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Different credit cards serve different aims, so it's good to compare credit card types based on their purpose and features. Finding the right card often depends on your credit history, spending habits and financial goals. Here are seven different types of credit cards to evaluate.
7 Different Types of Credit Cards
| Key Features | Pros | Cons | Best For | |
|---|---|---|---|---|
| Secured credit cards | Require a refundable security deposit | Easier to qualify for with limited credit | Upfront deposit required | Building or rebuilding credit |
| Rewards credit cards | Earn cash back, points or miles on purchases | Earn rewards on spending | Interest may outweigh rewards | Earning rewards |
| Low-interest-rate credit cards | Offer a 0% introductory or relatively low ongoing APR | Lower interest charges on carried balances | Introductory rates are temporary | Financing large purchases or paying down debt |
| Student credit cards | Designed for college students building credit | May be easier to qualify for with limited credit | May offer limited rewards and benefits | Establishing credit |
| Store credit cards | Offer discounts or rewards at a specific store | Retailer-specific discounts and benefits | May have limited use and high APRs | Earning rewards on frequently shopped brands |
| Co-branded credit cards | Offer rewards and benefits on a specific brand | Brand-specific rewards and benefits | Rewards may have lower redemption value outside the brand | Brand-specific rewards and perks |
| Business credit cards | Offer rewards and features for business purchases | Business-related benefits | Some consumer protections may not apply | Managing business expenses |
1. Secured Credit Cards
How secured cards work: Secured credit cards require a refundable security deposit that often becomes your credit limit. The deposit lowers the card issuer's risk and makes it easier to get approved if you have no credit history, limited credit experience or poor credit.
The deposit is usually refundable when you close the account in good standing or qualify to upgrade to an unsecured credit card.
When used responsibly, a secured credit card can be an effective tool for building or rebuilding your credit, provided the card is reported to the three major credit bureaus: Experian, TransUnion and Equifax.
This type of credit card is best for:
- People who need to establish or rebuild their credit
- People who've recently been denied a credit card because of their credit history
Learn more: What Is a Secured Credit Card?
2. Rewards Credit Cards
How rewards cards work: Rewards credit cards allow you to earn cash back, points or miles on your purchases. Depending on your card's terms, you may earn the same amount of rewards on all purchases or receive higher rewards in specific categories, like dining, groceries or gas. Over time, your rewards accumulate and can be redeemed for cash back, travel, gift cards or other options depending on the card's rewards program.
Many rewards cards offer an intro bonus, also called a welcome bonus. You may earn extra rewards if you meet a minimum spending requirement within a certain period after opening your account.
Rewards accumulate over time and you can redeem them for a variety of options depending on your card's rewards program. Typically, only purchases earn rewards, while balance transfers and cash advances do not.
This type of credit card is best for:
- People who want to earn rewards on everyday purchases
- People who pay their balance in full each month
Learn more: Are Rewards Credit Cards Worth It?
Cash Back Credit Cards
How cash back cards work: Cash back credit cards allow you to earn a percentage of eligible purchases—and sometimes payments—as cash rewards. Depending on the card, you can redeem rewards as a statement credit, gift card, check or direct deposit.
The way you earn rewards varies by credit card. Some cards offer a flat rate on all purchases, while others offer bonus rewards in specific categories. Bonus categories may be fixed or rotate periodically, depending on the card.
This type of credit card is best for:
- People who want to earn cash on their everyday spending
- People who spend more in specific categories, like gas or dining
- Those who want a simple rewards program
Learn more: What Is a Flat-Rate Rewards Card?
Travel Credit Cards
How travel cards work: With a travel credit card, you can earn points or miles that can be redeemed for flights, hotel stays, rental cars and other travel-related expenses. Depending on the card, you may be able to transfer your rewards to other loyalty programs.
Many travel credit cards offer higher rewards on travel purchases. Some also offer valuable travel benefits like airport lounge access, reimbursement for expedited security fees and trip insurance. These perks enhance your travel experience while helping you save money.
