Types of cards - Find Me a Card

Types of cards

(Last updated: September 2021)

Decades ago, only certain affluent individuals were able to gain access to a Diner’s Club or American Express card, which were some of the first kinds of credit cards available for use.

These days, however, there exist enough choices of credit cards to make your head spin.

This article will describe the most popular types of credit cards around.


  1. Summary
  2. Credit cards
  3. Business credit cards
  4. Charge cards
  5. Cards for people with bad credit or no credit history
  6. Which type of card is best for me?


The main types of credit cards:

  • Credit cards for personal use:
    • Rewards credit cards: Earn cash back, points, or airline miles based on how much you spend.
    • Low-interest and balance transfer credit cards: Pay less in interest and other fees if you routinely pay off less than 100% of your balance each month, or if you plan on transferring existing balances from other cards.
    • Store credit cards: Credit cards (e.g., the Best Buy Credit Card) that offer rewards for spending at a particular merchant. (These are typically not recommended.)
  • Business credit cards: For business-related spending.
  • Charge cards: A lot like credit cards, but need to be paid off in full every month.
  • Cards for people with bad credit or no credit history:
    • Secured cards: These require you to make an initial deposit, and then you make purchases against this deposit. Some of them will let you spend a bit more than your deposit amount, and most can help to build your credit score.
    • Prepaid cards: Similar to secured cards, but won't let you exceed your deposit amount nor help you build your credit score.
    • Student cards: Designed for students who are new to the world of credit. They sometimes offer (moderate) rewards such as cash back.

Credit cards

Note: In this section, we'll discuss credit cards for personal use, which is the category that most credit cards you've heard of would fall into. (There are also credit cards for business use, a.k.a. business credit cards, but those will be discussed in a separate section.)

Rewards credit cards

Rewards cards offer consumers incentives to keep spending, and most cards structure the rewards such that you get more when you spend more.

Rewards cards come in myriad categories. For example, travel cards offer frequent flier miles, while cash-back cards give you a cash return on each purchase you make. You may also be able to get a rewards card that offers discounts or incentives when you buy gas, groceries, hotel rooms, and other common purchases.

Types of rewards you can earn based on how much you spend (see chart below for pros and cons of each):

  • Cash back: Cash back credit cards, such as the American Express Blue Cash Preferred credit card, target people who want to earn cash-back benefits and rewards for their purchases.
  • Travel (points or miles): Travel rewards credit cards, such as the CapitalOne Venture Rewards credit card, are aimed at those folks who love to gain points or miles to use for traveling.

Common spending categories in which you’d earn those rewards:

  • Travel (airline, hotels, and/or gas)
  • Other specific spending categories (which sometimes change each quarter)
  • General spending (all spending categories)

Pros and cons of each type




All rewards cards

  • Earn a useful return on your purchases.
  • The chance to do more of the things you love. For example, if you love travel, a rewards card can be a great option.
  • Saving money on things you do regularly.
  • Can encourage you to spend more money than you otherwise would.
  • The rewards are only useful if you actually use them. For example, if you never fly, an airline rewards card would be useless.
  • Typically have high interest rates and fees.

Cash back

  • Unlike points or airline miles, cash back can’t be devalued.
  • With cash back rewards, you won’t be limited to redeeming for pre-determined products or services that the issuer offers.
  • The higher cash back rates (e.g., 5%) are typically only for specific spending categories.
  • There’s often a limit on how much cash back you can earn each year.


  • The dollar value worth of points that you’d earn for certain spending categories can be better than what you’d earn with a cash back card.
  • You’ll sometimes be able to redeem points for special rewards/events/etc. that you can’t find anywhere else
  • Many of the rewards for which you can redeem your points may not appeal to you.
  • Depending on the card, rewards points can expire or have a limit on how many can be earned each year.

Airline miles

  • If you fly a lot, these cards usually offer you a great bang for your buck.
  • Redeeming miles isn’t always straightforward, as there are often blackout dates or other restrictions.

Low-APR and balance transfer credit cards

Low-APR credit cards and balance transfer credit cards, such as the Chase Slate Edge credit card, are great for people seeking out a card to transfer their high-interest credit card balances onto in order to pay off their debts.

Low-APR (i.e., low interest rate) credit cardslow interest cards, as the name implies, have lower interest rates than the average credit card. While it's possible--particularly if you have good credit--to get a card with the interest rate permanently set around 10%, it's more common for low-interest cards to offer a low introductory rate at or near 0%. The introductory rate typically resets to a higher rate after 6-18 months.

Low-fee cards (e.g., for balance transfers) don't charge a fee for you to use them, and offer free balance transfers. Sometimes low-interest cards are also low-fee cards.

