lower interest rates and better rewards. 

But if you’re working to improve your scores, you may want to focus your search on a credit-building card or a secured credit card.

You can monitor your credit score and access your TransUnion® credit report for free with CreditWise from Capital One. It’s free for everyone, and using CreditWise won’t affect your credit scores.

2. Determine your goals

What do you want out of your new credit card? If credit card debt consolidation is your goal, you may consider a balance transfer card with a low or 0% intro APR. But remember, promotional rates eventually expire, and there may be fees associated with the balance transfer. 

And if you’re interested in earning rewards on everyday purchases, then a card with a rewards program may be more appealing. Keep these financial goals in mind when comparing cards so you can find the best option for you.

Or maybe you’re looking for a credit card you can use to build credit. If that’s the case, keep in mind that it takes time to build credit. And it’s important to use your card responsibly by doing things like paying at least the minimum amount due every month.

3. Understand card costs

Some cards come with annual fees. Things like missed payments could also result in fees or other penalties—but those are avoidable with responsible use. Before you apply, be sure you understand how credit cards work and any potential costs.

4. Compare your options

Once you’ve picked the type of credit card that works for your budget and goals, the next step is deciding which card to choose. 

Capital One has a useful credit card comparison tool that helps you search by credit requirements, rewards and other factors. And with pre-approval from Capital One, you can find out whether you’re pre-approved for a credit card before applying. It’s quick and won’t hurt your credit scores.

Types of credit cards in a nutshell

Finding the right credit card—whether it’s a travel rewards card, cash back credit card or a student credit card—can take patience and research. Take the time to review your credit, compare card costs and find a card that offers benefits that work for you. Getting familiar with the different types of cards and how they work can help you find the best credit card for you.

When you’re ready, you can compare cards from Capital One.

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