There are countless credit cards to choose from, suitable for all different types of expenses and budgets. Therefore, it is important to understand what aspects of your financial life you want to enhance through the use of a credit card. What are ours!
1. Travel credit cards
Travel credit cards offer services and benefits designed to make your travel easier and cheaper. You can earn points or miles that can be redeemed for travel.
Depending on the annual fee, a travel card may include travel accident insurance, rental car insurance, airport lounge access, an annual statement credit, and benefits like Global Entry or TSA PreCheck for faster passage through airport security. Basically, the more expensive the card, the more extensive the benefits.
2. Introductory APR Credit Cards
Avoiding interest is the purpose of introductory APR credit cards. They offer new cardholders a 0% interest promotional period to help cover interest charges on account transfers or new purchases.
These introductory offers usually last between 9 and 21 months. During this time, no interest will accrue on the credit card balance, giving you a better chance of paying it back.
Introductory APR cards have higher credit requirements than standard credit cards, but they are a great way to finance a large planned purchase or eliminate some existing credit card debt.
3. Transfer credit card
Balance transfer credit cards offer cardholders the opportunity to eliminate some of their credit card debt.
By offering a 0% promotional interest rate for a limited time, balance transfer cards allow you to pay off a balance transferred from another credit card without the interest that would normally accrue.
It’s important to note that most balance transfer credit cards charge a balance transfer fee, usually 3% or 5% of the balance being transferred. There are no balance transfer fee credit cards.
It’s often more cost-effective to pay a balance transfer fee than to pay more in interest charges on a credit card with a higher APR.
4. Rewards credit cards
Rewards credit cards increase your everyday spending by offering rewards for shopping. Some cards have annual fees and no rewards; more expensive cards usually offer higher rewards values.
Depending on the card, you can earn rewards like points or cash back, which can be converted into statement credits, gift cards, travel, etc. Reward values may vary by card.
5. Cash Back Credit Cards
Cash back credit cards are very similar to rewards credit cards, except that you only earn your rewards in cash. Cash back cards have several redemption options, mostly relying on declaring credit or bank deposits.
Reward values also vary. The value of points generally varies, but 1% cash back is equivalent to 1% back on every dollar spent.
Cash back credit cards offer a flat rate on all purchases, or higher rates on certain purchases in bonus categories. Some cash back cards include purchase protection or an introductory APR.
6. Airline credit cards
Airline credit cards are co-branded credit cards, meaning an airline brand partners with a credit card issuer to offer cardholders airline-specific rewards and benefits. These benefits often include priority boarding, in-flight discounts, annual statement credits, international entry or TSA PreCheck application fee credits, etc.
7. Hotel Card
Like airline credit cards, hotel credit cards are credit cards issued by hotel brands. They offer higher rewards at each hotel and may include point bonuses and access to hotel loyalty programs that provide additional conveniences to cardholders.
8. Store Credit Cards
Store or retail credit cards are rewards cards associated with specific stores. They offer rewards and benefits specific to the stores you visit. These may include money back or specific discounts and benefits like two-day shipping or extended warranties. They are usually easier to apply for than regular credit cards, but have more favorable terms, including higher-than-average APRs and additional fees.
Differences from credit card issuers
Just as not all credit cards are the same, so too are the companies that offer them. There are some differences between credit card issuers.
American Express tends to offer a lot of great credit cards. They offer many types of credit card benefits, such as annual credit limits, but charge higher annual fees. Discover and Capital One credit cards don’t charge foreign transaction fees, so they’re good choices for people who travel abroad frequently.
Chase offers several co-branded airline cards and premium business cards through its Ink Business card line. Bank of America, Bank of America, and Citibank are different from their competitors. You’ll need to do your research to find the best credit card and issuer for your needs.
in conclusion
There is a credit card for every credit level and person, it all depends on your needs. You want a credit card that reinforces your spending patterns, not one that changes your spending habits to fit the card.
Think about why you need a credit card. Looking for travel rewards and benefits? Or looking for a way to refund an important expense? Or are you simply looking for a way to improve your credit score or eliminate credit card debt?
No one credit card will cover all expenses, so it’s important to understand how you spend your money and what areas of your financial situation you want to improve.
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