In a world, a rapid array of credit card types are marketed to consumers, it is quite easy to become overwhelmed by the total number of choices. You do not need to learn everything about a single credit card on the market.
However, you just need is figure out which type of credit card would work for your needs. After you can now focus your mental energy on researching which of those are the exact fit.
Different Types of Credit Card
To know which type of credit card would serve you best, you will need to consider the different types of credit cards and how each type of card might work for your spending and your goals. Below are different types of Cards
- Cash Back credit: This makes it easy for you to gain cashback or statement credits on your spending, though how rewards are doled out varies from card to card. So many cashback cards come with no annual fee as well, but some with huge bonus offers and rewards schemes charge annual fees on the modest side which is usually under $200.
- Travel Credit Cards
This type of credit card gives you the chance to earn rewards that are equipped specifically for travel. Even if it means earning flexible travel credits you can use toward any travel purchase. Or even points you can transfer to airline or hotel programs. Travel credit cards also allow you to earn points within a specific program, like a frequent flyer program or hotel loyalty program.
- Business cards
This particular card allows cardholders to keep their personal and business expenses separate while they gain rewards on all their business spending. However, it can also be cashback cards, general rewards credit cards, travel credit cards, and also secured credit cards.
Other Types of Credit Cards
- Store Credit cards
Store credit cards are offered through retail stores to allow consumers to charge their purchases and pay them off over time. These cards are usually used within the exact store that offers them. But some store cards can be used within a specific family of stores.
- Co-branded credit cards
Co-branded credit cards are store or brand credit cards offered through traditional card issuers such as Chase, Citi, or American Express.
These can include airline credit cards that allow you to earn miles within a specific frequent flyer program or hotel cards that allow you to gain points within a hotel loyalty program.
- Secured credit cards
Most credit cards are unsecured, which simply means you do not have to put down any collateral. So with a secured card, you are to put down a cash deposit in order to secure a very small line of credit which is usually for a similar amount.
How to Choose the Right Type of Credit Card
Here are ways to choose the right type of credit card for you.
- Check your credit score
You will have to check your credit score to see your stand first of all. Excellent credit will provide the way to qualify for any card you want. Most especially the top travel and rewards credit. So to give your credit score a boost, try lowering your card score boost, try lowering your card utilization, pay your bills on time. And also consider having a mix of different types of credit
- Write Down your goals
You will need to figure out what you hope to achieve with a new card before signing up for a new credit card. However, there is no right or wrong goal to achieve with different cards. But knowing so well what you hope to accomplish from your new card can assist you to narrow down the best options for you.
- Assess your Debt
If you have a huge interest credit card debt or debt from other loans. Then you can consider a balance transfer card that lets you consolidate your debts during an introductory APR period. But if you do not have any debt; And you plan to stay that way, you can decide to focus on other card benefits, just like rewards or cashback.
Other Steps on How to choose the Right Credit Cards
- Compare Rewards Program
If your goal is earning rewards, then make sure you know which card delivers your appropriate rewards. Which include cashback, flexible travel rewards, or even credit points you can transfer to airlines and hotels. You will want to select a card either way that allows you to gain rewards in the categories where you already spend the most.
- Search for fees and other carrying costs
Now finally, you have to make sure to compare card fees and long-term carrying costs. You should not only consider your card interest rate. But also you should watch out for annual fees, late fees, application fees, over-the-limit. Also some other charges you might need to pay.