You don’t need to know everything about credit cards to find the best fit for your needs.
Rewards credit cards are best for everyday purchases, earning you cash back or points on your spending.
Travel credit cards are a solid fit for frequent travelers and include co-branded airline and hotel cards.
For those new to credit, a secured or student credit card can be a useful tool to build your credit score.
With the dizzying array of credit cards on the market, it’s easy to find yourself overwhelmed by the number of choices and credit card deals out there when comparing your options. But you don’t need to learn everything about every single card on the market. Simply figure out which type of credit card might work for your needs, and then focus on finding the right fit for your lifestyle and budget.
So, how do you choose the best credit card? Learn about the different types of credit cards and how each might work for your spending and financial goals.
Rewards credit cards
Rewards credit cards typically give you points or cash back based on a percentage of your spending. Some offer bonus points in popular categories like groceries, gas and dining out.
Rewards cards also tend to offer a variety of ways to redeem your points, including options for statement credits, gift cards or merchandise. By using a rewards credit card to cover your basic purchases, like groceries and household supplies, you can earn cash back and travel rewards for purchases you need to make anyway. This makes them a useful option for everyday expenses when you know you can pay off your card right away.
Some of the best rewards credit card for different types of uses include:
Cash back credit cards
Cash back credit cards make it easy for you to earn cash back or statement credits on your spending, with rewards structures that vary by card. Some options in this category offer a flat rate on your spending, while others offer bonus points in specific categories like dining or travel. Some even offer bonus rewards in rotating categories each quarter, as well as a flat rate of rewards on all non-bonus purchases.
Many cash back credit cards come with no annual fee, although those with more generous bonus offers and rewards schemes charge modest annual fees — usually under $100 — that you can typically make up for with use.
If you tend to spend more in categories like groceries or dining, look for a card offering bonus categories versus a flat-rate card, which is ideal for those with varied spending.
Some of the best cash back credit card offers include:
Travel credit cards
Travel credit cards offer you the opportunity to earn rewards designed for frequent travel, whether it’s earning flexible credits you can use toward any travel purchase or points you can transfer to airline or hotel programs. Some travel credit cards also let you earn points within a specific program, such as a frequent flyer program or hotel loyalty program.
If you often travel for business or pleasure, keep your eye out for luxury travel credit cards that offer perks like airport lounge access, annual travel credits and credits for Global Entry or TSA PreCheck. You don’t even have to leave town to start earning points and miles that can make your next trip more affordable — many of the best travel rewards cards let you earn these perks through everyday purchases.
Some of the best travel credit card offers include:
Business credit cards
Business credit cards allow cardholders to keep their personal and business expenses separate while they earn rewards on all their business spending. Like personal rewards cards, business credit cards can be cash back credit cards, general rewards credit cards, travel credit cards or even secured credit cards. You must own a business or income-producing activity to qualify for a business credit card.
In general, a strong business credit card helps you benefit from your everyday spending and makes running your business easier. Look for a credit card with a generous rewards program, expense tracking abilities and features that can help boost your bottom line. Some business credit cards offer a flat rewards rate for all of your purchases, whereas other cards reward common business expenses, like travel or internet services, at higher rates. When it comes to redeeming your rewards, business credit cards generally let you exchange your rewards for either cash back or airline miles.
Some of the best business credit card offers include:
Student credit cards
Student credit cards are like “starter” credit cards designed for young people with a limited or no credit history. Application requirements for these cards aren’t as strict, making approval easier than a traditional credit card. Most student credit cards don’t charge an annual fee, and many offer rewards for each dollar you spend or even bonus perks for good grades. If used responsibly, signing up for a student credit card can help young people build their credit and establish healthy financial habits.
Some of the best student credit card offers include
Secured credit cards
Most credit cards are unsecured, meaning you don’t have to put down any money upfront for collateral. With secured credit cards, on the other hand, you’re required to put down a cash deposit in order to secure a small line of credit, usually for a similar amount. For example, you might sign up for a secured credit card and put down a $500 initial deposit in order to receive a $500 line of credit.
While putting down collateral may not seem ideal, secured credit cards are the easiest type of credit card to get approved for, so they are often helpful when you need to build credit from scratch or want to repair your credit after a financial hurdle.
See some of the best secured credit card offers, including:
Co-branded credit cards
Co-branded credit cards are store or brand credit cards offered through traditional card issuers like Chase, Citi or American Express. These cards include airline credit cards that let you earn miles within a specific frequent flyer program and hotel credit cards that let you earn points within a hotel loyalty program. Some co-branded credit cards also partner with retail stores, although you can typically use them for non-store purchases as well.
Generally, the rewards offered by co-branded credit cards are limited to one brand, but rewards are solid and, in many cases, the value of rewards and perks — like free hotel nights — end up being worth more than cash back.
Some of the best co-branded airline credit card and hotel credit card offers include:
Store credit cards
Store credit cards are offered through retail stores to let consumers charge their purchases and pay them off over time. Store credit cards are generally used only at the specific store that offers them, although some store credit cards can be used within a family of stores.
Generally, store-branded credit cards have higher interest rates than general-purpose cards, and they are often more likely to charge deferred interest. Deferred interest means you’ll get a low or 0 percent introductory rate for a period of time, but if you don’t pay the full amount off within that time, you’re charged retroactively for the interest. That said, if you can pay off your store credit card on time, you may be able to take advantage of useful perks and rewards programs.
Top store credit cards include:
The bottom line
You’ll find different types of credit cards on the market, and choosing the best credit card for yourself depends on your specific needs, your credit situation and even what stage of life you’re in. Even more, the timing of your credit card selection can also affect which option might be best. The card best suited for you is the one that offers a combination of rewards, benefits, fees and other features that can help improve your financial situation.
Start with Bankrate’s CardMatch tool to narrow down your choices, and learn more about basic credit card terms to familiarize yourself with the different features and details of a card, as well as the pros and cons of having a credit card.
*Issuer-required disclosure statement
Information about the Deserve® EDU Mastercard for Students, Petal® 2 “Cash Back, No Fees” Visa® Credit Card, Costco Anywhere Visa® Card by Citi and Capital One® Walmart Rewards® Card has been collected independently by Bankrate. Card details have not been reviewed or approved by the card issuer.
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