The Different Types of Credit Cards

Quick Answer

Credit cards are often categorized by a defining feature or benefit. Understanding how the different types of credit cards work and who they’re intended for could make choosing your next card easier.

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There are many different types of credit cards, and finding the right card can depend on how you plan on using the credit card and your credit. Understanding how the different types of cards work and who they're generally for can be helpful when you're comparing the options.

Secured Credit Cards

Secured credit cards are generally for people who are brand new to credit and don't have a credit score, or who have a poor to fair credit score because of credit mishaps in the past. Some secured cards don't require a credit check at all. But these cards require you to put up a security deposit by either sending the card issuer a refundable deposit or locking money in a bank account with the issuer.

While secured cards may sometimes have high fees and interest rates, there are options that offer rewards and don't have an annual fee. Your credit limit will generally match your security deposit amount because the deposit limits the card issuer's risk of losing money. You still have to make monthly payments if you don't want to hurt your credit, but the card issuer may keep the funds if you fall behind on your bill.

Rewards Credit Cards

A rewards credit card is any card that offers rewards. These often overlap with other types of cards, such as a secured card or student card that gives you rewards, and the eligibility requirements can vary significantly. However, if you're focusing on rewards cards, you'll want to consider the three main types of rewards.


Many rewards cards will give you points in the card issuer's rewards program. These types of rewards cards are some of the most flexible, as you can often redeem them in many ways, including for cash back, travel, merchandise and gift cards. Some programs also let you transfer rewards to travel loyalty programs. But getting the most out of the rewards can be difficult because each point's value can vary depending on the card and redemption option.

Cash Back

Cash back cards may be the easiest to use and understand. You'll earn a percentage of your purchase amount as cash back, which you may then be able to redeem for a statement credit, check or deposit into your bank account. Look for minimum redemption requirements when comparing cards, and know that the rewards may appear as dollars or points on your statement. In some cases, a "cash back" card might actually be a points rewards card, but the issuer wants to highlight the cash back redemption option.

Co-Branded Travel Cards

Travel credit cards are primarily made up of co-branded hotel and airline credit cards. Using these cards, you can earn miles or points in the company's loyalty program. A co-branded card might limit your redemption options, as you'll have to redeem your rewards through the program. However, these cards may come with brand-specific perks as well, such as free checked bags or status in the loyalty program.

Flat vs. Tiered Earnings Rates

Additionally, consider how you'll earn rewards when using a card. A flat-rate rewards card will give you the same percentage of rewards on all your purchases, such as 2% cash back on every purchase, while tiered-rate rewards cards offer a bonus on specific types of purchases, such as bonuses on dining and travel. Which is best can depend on where you shop and how much you spend throughout the year.

Intro 0% APR Credit Cards

Credit cards may come with a promotional 0% annual percentage rate (APR) offer that will last for a limited promotional period.

Introductory 0% Purchase APR Cards

Some cards will give you a promotional rate on the purchases you make with the card. They can be a good option before a busy spending season or when you're making a large purchase and need time to pay down the balance. You may even be able to save a lot of money compared with taking out a loan if you pay off the card before the promotional period ends.

However, you may need a good to excellent credit score to qualify, and you won't know your credit limit until after you're approved. Also, watch out for cards with deferred interest offers. If you don't pay off your card, interest generally starts to accrue on the remaining balance. But with deferred interest, all the interest that would have accrued during the promotional period could be added to your balance.

Balance Transfer Cards

Balance transfer cards have 0% intro APR offers on balances that you transfer to the card. You can consolidate debts and potentially save money by transferring the balances to the card and paying down the debt while it's not accruing interest. However, there's often a 3% to 5% balance transfer fee, so do the math to compare how much extra you'll spend upfront with how much you may save over time.

Student Credit Cards

Student cards can be a good option for establishing or building your credit while you're in school. While you may start with a low credit limit, it may also be easier to qualify for a student card than other unsecured cards because card issuers know students often have a limited income and credit history.

You can also find student cards that offer rewards and don't have an annual fee. Compare the cards' other benefits and terms as well, such as extra rewards-earning opportunities, statement credits and interest rates. And learn about managing your first card before applying.

Store Credit Cards

Some merchants, such as department stores and gas stations, offer their own co-branded store credit cards. These cards may be open-loop cards, which will have a credit card network symbol on them, or closed loop. You can use open-loop cards anywhere that accepts the type of credit cards (such as Visa or Mastercard), but you can only use closed-loop cards at the specific retailer.

It might be easier to qualify for a closed-loop store credit card than other credit cards. However, you may receive a low credit limit, and you'll be limited in how you can use the card. Still, you can build credit with a store card. And both closed- and open-loop cards may give you retailer-specific benefits, such as extra discounts and longer return periods.

Business Credit Cards

Business credit cards are for small business owners. While some of these cards don't get reported to the credit bureaus under the business owner's name, eligibility can still depend on the business owner's personal credit. The card may also have a personal guarantee, which means you're personally liable for the debt if the business doesn't pay off the balance.

There aren't many differences in how business credit cards function compared with consumer cards. But business cards may have business-specific features, such as the option to add employee cards, and the rewards categories may align with your business purchases, such as online advertising. Also, the Credit CARD Act, which provides consumer protections, doesn't apply to business credit cards. Many card issuers choose to include similar benefits on their small business cards, but read the card agreement carefully to understand the terms and conditions.

Get Matched With Your Next Card

Regardless of the type of card you want, you may want to check your credit score before you apply. Most card issuers will review your credit report, and the resulting hard inquiry could take a few points off your credit score even if you don't qualify.

You can also use Experian CreditMatchTM to compare cards within different categories and see the pros and cons of specific cards.