If you are looking for a credit card, it is a good idea to have an understanding of the types of credit cards available.
There are numerous types of credit cards available each with their specific advantages that may suit your unique credit needs.
Read on to learn about some of the different types of credit cards and then when you are finished try out our credit card “chaser” to find and compare the best credit card for your personal situation.
Detailed Listings of Credit Card Types
Read on to the bottom of this page for a brief overview of each type of credit card but if you want detailed information about a specific type of card then here is a listing of all of the credit card detail pages:
- Bad Credit Credit Cards
- Best “Build Credit” Credit Cards
- Top 10 Best Credit Cards
- Types of Credit Cards
- Premium Credit Cards versus Regular Credit Cards
- College Credit Card
- Low Introductory Rate Credit Card
- Merchant Credit Card
- No Annual Fee Credit Card
- University Credit Cards
- Store Credit Card
- Unsecured Credit Cards
- Student Credit Cards
- Secured Credit Cards
- Travel Credit Cards
- Sports Credit Cards
- Retail Credit Cards
- Points Credit Cards
- Hotel Credit Cards
- Home Improvement Credit Cards
- Gas Credit Cards
- Entertainment Credit Cards
- Dining Credit Cards
- Charity Credit Cards
- Auto Credit Cards
- Reward Credit Cards
- Prepaid & Debit Cards
- Low Interest Credit Cards
- Instant Approval Credit Cards
- Cash Back Credit Cards
- Balance Transfer Credit Cards
- Business Credit Cards
- No Credit History Credit Cards
- Fair Credit Credit Cards
- Good Credit Credit Cards
- Excellent Credit Score Cards
- Airline Credit Cards
Airline Credit Cards
If you are a frequent flyer, an airline credit card could be the answer for you. Reserving airline tickets with your credit card is the most convenient way to book a flight, and many airlines now have their own sponsored credit cards.
With each flight you book, you can earn points toward frequent flyer miles. As gas prices are rising and flights become more expensive, frequent flyer miles can be a big help to your personal budget. Also, many credit card companies offer reward points as part of their normal rewards system toward discounted or free airline tickets.
Business Credit Cards
Business credit cards are valuable to both small business owners as well as large corporations. A business credit card allows to keep track of expenses by keeping them separate from personal transactions and at the same time offering benefits equal to or surpassing those of a standard personal credit card.
Some common options on a business card include pre-set spending limits to keep employees under control coupled with larger overall credit lines in case of business emergencies.
Business cards also offer rewards to owners along the lines of frequent flyer miles, points for rental cars, points for office supplies or simply points that can be redeemed for any number of products.
Balance Transfer Credit Cards
If you find yourself with a card carrying a high APR, balance transfer credit cards can save you considerable money in interest. A balance transfer card is simply a card that offers a introductory rate on balance transfers from higher interest credit cards. These rates can be as low as 0 percent on all balance transfers.
You will want to pay attention to the fees involved and the interest rate after the introductory period is over. The balance transfer credit card may carry a low introductory APR, but include balance transfer fees, high interest rates once the introductory period is over and repayment of interest accrued during the introductory period if the balance is not paid in full.
Balance transfer cards can save you money, but you have to be a savvy consumer and make sure you pick the right card.
Cash Back Credit Cards
Cash back credit cards are another type of reward card that offers you cash back from your purchases based upon a pre-determined percentage. Once you get to a certain level of points or purchasing dollars, the credit card provider will send you a check. If you are someone who uses your credit card as a convenience for daily purchases, a cash back credit card can offer big savings.
Most cash back credit cards offer the same features as standard credit cards, though these types of cards are generally reserved for those with better credit histories and credit scores.
Free Credit Cards
Free credit cards, or no fee credit cards, are more common today than a decade or two ago. In the past, many credit card companies required an annual fee for the use of their credit card. There are still some credit cards that require an annual fee, but they generally offer added-value services as an enticement.
Free credit cards still offer extra services and features that, for most consumers, meet their needs. Rewards points, free credit reports, and credit card theft protection are only a few of the features you can get without paying an annual fee for your credit card.
Instant Approval Credit Cards
Instant approval credit cards approve your application in a matter of minutes. It takes only a few minutes to fill out an online application after which approval can come within seconds. The Internet has made instant approval credit cards possible with fast information gathering and communication.
You will have to provide sensitive information in order for the credit card provider to gain access to your credit score. This you will have to give out over the internet, but there is no need to worry. The credit card companies’ websites are secure and your personal information will be safe.
Low Interest Credit Cards
Low interest credit cards may take several forms. You may have a low interest credit card with a fixed APR that does not change over time unless you fail to make payments or are late on your payments.
Those credit cards with the lowest interest rates are reserved for those with the best credit history and credit scores. There are also low interest credit cards that offer low introductory interest rates for a specified period of time before the interest rate rises.