Pros and cons of each type




Low-interest cards

  • Make it easier to pay down your credit card balances.
  • These cards frequently allow you to transfer a balance from another card.
  • You'll pay less for your purchases than you would with a typical (higher-rate) card.
  • When the intro period interest rate end, you may end up with a higher rate.
  • You can't typically transfer balances between multiple cards of the same card issuer. For example, if you have a Wells Fargo credit card and switch to a low-rate Wells Fargo card, you wouldn't be able to transfer the balance.

Low-fee cards

  • You'll save money, and your monthly credit card bills will be lower.
  • You can transfer your balance and quickly pay it down without incurring additional expenses.
  • If you don't have a balance to transfer, the card doesn't offer much.
  • It's common for credit cards to come with no fees, so the fact that a card carries no fees is, in and of itself, not necessarily a strong selling point.

Store credit cards

If you’ve been shopping lately, you’ve probably been offered a 10% or greater discount on your purchase by agreeing to sign up for and use that store’s credit card. While these might have an easier approval process, they also tend to come with hefty interest rates.

FAQs about credit cards

What's the difference between cash back, points, and airline miles?

It can be confusing keeping track of travel rewards offers. Some cards offer cash back, some offer points, and some offer miles.

  • Cash back is an actual dollar amount that goes to you as a reward for using the card and paying your balance on time.
  • Miles are rewards that count toward an airline’s frequent flyer program. They don't have a fixed cash value, since each mile’s value depends on the flight for which you redeem it.
  • However, a point does have a fixed value -- typically one cent per point. Points can also be used toward travel purchases.

As for which reward is better for you, it depends on whether you travel first class, business or coach, how often you travel, and the flexibility you're afforded in scheduling your trip.

Why should I use a credit card instead of a debit card?

The top 4 advantages (in no particular order) of using a credit card instead of a debit card are:

  1. Rewards: For most credit cards, you'll earn rewards (e.g., cash back, points, or miles) whenever you make purchases with the card.
  2. Other perks: Most credit cards offer various types of perks that you can use while traveling (e.g., airline upgrades and lounge access) and shopping (e.g., price protection and extended warranties), among other perks.
  3. Security: Credit cards provide better protections against fraud and for stolen cards.
  4. Credit history: Using credit cards (and then paying off your credit card balances) helps build your credit history and increase your credit score.

What's the difference between a rewards credit card and other types of credit cards?

Rewards credit cards are cards that offer cardholders special benefits for using them. Generally, the more you use the card and the longer you keep your account in good shape, the higher the reward. Look for a reward that gives you the most value at stores or with companies with which you already do business. Some cards give cash back for shopping. Others offer travel miles, gift cards, gasoline credit or points toward future purchases.

Business credit cards

Business credit cards are for people who will be making business-related purchases with their card. These cards have the same sorts of sub-categories as other credit cards (e.g., cash back, points, miles, low-APR,e tc.), except that they're intended for business-related spending.

Business credit cards are typically issued in your business' name, and you may be able to get several cards for employees to use. They often have a higher spending limit than traditional cards, and many of them come with additional perks, such as frequent flier miles, thus making them similar to rewards cards.

Pros and cons of business credit cards




Business cards

  • Makes it easy to purchase things for your business and to track expenditures for tax purposes.
  • A higher limit means ready access to credit, which can help you get the supplies you need to keep your business running smoothly.
  • Can have a higher interest rate if your business is new and has limited credit.
  • If you give multiple cards to employees, the employees can run up large credit card bills.
  • The perks might not be beneficial to your business, so make sure to choose a card that offers perks you'll actually use.


Do I need an EIN (Employer Identification Number) in order to apply for a business credit card?

Not necessarily. If your business is a sole proprietorship, you can put down your Social Security number on your credit card application. Keep in mind that if you use your personal information for the account, your personal credit score can be affected.

Can my actions with a business credit card hurt my personal credit score?

Major credit card issuers require that you provide a “personal guarantee” when applying for a business credit card. This guarantee makes you basically a co-signer with your business on the card. In other words, you may be responsible for paying the balance and your credit score may be negatively affected if your company misses payments.

Can a business credit card be used for personal expenses?

There are many instances when a small business owner may wish to use his business card for personal expenses. Let’s say you own a small business and you want to take advantage of your company card’s rewards miles for your family’s vacation. Or maybe you want to get a discount on school supplies for your kids at the office supplier. Yes, you can maximize your benefits, but you also can create an accounting nightmare for you and your business when it comes to tax time. Keep scrupulous records for every purchase on your business account.

Charge cards

Charge cards are a lot like credit cards, but need to be paid in full every month.