This type of credit card is best for:
- Frequent travelers who want to earn points or miles on travel purchases
- People who can get significant value from travel rewards
- People who can benefit from travel-related perks and protections
Learn more: Are Travel Credit Cards Worth It?
3. Low-Interest Credit Cards
How low-interest cards work: Low-interest credit cards offer a relatively low ongoing annual percentage rate (APR), which can lower interest charges if you carry a balance. These cards may offer fewer rewards and perks compared to rewards credit cards.
While paying your balance in full each month is generally best, a credit card with a low interest rate is useful if you occasionally need to carry balance.
This type of credit card is best for:
- People who may need to carry a balance
- People who want to minimize interest charges
- Those with good to excellent credit who may qualify for the lowest rate
Learn more: What Are Low-Interest Credit Cards?
Balance Transfer Credit Cards
How balance transfer cards work: Balance transfer credit cards offer a promotional APR on balances transferred from other credit cards, typically for a limited period after opening the account. Most cards charge a balance transfer fee, which can be either a flat fee or a percentage of the transferred amount.
A balance transfer card can help you save money on interest while paying down debt. Paying off the balance transferred during the promotional period is key to maximizing your interest savings. After that, the card's regular APR will usually apply to any remaining balance.
This type of credit card is best for:
- People who want to pay off higher-interest credit card debt
- People who can pay off a transferred balance during the promotional period
Learn more: What Are Balance Transfer Credit Cards?
0% Intro APR Credit Cards
How 0% intro APR cards work: A 0% intro APR credit card offers an initial interest-free period where you won't be charged interest on eligible balance transfers, purchases or both. Promotional periods typically last anywhere from 12 to 21 months.
You're still responsible for minimum payments during the promotional period. Once the introductory period ends, the card's standard APR will apply to any remaining balance and new purchases.
This type of credit card is best for:
- People who want to spread out payments on a large purchase
- Those looking to pay down higher-interest credit card debt
Learn more: Should I Pay Off My Credit Card in Full or Over Time?
4. Student Credit Cards
How student cards work: Student credit cards offer features and benefits that cater to college students. They're typically easier for students to get approved for, but may require proof of enrollment in a college or university. Student credit cards may have lower credit limits, but many offer rewards and perks geared toward student spending.
This type of credit card is best for:
- College students who want to establish or build credit while in school
- Students who can't qualify for other credit cards
Learn more: How Is a Student Credit Card Different From a Regular Credit Card?
5. Store Credit Cards
How store cards work: Store credit cards are offered in partnership with retail stores and typically offer rewards and benefits tailored to shopping with that particular retailer.
Store cards may offer cardholder discounts, special financing or higher rewards on purchases from the retailer for cardholders. If a card offers deferred-interest financing, you'll need to pay the full promotional balance by the end of the promotional period to avoid being charged accrued interest on the entire purchase.
This type of credit card is best for:
- Frequent shoppers at specific retailers
- People who need to build or rebuild their credit
6. Co-Branded Credit Cards
How co-branded cards work: Co-branded credit cards are a partnership between a credit card issuer and a specific brand, such as an airline, hotel chain or retail store. Unlike some closed-loop store credit cards, co-branded credit cards can be used anywhere when they're associated with a major processing network.
These credit cards typically offer rewards and benefits tied to the affiliated brand, often offering higher rewards on purchases made with that brand. Redemption options are typically centered around the brand's loyalty program.
This type of credit card is best for:
- People who frequently shop with specific brands or retailers
- People who want perks, discounts or loyalty status with their favorite brands
Hotel Credit Cards
How hotel cards work: A hotel credit card offers rewards and perks on hotel stays with a specific hotel chain. You usually earn points on all purchases and higher points on stays with the affiliated hotel.
Depending on the card, benefits may include complimentary-night awards, room upgrades, late checkout or automatic elite status. Rewards can be redeemed for hotel stays and other loyalty program options.
