How Many Different Types of Cards Are There?
Starter Cards: For People With Bad Credit or No Credit HistoryStarter cards are a general class of credit cards with the following features:
- Easy to qualify for: can qualify if you are low income, a student, no credit history, or bad credit
- No or low annual fee
- Few, if any, benefits such as cash back or travel rewards
No FeeNo fee cards are nice for people who don’t want to pay for the use of a credit card. Most starter cards do not have an annual fee. But not all cards without an annual fee are starter cards. Many cards with no fee have additional benefits and requirements to qualify (such as proof of income or credit history).
Cash BackThese are one of the most common types of cards available. Why? Because you get paid a percentage of your credit card balance back (usually applied to your balance by subtracting what you owe). If you don’t end up carrying a balance and charging interest, it’s like getting a discount everywhere you go. It’s like getting paid to shop. No wonder they’re so popular!
Travel RewardsAnother super popular benefit, travel rewards give you points (often branded as ‘miles’) toward a future air travel purchase. Many people are able to earn enough points to pay for a trip to a faraway destination, possibly enough to cover a vacation.
Low Interest RateSome cards offer an interest rate that’s much lower than the industry average. Typical credit cards charge 19.99% APR on a balance, with a 21-day grace period after your bill date to pay your card without accruing interest. These low interest credit cards charge much lower APRs. 13.99%, 11.99%, even 9.99% can be found.
Special Benefits: Offers and ConciergeSome cards offer benefits that can’t easily be offered by other cards. American Express is famous for offering cards with amazing concierge benefits and access to special offers. Concierge benefits are often used with travel. These benefits include renting a car for you, booking your hotel, and helping you with many of the little things.
Ways to get the best credit card
- Check your credit
- Identify which type of credit card you need
- Narrow your choices by asking the right questions
- Apply for the card that offers you the highest overall value
Check your CreditCheck for the credit card that gives you good offers by checking your credit score. If your score is good, the chance of approving your cards will be higher. You can also receive good rewards and benefits. There are a few ways to check your score.
- Many credit card issuers give cardholders free FICO scores.
- The three major credit bureaus (Experian, Equifax, and TransUnion) sell credit-related services to consumers.
Identify the type of credit card you needThere are three types of credit cards:
- Help you improve your credit when it’s limited or damaged.
- Save you money on interest.
- Earn rewards.
- If you want to rebuild your credit then choose a student card or secured credit card.
- If you want to save on interest then choose low-interest, 0% APR (Annual Percentage Rate), or balance transfer card.
- If you want to earn rewards then choose rewards, travel, or cash back credit card.
Choose the Right QuestionsFor student and secured credit cards
- Will this card help to build your credit?
- How much does it cost to open an account, including the annual fee?
- Is a better card available
- Is it possible to upgrade to a better card later?
- What is the duration of the 0% APR period, as well as the continuous interest APR?
- What is the card’s balance transfer policy?
- Does the card offer rewards?
- In what ways your money can be spent?
- Is there any complications with this credit card?
- How long will it take for receiving rewards, and how much will they be worth?
Apply for the card that offers you the highest overall valueReducing your choices will be the easiest part, but deciding between two or three similar cards will be quite difficult. If you have found out the best card in the previous stage then you can skip off this step. For student and secured cards
- Credit limit automatically increases
- Interest paid on your deposit
- Debt payoff planner
- No late fees or penalty APR
- Lower required spend
- No expiration date on rewards
How To Choose A Credit CardIt’s actually quite simple. Rank the following in order of importance:
- Easy to Qualify
- No Fee
- Cash Back
- Travel Rewards
- Special Offers
- Low Interest Rate
Then, choose a card that reflects your top 3 choices. Ask your bank what kind of cards they have available that fit your criteria.Need help avoiding credit card debt? Learn all about credit card debt, including how to avoid it and what to do about it!