Pros and cons of charge cards




Charge cards

  • No preset spending limit.
  • Allow you to build your payment history while minimizing the risk of getting into debt.
  • Large balances on charge cards won’t hurt your credit score.
  • Perks can (depending on how you spend) be better than those of regular credit cards.
  • You must pay off your balance in full every month, or face large penalties.
  • Usually has an annual fee.

The difference between charge cards and credit cards

One difference between the two categories of cards is that charge cards, in general, have no limit – which usually means no stated limit – unlike a standard credit card that boldly prints your $10,000 limit on the statement accompanying the card. After all, even a charge card company wouldn't let just anyone plop a $1 million charge down without blinking an eye or doing some serious credit-worthiness checking.

Secondly, the balances carried on charge cards are due at the end of the current month's billing cycle – and if you don't pay it all in full, you'll experience a large APR. Therefore, charge cards are a great option for keeping your spending and debt load under control, but if you charge more than you can afford to pay off, you can quickly land in credit trouble.

Charge cards are for responsible spenders

The main advantage of the plethora of charge cards offered – most of them by American Express – is that buyers will suffer no interest charges when the full balance owed is paid on time by the due date.

This means the cards are great for those who are able to budget wisely and predict their income and spending habits closely enough to take advantage of the benefits. Those who experience the $35 late payment fees or interest rates that range around 3% – quite a high amount when annualized – may find that they are better off with a standard credit card that doesn't expect payment in full each month.

Sure, in those instances, you might find yourself paying a $320 monthly minimum payment on a Chase Business Ink card that carries a $14,000 balance – and it's not necessarily a wise move to pay the minimum each month – but at least if you're paying on time, your credit isn't being affected negatively.

The ultimate goal is to not end up paying $1,000 in the end for a $50 sweater once the lifetime interest rate is calculated, but to use credit cards to your best advantage.

Cards for people with bad credit or no credit history

Cards for people with bad credit or no credit come in three basic varieties:

  • Secured credit cards: Backed by your initial desposit, can help build your credit score.
  • Prepaid debit cards: Backed by your initial deposit, but won't help build your credit score.
  • Student credit cards: Designed for students.

Secured credit cards

Secured credit cards are backed and “secured” by money you deposit in an account, which acts as collateral in case you fail to make payments. (Note: Some, but not all, secured cards will let you spend a bit more than your deposit amount.)

The purpose of this type of card is to help people who have no credit history (or a bad credit history) build a new track record.

Although many secured cards have very high interest rates, there are some (e.g., Capital One Secured Mastercard) that have more reasonable interest rates.

Prepaid debit cards

Prepaid debit cards are similar to secured cards, but won't let you exceed your deposit amount nor help you build your credit score.

Student credit cards

Student credit cards are designed for students who are new to the world of credit. They sometimes offer (moderate) rewards such as cash back.

Pros and cons of each type




All card types in this category

  • You'll likely have a lower credit limit, which reduces the likelihood of going into debt.
  • Some cards offer additional services, such as pamphlets on credit or a free credit report.
  • You may have several payment options. (Many cards designed for people with low credit allow lots of customization.)
  • You may be able to “graduate” to a traditional credit card after a set period of time -- typically a year.
  • The terms are almost always less favorable than other credit cards, with higher interest rates and late fees. If you have good credit, these cards are almost never your best option.
  • Because of the lower credit limit, you'll have lower spending power.

Secured cards

  • No credit check required.
  • Great for building credit.
  • Typically requires a one-time activation fee or an annual fee.
  • Doesn’t usually come with rewards or other perks.
  • The credit limit is usually pretty low ($300-$1,000).

Prepaid cards

  • You can't spend beyond the limit, so you won't go into debt.
  • Won’t improve your credit.

Student cards

  • Usually easier for students with no credit to get.
  • Can help build your credit score.
  • May come with low introductory rates and fees.
  • The limit is typically low, so you have limited spending power.

Which type of card is best for me?

Are you lost in the sea of credit card options? This section is intended to help you hone in on the right type of card for your needs.

Below are the some of the most common types of credit card users, and the best card type for each of them.

(Note: some of the offer details mentioned below may have changed since this article was written, so you'll want to double-check the offer details on the credit card issuer's website before applying.)



Your Objective

Your Ideal Type of Card

The All-Around Big Spender

Big spenders put lots of money on their credit cards, and pay all or most of the balance off every month.

They could be wealthy, but it's just as likely that they simply prefer paying with a credit card and reaping its benefits.

You need a card that won't limit your spending and that offers plenty of rewards for your stellar credit history and regular use of credit.

The right card is primarily dependent on what you like to do and how you like to be rewarded.

