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Which Type of Personal Credit Card is Right for You?

By: Michael Esparza

There are many types of personal credit cards, each with different features and benefits. Here are some of the most common types of personal credit cards:

Rewards credit cards: These cards let you earn points, miles, or cash back on your purchases. You can redeem your rewards for various things, such as travel, merchandise, gift cards, or statement credits. Some rewards cards have specific categories that earn more rewards, such as dining, travel, or groceries. Others have a flat rate of rewards for all purchases.

Travel credit cards: These are a type of rewards card that focuses on travel-related benefits. Travel credit cards often offer sign-up bonuses, travel credits, airport lounge access, or other perks for frequent travelers. You can also earn and redeem points or miles for flights, hotels, car rentals, or other travel expenses. Some travel credit cards have no foreign transaction fees, which can save you money when you use your card abroad.

Cash back credit cards: These are a type of rewards card that gives you cash back on your purchases. Cash-back credit cards usually have a simple and straightforward rewards system. You can either get a fixed percentage of cash back on all purchases, or a higher percentage on certain categories that rotate every quarter. You can redeem your cash back as a statement credit, a direct deposit, or a gift card.

Starter credit cards: These are cards that are designed for people who have little or no credit history. Starter credit cards can help you build or improve your credit score by reporting your payment history to the credit bureaus. There are three main types of starter credit cards: secured, unsecured, and student. Secured cards require a security deposit that acts as your credit limit. Unsecured cards do not require a deposit but may have higher interest rates or fees. Student cards are for college students who want to establish their credit while earning rewards or other benefits.

Student credit cards: Student credit cards are designed for students who are just starting to
build their credit history. They typically have lower credit limits and interest rates than other
types of credit cards.

Store credit cards: Store credit cards can be used to make purchases at a specific store or group
of stores. They often offer discounts or rewards on purchases made at the store.

These are some of the most common types of personal credit cards, but there are also other types that may suit your needs better. For example, there are premium credit cards that offer luxury benefits and services, balance transfer credit cards that let you move your debt from one card to another with a lower interest rate, co-branded credit cards that partner with specific brands or retailers, and store credit cards that offer discounts or rewards at specific stores.

Here are some additional factors to consider when choosing a personal credit card:

  • Annual fee: Some credit cards have an annual fee, while others do not. If you choose a credit card with an annual fee, make sure that the benefits of the card outweigh the cost of the fee.
  • Interest rate: The interest rate is the amount of interest you will be charged on any unpaid balance. If you carry a balance on your credit card, it is important to choose a card with a low-interest rate.
  • Rewards program: If you are interested in earning rewards, make sure to compare the rewards programs of different credit cards. Some cards offer better rewards than others, depending on your spending habits.
  • Other benefits: Many credit cards offer additional benefits, such as travel insurance, purchase protection, and extended warranties. Consider which benefits are important to you when choosing a credit card.

Before you apply for any type of personal credit card, you should compare the features and benefits of different options and choose the one that matches your spending habits and financial goals. You should also check your credit score and report to see if you qualify for the card, you want and to avoid any errors or fraud. Finally, you should always use your personal credit card responsibly by paying your bills on time and in full every month, keeping your balance low, and avoiding unnecessary fees or interest charges.