Credit Card Types and Comparisons

With so many credit card offers being marketed towards consumers on a daily basis it can be difficult to conduct an accurate comparison, especially when such cards are not clearly categorized. Although every card operates under it’s own set of unique terms and guidelines it is possible to separate credit cards into distinct types.

The following credit card types can be used for general classification to aid in the comparison of various offers, however it should be noted that many cards fall under several categories simultaneously. Thus, in many cases the credit card’s type is simply the strongest selling point or attribute that the card has to offer.

Reward Cards

Reward credit cards are very common in today’s competitive credit industry, as they offer an incentive for the card user to make more purchases and maintain a higher card balance. With a reward card the cardholder can earn a certain amount of cash back or credit at the end of each billing cycle. It is important to note that there are many types of reward credit cards including cash back cards, frequent flier cards, gas reward cards, and even merchant specific cards that offer discounts at retail outlets. There are also reward cards that offer all of the aforementioned rewards in a single flexible package. It is best to find a card that allows the cardholder to choose how their rewards are allocated.

Balance Transfer Cards

Balance transfer credit cards allow new cardholders to transfer existing balances from their old credit cards. These cards often have a 0% APR interest rate during the introductory period. By transferring their balances to a card with no interest rates, the cardholder can eliminate pesky card balances that could be causing debt to accumulate. Perhaps the most appealing aspect of a balance transfer credit card is the fact that no fees are charged when existing balances are transferred over. It is important to note that the APR will change after the introductory period, and depending upon the card it may be fixed or variable. Ideally, it is best to find a balance transfer card that offers a fixed low APR after the introductory period.

Business Cards

Business credit cards are perfect for business owners that need a personalized credit card. Many times the business logo can be engraved on the card. Aside from the aesthetic features, business credit cards are also ideal for businesses because they offer higher credit limits and lower interest rates. Some business cards will require a balance to be carried at all times, while others will allow the balance to be paid in full at the end of each billing cycle. Cards that allow the balance to be paid in full are optimal, as they do not force interest to accumulate.

Student Cards

Student credit cards are specifically designed, both aesthetically and financially, for college students. Most student credit cards have a relatively simple approval process. Nonetheless, student credit cards can effectively build credit if used correctly. In some cases the card will be secured, which means the student or their parents will have to make a prepaid deposit. Ideally it is best to find an unsecured student credit card that offers rewards for good spending habits.