Both types of low interest credit cards can save you lots of money on interest payments, though you should make sure to read the fine print when it comes to the specifics of a low introductory rate credit card offer.
Online Credit Card Applications
Online credit card applications have made it efficient and convenient to apply for credit cards. It only takes a few minutes to fill out a credit card application and approval is virtually instant. An online credit card application will ask you for specific sensitive information, but the websites are guaranteed secure. All of the major credit card providers now have some form of online credit card application and the most up-to-date information protection security systems.
Prepaid & Debit Cards
Prepaid & debit cards are preferable for those who may have low credit scores, or are trying to avoid interest fees and debt. A prepaid card is simply a card in which you add money to it, similar to a gift card, and when the money is spent the card no longer works.
A debit card works along the same lines, with the exception that it pulls money out of your bank account. If the funds are not available, the card will not work unless there is an arrangement with the bank in the form of overdraft protection. These types of credit cards are excellent for those trying to avoid debt and the temptations that can come from credit cards.
Reward Credit Cards
Reward credit cards take many different forms, but they all have one thing in common; they reward you for your purchases. As you make specific purchases, you build up points that you can use toward discounted or free merchandise. The points are usually based upon a percentage of the amount you spend. The purpose of these cards is to allow you to save some money on the things you buy the most. Because the rewards points are an added expense for the credit card provider, some reward credit cards also charge an annual fee.
Here are some of the most common reward credit cards:
- Auto Credit Cards: Gives you rewards for dollars spent on automotive purchases, such as gas, maintenance, car rentals and leases to name only a few. The rewards will give you points toward rebates or gift certificates for more automotive products.
- Charity Credit Cards: This type of reward credit card contributes a certain percentage of your purchases toward a charity that is specifically linked with the credit card. This is becoming more and more popular, thus more charities are becoming linked with credit card providers.
- Dining Credit Cards: This type of credit card offers you reward points for dining out. You will get points for certain restaurants that will turn into rebates and gift certificates to use at specific restaurant chains.
- Entertainment Credit Cards: Entertainment credit cards are one of the most flexible of all reward credit cards. Depending upon the card provider, you may get reward points based upon movie tickets, restaurant checks, airline and hotel stays and even theme park purchases to name only a few.
- Gas Credit Cards: Under present circumstances, anything you can do to save money on gas is welcome. Gas credit cards give you reward points based upon your gas purchases, some even on all purchases, which you may use to get lower gas prices at certain service stations.
- Home Improvement Credit Cards: These types of cards can be specific to home improvement stores such as Home Depot or Lowes, or they can simply offer you points on anything you spend that goes toward home improvement. The rewards for these purchases are rebates or gift certificates for home improvement supplies.
- Hotel Credit Cards: If you are a traveler, hotel credit cards can save you money on hotel stays as well as earn you points toward free stays. They are generally specific to certain hotel chains.
- Points Credit Cards: This is a generic type of reward credit card that gives you points on all purchases that you can use in any fashion you like. Depending upon the credit card provider, you may have a few, or many or unlimited choices of where to use your reward points.
- Sports Credit Cards: This type of credit card offers your reward points based upon your sporting goods purchases. Anything from team sports equipment to outdoor sporting goods may apply. Depending upon the provider, you may have to shop at a specific sporting goods store.
- Travel Credit Cards: Travel credit cards can be very helpful if you travel frequently or travel out of the country. They offer you reward points based upon travel expenses, but also offer international travel services such as acceptability abroad, currency exchange and access to ATM machines abroad.
Secured Credit Cards
Secured credit cards are helpful for those with bad or no credit. A secured credit card gives you a line of credit, but will require some sort of collateral to confirm the credit line and make you eligible for approval.
The collateral is like a security deposit and can be anything of a determinable value. Cash can even be used, as the reason for getting a secured credit card many times is to build credit. The interest rates can be higher and there may be even fees associated with the card. For many people trying to gain or rebuild credit, the cost of a secured card is worth it in the long run.
Student Credit Cards
If you are a student with little or no credit, a student credit card can be the answer to your credit needs. A student credit card is a way to build your credit on your own, without using your parents.
At some point you are going to need to build your own credit and a student credit card is a nice way to start. A student credit card will not offer many of the benefits, such as reward points, high credit limits and lower interest rates, but they can be a good way to get started building your credit while giving you the convenience of having credit at your fingertips when needed.
Unsecured Credit Cards
Unsecured credit cards are any type of credit card in which you do not have to put down collateral for approval, or pay into the card before it can be approved and activated. An unsecured credit card is one that decides your approval based upon your credit history.
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A good credit history and high income will make you eligible for higher credit limits, lower interest rates and more credit card features. Your credit limits, added value features and interest rates will be determined by credit history and income.
See what credit card rates, rewards, and programs you are eligible for by using our free online credit card “chaser” now!