Travel aficionados may love cards that give miles, but these cards are useless for homebodies. Spend some time exploring your card options, and consider consulting with a financial planner.

If you're looking for a good place to start, here are some cards worth checking out:

  • Chase Freedom Flex: 5% cash back on travel purchased through Chase and on categories that rotate each quarter, 3% on dining, and 1% on everything else.
  • Amex Blue Cash Preferred: 6% cash back on groceries and streaming, 3% on gas and transit, and 1% on everything else. (Has a $95 annual fee.)
  • Fidelity Investment Rewards: 2% cash back on all purchases.

And some higher-end options:

  • Citi Premier: A good card for spending on food and travel (3x points on restaurants, groceries, gas, airlines, and hotels), with an 80K points signup bonus, but also a $95 annual fee.
  • Amex Platinum:high annual fee ($695), but excellent travel perks (5x on travel, annual $200 Uber credit, and many hotel perks) and a 125K points welcome bonus.

The Traveler

Much like all-around big spenders, travelers put a lot of money on their credit cards, and pay all or most of the balance off every month. What sets them apart, though, is just as the name implies -- travelers spend more on travel.

You need a card that offers great rewards on all the money you’re already spending on travel.

Obviously, you’ll want a card that offers you the best rewards in the form of travel perks and/or based on travel spending.

Some cards worth checking out:

  • Capital One Venture Rewards: A good card for earning airline miles, with a 60K miles early spend bonus and 2x miles on all purchases, but also a $95 annual fee.
  • Amex Delta SkyMiles Gold: A good card for Delta frequent flyers, with a welcome bonus of $200 (after making a purchase w/in 3 months) plus 70K miles (after spending $2K within 3 months), but with a $99 annual fee.
  • Chase United Explorer: A decent card for frequent United flyers, with 2x miles on United purchases, restaurants, and hotels, as well as a 60K miles signup bonus, but also a $95 annual fee.

And a higher-end option:

  • Citi Premier: A good card for spending on food and travel (3x points on restaurants, groceries, gas, airlines, and hotels), with an 80K points signup bonus, but also a $95 annual fee.

The Cautious Credit User

Cautious credit users generally want to be extra careful with their spending.

They don't like being taken advantage of, and they loathe high fees and bait-and-switch offers.

You need a card that rewards your good credit with a low interest rate, minimal fees, and excellent customer service.

You may also need a card that makes it easier to pay down the debts you already have.

Any card with a 0% introductory rate is ideal because it gives you a chance to pay down debt without accruing hefty interest fees in the meantime.

Some cards worth checking out:

  • Citi Simplicity: Offers 0% interest for the first 18 months.
  • Chase Freedom Flex: Pairs two key benefits: 0% interest for the first 15 months, and 1-5% cash back rewards on purchases.

The Credit Newbie

Most credit newbies are young, and many are college students.

Credit newbies haven't had a credit card before, which means they have no credit score and don't have much experience paying bills or tracking expenses.

You'll need to learn how credit works without taking on unnecessary risks.

You'll also need to build your credit score.

You need a card with a relatively low maximum balance, as this will protect you from getting deep into debt.

Some cards worth checking out:

  • Discover It Student Cash Back: A good no annual fee cash back card for students, with 5% cash back in rotating categories (1% for everything else).
  • Capital One Journey Student Rewards: A good cash back card (1-1.25%) for students who don't have many other options due to their thin credit history, with no annual fee, but also no early spend bonus.

The Reformed Credit Junkie

Reformed credit junkies are people who are not new to the world of credit, but their previous credit adventures had ended poorly.

Maybe they ran up huge credit card balances in college, or perhaps lost their job and couldn't afford to pay offer their debts.

No matter the reason for their credit challenges, though, they're now ready to start fresh with a new card.

If you've had problems with credit cards before, your goals should be to find a card for which you can actually be approved, and start rebuilding your credit score.

If you already have bad credit, a secured card isn't just your best option -- it's probably your only one.

With such a card, you'll make a deposit that serves as your line of credit. Most secured cards allow users to “graduate” to a regular credit card after a set period of time – usually a year.

The annual fees on these cards vary significantly, so it's wise to research the card with the lowest fees.

Some cards worth checking out:

  • Bank of America Cash Rewards Secured: A great choice for people who have a poor credit rating, which has no annual fee and comes with 3% cash back on a category of your choice, 2% on groceries and wholesale clubs, and 1% on everything else.
  • Discover It Secured:secured card (requiring a deposit of at least $200) with decent cash back rewards (2% on restaurants and gas; doubled in the first year) and no annual fee.
  • Surge Secured Mastercard:secured card offering 1% cash back on all purchases, with a $69 annual fee, for people with bad credit scores or no credit history.