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. For instance, 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.

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:

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.

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 that you can use to book a flight.

• 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 also may have other benefits to help travelers. For example, Capital One travel cards offer perks including statement credits for TSA PreCheck® or Global Entry application fees, access to airport lounges, and annual travel credits.

Points cards might work similarly to other rewards cards. But instead of cash back or miles, rewards are offered as points. Similar to other kinds of rewards cards, you may be able to redeem points for cash back, travel, gift cards or credit toward your account balance.

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 credit cards: These can usually be used at the store or specified store affiliates. 

• Co-branded credit cards: 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.

Whether you’re opening a small business or freelancing on the side, a business credit card can be useful if you’re an entrepreneur or business owner. One reason is that 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 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.

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.

Secured credit cards are different from unsecured credit 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.

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.

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 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.

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.

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 credit card company. 

If you’re carrying a credit card balance, transferring it to a card with a lower rate could help you pay less interest. That is 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.

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

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.

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 to the next month. And missing payments could mean late fees or other penalties.

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:

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.

You can monitor your VantageScore 3.0 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. You can also get free copies of your credit reports from AnnualCreditReport.com.

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. 

If you’re interested in earning rewards on everyday purchases, then a card with a rewards program may be more appealing.

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.

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.

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.

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 and get pre-approved today.