Finding your perfect credit card involves understanding the benefits you’re seeking. Whether you’re looking for extra cash at the end of each month or some travel perks, there’s a card out there for you. If you’re unsure how to start looking, take a look at this guide to learn more about the different types of credit cards.
Cash-Back Cards
A cash-back credit card is a type of credit card that allows cardholders to earn cash rewards on their purchases. These rewards can be redeemed for cash back, statement credits, or gift cards. The best credit cards for 2022 include several cash-back cards, like the Chase Freedom Flex Card. This card offers a $200 welcome bonus and no annual fee. Typically, these credit cards offer cardholders a percentage of their purchase amount back as a reward. For example, a card might offer 5 percent cash back on all purchases made at grocery stores—this means that for every $100 spent at a grocery store, the cardholder would earn $5 in cash rewards.
Cash-back cards often have a rewards cap, meaning that the cardholder will only earn a certain amount of rewards per month or year. If a card has a $200 cap on monthly rewards, the cardholder would only earn $10 in cash rewards for every $200 spent. Some cards also often have a minimum redemption amount, meaning the cardholder must accumulate a certain amount of rewards before redeeming them for cash back, statement credits, or gift cards.
Travel Cards
A travel credit card is specifically designed for travel expenses. This card type offers travel-related perks and benefits, such as discounts on airfare, hotel stays, and car rentals. Several benefits come with travel credit cards, like points or miles that can be used for free travel, travel insurance, and free travel upgrades. When you choose a travel card, you have to figure out what kind of traveler you are. If you frequently fly, you may want a card offering airline miles. If you prefer to stay in hotels, look for a card linked to a hotel chain. Some travel cards are more flexible and provide travel rewards for airlines, hotels, and cruises. Also, be sure to consider the other benefits that are offered, such as purchase protection or travel insurance. As of 2022, the best-rated airline card is the United Club Infinite Card, which offers a 100,000-mile welcome bonus.
Secured Cards
A secured credit card is a type of credit card backed by a savings account or other collateral. In other words, the cardholder must deposit a certain amount of money into a savings account or other collateral to be approved for the card. This deposit serves as the cardholder’s credit limit. The advantage of a secured credit card is that it can be a great way to build or rebuild credit. In fact, using a secured credit card is one of the easiest and most effective ways to improve your credit score. When using a secured credit card, it is important always to make your payments on time and to keep your balance low. This will help to boost your credit score and improve your credit history. The Discover It Secured Credit Card is the most highly rated secured card. It offers a cash-back rewards system and free FICO credit score access.
Student Cards
A student credit card is designed for use by students. It typically offers lower credit limits than other types of credit cards. It may come with other features, such as a lower interest rate, designed to help students manage their finances. However, these cards usually lack a lot of benefits. To get a student credit card, you will typically need to be a student at a college or university. A student card can be a helpful tool for students who want to build their credit history or manage their budget responsibly. The best-rated student card in 2022 is the Discover It Student Cash Back, which offers no annual fee and a 1 percent cash-back rewards system.
Several types of credit cards are available to consumers, each with its own set of benefits. It’s important to understand the different types of credit cards available to pick the best card for your lifestyle.
