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Which Type of Credit Card Is Right for You

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A Economist by degree and a professional freelance writer adept in producing content in Finance and Economics.

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There are plenty of credit cards available on market. Every credit card has its perks so figuring out the right credit card is overwhelming. It’s best to consider your goals before choosing the best credit card for you. Randomly choosing a credit card without knowing its perks will not fulfil your financial goals.

Read on to know different types of credit cards and which one is best for you.

Major types of credit cards:

You will find dozens of credit cards on market. Here you will find out 8 most common types of credit cards.

Rewards credit cards:

These cards provide rewards on everyday transactions. You can earn points or cash back on your spending. You can also earn bonus points in common categories like gas, groceries, dining out, travel.

Cash back credit cards:

These credit cards offer cash back or points on your spending. Some cards in this category offer a flat rate of reward while others offer bonus rewards in specific categories like travel, groceries, dining. It's good for people searching for a card for everyday spending.

0% APR credit cards and low-interest credit cards:

0% APR cards don't charge interest during the introductory offer phase. Whenever a person purchases such type of card, they will not pay interest during a few initial months. Good for people to pay down their debts without interest.

Some cards also offer lower interest rate not only during the introductory period but overall.

Student credit cards:

These cards are good for students and people with poor credit history. Student cards are easy to get approved. These cards offer rewards. If used responsibly can help to build credit.

Secured credit cards:

Like student credit cards, these cards are easy to get approved. However, secured credit cards require a deposit. You will get a credit limit equal to your deposit. People new to credit or people having poor credit history use these cards to build credit.

Balance transfer credit cards:

These cards are a good option if you want to pay off your debt with zero or with a minimal interest rate. Balance transfer cards offer the facility of transferring your debt from a high-interest card to a card with a lower or zero interest rate. If you transfer the balance to a card charging a zero interest rate so you can get a break from the interest rate while paying down your debts.

Travel credit cards:

If you like travelling, use this card to earn travelling rewards. These cards offer points and miles with every purchase which you can redeem for flights or hotels. By using the right travel card you can enjoy free travel with a good experience.

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Business credit cards:

Business credit cards are used for business-related transactions. Businesses use these cards to better future borrowing terms. Any type of business can use this type of credit card. You can redeem rewards by cash back or airline miles and can earn rewards from every business transaction.

Things to consider before choosing a card:

  • Before applying for any credit card, first, check your credit score. You can check your credit report through www.annualcreditreport.com website.
  • Before applying for any credit card, consider your goals then narrow down your choice according to your goals.
  • Compare the credit card fees and long term carrying charges. Focus on the interest rate, annual fees, late fees, over-the-limit fees and other charges you may pay.

How to choose a right credit card:

Credit holders should consider their financial goals before choosing an ideal credit card for them. Here you can check different credit cards options according to your goals

Want to build credit:

If you have a poor credit history or you are new to credit so using a credit building card should be your top priority. Credit building cards are easy to get approved and don't require a good to great credit score for approval.

For credit building use secured credit cards, standard cards,

or student cards.

If you want to pay off your debts or finance your purchase with a lower interest rate:

If you want to pay off your debts without an interest rate so try a balance transfer credit card that offers 0% introductory rate. During 0% introductory phase cardholders don't pay interest to the issuer. So you can benefit from this offer by transferring your debt from a high-interest rate card to a card with 0% intro offer. Some cards offer 0% intro period up to 21 months.

If you don't want to pay interest on your large purchase so use a card with 0% APR on purchases. These cards are good if you want to pay down your payments without interest rate. The issuer will not charge you interest on your purchase during 0% intro period on your purchase. Best cards offer 0% APR on purchase for 15 to 20 months right now.

When your goal is to carry a balance from months to months:

If you want to carry a balance for a longer time, consider cards with lower APR. Some credit cards provide lower ongoing interest rates than other cards. These cards are good if you want to carry a balance from months to months.

If you want to earn rewards:

If you have spending habits so choosing a reward card or cash back card can be a good option for you. You can earn rewards in form of points, cash back or miles on your spendings. Rewards cards offer the best rewards, large sign-up bonuses and other perks but require good to excellent credit to get approved. If you use this card responsibly so that's a good option for you.

Want a credit card for your business:

Use a business credit card if you run a business. Business credit cards are just not only for paying business expenses but will help you to build business credit. These cards offer perks like cash back or travel rewards for regular business expenses.

Choosing a right credit can be beneficial for you. It can help you build your credibility as a borrower and pave the way for fulfilling your financial goals.



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