Credit cards can be a beneficial addition to your wallet, as long as you choose the right one and use it wisely. Many rewards credit cards they come with different benefits such as cash back or travel rewards. And whether you’re a student looking to get your first card, or struggling with credit card debt, finding a card that meets your needs can save you time and money. That’s why it’s important to know how to choose a credit card that’s right for you.
types of credit cards
A rewards credit card is a card that allows you to earn points, cash back, or airline miles on purchases. Some cards have a fixed cash back rewards rate, while others offer higher points on purchases made in specific spending categories. Flat rate rewards cards offer a fixed percentage of cash back or points on all purchases made with your credit card, and are good for cardholders who prefer a simple rewards structure. On the other hand, tiered rewards cards offer higher rewards earnings on purchases in various categories, such as travel and dining. Using a rewards credit card is an easy way to earn on the purchases you’re already making.
Redemption options for cash back rewards vary between cards and can include statement credit, a check, direct deposit, merchandise and gift cards. Travel rewards can be used for airline, hotel, or other expenses like car rentals.
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Check out Kiplinger’s picks for best rewards cards of 2023.
Balance transfer and 0% APR cards
A balance transfer card is a credit card that allows you to transfer balances from other accounts to avoid paying a high APR (Annual percentage rate). Most balance transfer cards offer a 0% introductory APR for a set period of time to help cardholders avoid costly interest payments on existing debt.
However, balance transfers almost always charge a balance transfer fee of around 3% to 5% on the total amount of debt you are transferring. In addition to credit card debt, some balance transfer cards will allow you to transfer other forms of debt onto the card, such as auto and personal loans.
Similar to balance transfer cards, other cards also offer an introductory offer of 0% APR on new purchases.
Check out Kiplinger’s picks for best balance transfer cards of 2023.
For those who travel frequently, opting for a travel card can be a valuable tool. Travel cards are designed to earn cardholders points or miles that can be used to pay for travel expenses. They also come with additional benefits that attract travelers, such as free checked bags, rental protections, access to lounges, and priority boarding. Many also have no foreign transaction fees. Some travel cards allow you to redeem points or miles through airline and hotel partners, while others are co-branded with a specific airline, such as Delta or United.
Check out Kiplinger’s picks for best travel rewards cards of 2023.
Student credit cards are a form of “starter card” for college students with limited credit history. Since they’re designed as a way for young adults to start building credit, they usually don’t have as stringent approval requirements or annual fees. Many student cards also offer rewards in categories that appeal to students, such as cash back on dining and entertainment, while others make it easy for cardholders to earn rewards with fixed-rate cash back when they begin their credit journey. .
Check out Kiplinger’s picks for best credit cards for students of 2023.
Secured cards are available to those with little or no credit history or poor credit in general. With a secured card, your credit limit is determined by the size of the cash deposit you make up front, so you’ll still be able to start building your credit history, but the lender won’t have to take a chance on you. These cards typically won’t have the same borrowing power as most cards, but they’re a great place to start if you’re looking to build credit from scratch or improve your low credit score. In fact, some secured cards will automatically upgrade you to an unsecured card if you show a history of good credit management.
Small Business Credit Cards
As the name suggests, small business credit cards are used to make purchases and help keep business and personal expenses separate. To qualify for a business credit card, you’ll need to provide basic financial information about your business; Even if your business is in good financial shape, the card issuer will likely want additional assurance that you and your business are a good credit risk. For this reason, most small business cards require a personal guarantee, which means that you, as the business owner, will have a thorough look at your personal credit report, likely lowering your credit score by a weather.
He best business credit cards They come with valuable benefits like employee cards, expense reports, and in some cases, cash back rewards that allow you to earn on purchases your business is already making.
store credit cards
Some retailers offer co-branded credit cards. Depending on the card, these can be used only at the partner store, while others can be used anywhere. Store credit cards allow cardholders to access store discounts, as well as earn points or cash back when they shop at specific locations. Consumers will generally have an easier time getting approved for store credit cards than other credit cards, but be warned: store credit cards typically carry higher interest rates. Opening a store credit card for a place you shop often can be an easy way to save money, as long as you pay off your balance right away.