According to the latest data, more than 191 million Americans own a credit card. Specifically, the average person owns around three cards!

Whether you have a collection in your wallet, or you haven’t signed up for a credit card yet, it helps to know your options.

Today, we’re taking a look at the different types of credit cards available, so you can make an informed choice.

1. Standard Credit Cards

You may have heard standard credit cards referred to as plain vanilla cards. This is because, unlike others on this list, they don’t offer rewards or perks.

If you’re just starting to build your credit and you want a no-frills card, then a standard one is the way to go. While you won’t earn any benefits from using your card, the terms will be easy to understand and follow.

How does it work?

Your card will carry a revolving balance that can go up to a pre-determined credit limit. When you make a purchase, you use up a portion of that credit. In turn, you earn credit back when you make a payment.

While these cards are simple in nature, it’s important to keep up with your minimum monthly payments. You can incur late-payment penalties if you miss the deadline.

2. Cash-Back Credit Cards

The specific terms will vary from card to card, but cash-back credit cards allow users to earn money or credits each time they swipe their plastic.

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While some companies will offer a flat rewards program, others will reward shoppers for purchases in certain categories, such as entertainment, gas, or dining.

While these can be advantageous, keep in mind that some cash-back cards will require an annual fee. Think about where you spend most of your money, and look for cards that offer monetary rewards in those categories.

3. Rewards Credit Cards

Technically, cash-back cards would fall under this category, but rewards cards are often much broader in nature. In addition to cash, the other two most common rewards include points and travel perks.

While it can be nice to receive cash back, some people prefer the flexibility that points can provide. Most credit card companies will allow you to use your points to pay for a variety of goods and services, such as online gift cards and airfare discounts.

If you’re a frequent traveler, then look for rewards cards that offer special benefits you can use. From free flights to free hotel stays, you may be able to recoup some of your costs.

4. Balance Transfer Credit Cards

Many credit cards will allow you to transfer balances, but there can be fees and red tape involved. Balance transfer credit cards are designed specifically for this purpose, allowing you to complete the transfer for a low rate. Sometimes, this rate is even 0%.

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Why would you want to do this? It can be a smart move if you’re currently paying on a high-interest credit card.

However, be sure to read the fine print carefully. A balance transfer card might lure you in with a 0% rate, but you might wind up paying a fee each time you transfer. You’ll need great credit to qualify for the best terms, so learn how to improve yours if necessary.

5. Student Credit Cards

Student credit cards work as their name implies. These cards are aimed at young college students who haven’t amassed a solid credit history yet. Their money management skills may be equally lacking.

This means the applications are usually shorter and easier to complete, and it’s easier to earn approval. Annual fees are low, if they exist at all, and many companies will grant rewards for academic excellence.

Before you apply, note that most companies will require enrollment in a four-year college or university. If you qualify, this can be a smart way to build your credit and learn financial responsibility.

6. Business Credit Cards

Are you a professional who routinely makes purchases for work? With a business credit card, you can keep your personal and professional spending separate from one another.

This way, you can earn benefits for your business-related spending. Plus, most companies will offer user incentives including cash back, travel points, and general rewards.

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In addition to a robust rewards program, look for a business credit card that helps you run your day-to-day business. For instance, some options will include expense tracking features so you can easily track where your company is spending money.

7. Secured Credit Cards

Most of the credit cards on this list are unsecured. That means you don’t have to put any collateral or deposit on the line to use them.

On the other hand, a secured credit card requires a security deposit. Your credit limit is usually equal to that deposit, though it can be a little more in some cases.

Though it may feel restrictive, this can be an ideal choice if your credit history is sub-par. It’s also helpful for individuals who haven’t built up any credit history at all. These are among the easiest types of cards qualify for, and can help you overcome a financial setback.

Speak to your financial institution to see if they offer secured credit cards, and how to apply. Getting the best credit card requires being up-front and honest about your situation, and asking how an advisor can help.

8. No/Low-Interest Credit Cards

No-interest credit cards are sometimes advertised as 0% Annual Percentage Rate (APR) cards. These will allow users to make interest-free purchases for a set amount of time.

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If you’re eyeing a large purchase and you’re sure that you can pay it off by the deadline, then this can be a great opportunity.

In a similar vein, you can also find low-interest credit cards. While these don’t meet the 0% offer, they’re usually available all the time, without an introductory period.

9. Store Credit Cards

If you shop at a particular store on a frequent basis, then you may benefit from a store credit card.

Retailers will offer these cards to shoppers, which they can turn around and use to make purchases in their shop. Once you charge an expense, you can pay it off over time as you would with any other credit card.

While this might feel like a home run, keep in mind that store credit cards can carry some of the highest interest rates around. You’re also more likely to get charged for deferred interest.

This means that if you don’t pay of your items by the low-interest or 0% APR introductory period, then you’ll be charged retroactive interest. As long as you know you can avoid this problem, then these cards can have some excellent perks.

10. Gas Rewards Credit Card

Gas prices getting you down? With a gas rewards credit card, you can earn cash back or points every time you fuel up.

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This type of card is ideal for someone with a long commute to work, who spends hours each week on the road. It’s also worth a second look if your job requires extensive use of your car, such as driving for Uber.

In addition to helping you save at the pump, many of these companies will also reward users with cash back on certain forms of transit, including taxis, ride-shares, train tickets, and more.

11. Co-Branded Credit Card

Sometimes, a store or brand will enter into a partnership with a major credit card retailer. The result is a co-branded credit card.

For instance, some airlines will team up with well-known card companies to offer travel reward cards. Or, a hotel chain may do the same to promote its rental spaces.

While co-branded credit cards can also be used in a retailer’s store, most allow you to use the card at a variety of places. Although they’re usually limited to one brand, these cards can help you secure a variety of great rewards, including cash back.

Which Types of Credit Cards Will Your Use?

If you know that you can pay your balance full at the end of each month, then a credit card can be a great resource. Still, it’s important to do your due diligence and understand the differences between them.

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Navigating the different types of credit cards can be overwhelming at first, but this is one step that you can’t afford to skip. Jot down the benefits that each card provides, as well as any terms that would be ab adjustment for your family to follow. Then, you’re one step closer to choosing the right credit card for your needs.

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