This type of credit card is best for:
- People who frequently stay at a particular hotel chain
- People who want access to hotel perks like free nights and room upgrades
Airline Credit Cards
How airline cards work: Airline credit cards offer rewards and benefits that are tied to a specific airline. Purchases earn miles for every dollar spent, with more miles offered on purchases made directly with the airline.
Depending on the card, benefits may include priority boarding, waived baggage fees and discounts on in-flight purchases. Miles earned can be redeemed for flights and other airline perks like airport lounge access and seat upgrades. Some cards may help you earn miles toward elite status.
This type of credit card is best for:
- Frequent fliers who are loyal to a specific airline
- People who want to access airline-specific perks like free checked bags and priority boarding
- Frequent fliers who want to reach elite status sooner
Learn more: Benefits to Look for in an Airline Credit Card
7. Business Credit Cards
How business cards work: Business credit cards are designed for business owners and can help with separating business and personal expenses. Features may include higher credit limits, employee cards and expense management tools. Rewards categories typically align with common business purchases, such as online advertising, office supplies and travel.
This type of credit card is best for:
- Small business owners want to separate and track business expenses
- Business owners who want to manage employee spending
How to Choose the Right Credit Card
With so many credit cards available, choosing the right one can feel overwhelming. Understanding what to look for can make the selection process easier.
- Know your credit score. Your credit score can influence which credit cards you may qualify for as well as the interest rate and credit limit you receive. Checking your credit scores before applying can help you focus on cards that better fit your credit profile.
- Determine what you're looking for. If you want to build or rebuild credit, consider a secured or student credit card. If earning rewards is a priority, decide whether cash back, flexible points or travel rewards is the best fit for your spending habits.
- Look for rewards and benefits. Perks like a welcome bonus, intro APR, travel benefits and purchase protection can add value to a credit card. If you're comparing similar cards, these features may help you determine which one is the better fit.
- Compare fees and APRs. Look beyond the rewards program and consider the interest rate, annual fee and other potential fees. Compare the value of the card benefits with fees to determine whether the card is worth it to you.
- Read the terms. Check the credit card's fine print to understand requirements, spending thresholds or restrictions tied to any offers, rewards and features.
Ultimately, you should choose a card with features, fees and requirements that align with your actual spending and credit profile.
Tip: Many credit card issuers allow you to prequalify to check whether you're likely to qualify for a credit card. This saves time on applications and prevents unnecessary hard inquiries.
Frequently Asked Questions
How Many Types of Credit Cards Are There?
There's no universally accepted number of credit card types. Credit cards can be categories in several ways based on their features or purpose. For example, rewards credit cards can be further divided into cash-back and travel credit cards. A credit card can also fall into more than one category—a student credit card may also offer rewards.
How Many Credit Cards Should I Have?
There's no set number of credit cards you should have. It's a good idea to have at least one credit card to help you build and maintain a healthy credit score. Beyond that, the number of credit cards you should have depends on your finances, spending habits and ability to manage multiple accounts.
How Do I Apply for a Credit Card?
Once you've chosen a credit card, you can apply online, over the phone or in person at a bank or credit union. You'll need to provide some personal and financial information, such as your name, address, Social Security number, income and monthly housing payment.
If you're a student applying for a student credit card, you may need to provide proof of school enrollment. Applicants under age 21 may also be required to show proof of income or apply with a cosigner.
After you submit your application, you may receive an immediate decision, or the card issuer may request additional information or notify you of its decision by mail or email.
What Is a Charge Card?
A charge card is a type of payment card that requires you to pay the full balance at the end of each billing cycle. Because you're not allowed to make minimum payments or carry a balance from month to month, late or missed payments carry stiff penalties and other consequences.
The Bottom Line
Your credit score impacts the types of credit cards you qualify for. If you have fair or poor credit, you may have fewer options available. If you're not sure what your options are, you can use Experian's credit card comparison platform to be matched with cards that best fit your credit profile.