Walk into any bank and you will see dozens of credit cards on the shelf. Some give cash back. Some save you miles for flights. Some ask for a deposit before you can use them. How are you supposed to know which one fits your life?
This guide breaks down the main kinds of credit cards in plain English. You will learn how each type works and who it tends to fit best.
Secured Credit Cards
A secured credit card asks you to put down a cash deposit, usually between $49 and $500. That deposit sets your credit limit. If you charge $200 and do not pay the bill, the issuer uses your deposit to cover it.
Secured cards are built for people with no credit or bad credit. They report to the bureaus like a regular card, which helps you build history. After 6 to 12 months of on-time payments, many issuers refund your deposit and upgrade you. For a quick comparison with newer alternatives, see our credit builder card vs secured card breakdown.
The Self Visa® Credit Card is a popular credit builder card that pairs with a savings loan. It has no hard pull at application. Terms and conditions apply.
Unsecured Credit Cards
An unsecured card does not require a deposit. The bank trusts you based on your credit score and income. Most cards you see advertised fall into this category.
Unsecured cards usually offer higher limits, better rewards, and fewer fees. They often need a fair to excellent credit score to qualify. APRs vary by creditworthiness, and our guide to APR on a credit card explains how the number is actually calculated.
Cash Back Credit Cards
Cash back cards pay you a percentage of what you spend. Rewards can be flat, like 1.5 percent back on everything, or tiered, like 5 percent on groceries and 1 percent on other buys.
These cards are a good fit if you want simple, easy-to-use rewards. You do not need to track points or plan trips. Cash back works best for people who pay their bill in full every month, since interest charges can wipe out rewards.
Travel Rewards Credit Cards
Travel cards earn points or miles that you redeem for flights, hotels, or rental cars. Some partner with specific airlines or hotel chains. Others earn flexible points you can move to different travel programs.
They often come with perks like free checked bags, airport lounge access, or travel insurance. Many have annual fees from $95 to over $500. They fit people who travel often enough to use the benefits.
Points Credit Cards
Points cards are similar to travel cards, but you can usually redeem points for more than travel. Options may include gift cards, statement credits, merchandise, or a deposit to your bank.
Points cards tend to have flexible redemption values. Travel redemptions often give you the most value per point. Always check the current redemption rate before you cash in.
Student Credit Cards
Student cards are designed for people in college who have little or no credit. They usually have lower credit limits and mild rewards like 1 percent cash back. Approval standards are more forgiving.
If you have no credit file yet, our guide to getting a credit card with zero credit score covers first-time approval tactics that work for students and non-students alike. Student cards often include tools to help build responsible habits, like free score tracking or bonus rewards for good grades. They can be a first step for young adults who are still building credit.
Business Credit Cards
Business cards are meant for business expenses. They usually have higher limits than personal cards and often earn extra rewards on categories like office supplies, internet, and travel.
You do not need a big corporation to qualify. Freelancers, gig workers, and side hustlers can apply with their own income and credit score. Our roundup of business credit cards for startups highlights options that work even without a long operating history. Business and personal spending should be kept separate for tax and bookkeeping reasons.
Store Credit Cards
Store cards are issued by a single retailer like Target, Amazon, or a department store. They often have easier approval and strong first-purchase discounts. Rewards usually apply only in that store or its network.
APRs on store cards are often high, sometimes over 30 percent. Store cards can help build credit, but carrying a balance on them can be expensive. Pay in full each month if you use one.
Balance Transfer Credit Cards
A balance transfer card lets you move debt from one card to another, usually at a lower promotional APR. Some offer 0 percent APR for 12 to 21 months, which can give you time to pay off the balance without interest.
Most charge a transfer fee of 3 to 5 percent of the amount moved. You will also need fair to good credit to qualify. After the promo period ends, the regular APR applies to any remaining balance.
Authorized User and Joint Cards
If you are trying to build credit with help from a family member, you have two main paths. You can be added as an authorized user, or you can open a joint account. Our guide on joint credit card vs authorized user explains which makes sense for different situations, and the minimum age for an authorized user article breaks down issuer-specific rules.
Credit Builder Cards and Apps
Credit builder cards are a newer type. They may work like debit cards but still report activity to the credit bureaus. Some put aside a portion of your deposits as security, while others use installment-style loans that unlock the funds you paid in.
These products are a fit for people with no credit, low credit, or those recovering from a setback. You can explore beginner-friendly options with tools like Firstcard's credit-building card. For free credit monitoring along the way, Creditship.ai can help you track progress.
How to Pick the Right Kind
Start with where you are on the credit ladder:
- No credit or bad credit, start with a secured card or credit builder card.
- Fair credit, try a mild cash back card or a student card.
- Good to excellent credit, look at rewards, travel, or balance transfer cards based on your goals.
Match the card's rewards to how you actually spend. A travel card you never use is worth less than a plain cash back card you use every week.
Frequently Asked Questions
Can I have more than one kind of credit card?
Yes, many people carry two or three cards for different uses. A common mix is one everyday cash back card, one travel rewards card, and one low-APR backup card. Just keep an eye on total utilization and pay each bill on time.
What kind of credit card should I get first?
If you have little or no credit, a secured credit card or credit builder card is often the best first step. These cards report to the major bureaus and can help you build a payment history. After six to twelve months of on-time payments, you may qualify for an unsecured rewards card.
Do store credit cards help or hurt your credit?
Store cards can help your credit if you pay on time and keep balances low. They can hurt your credit if you carry a balance at a high APR or miss payments. Because store cards are easier to get, they are sometimes used as a starter card.
What is the difference between a debit card and a credit card?
A debit card pulls money from your checking account. A credit card lets you borrow money that you pay back later. Only credit cards, and some credit builder products, typically report to the credit bureaus and build credit history.
