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Credit cards are no less than an asset that helps keep your finances smooth and sorted. These cards are easy to use and offer multiple benefits, like rewards, cash back, and lower interest rates.
Moreover, you can work towards building a good credit history by using these cards, which is an excellent move toward financial management. The only challenge you might encounter is exploring all the credit card types in the USA to identify which one would better cater to your requirements.
Understand that every individual or business has varying requirements, so what worked for others in your network may not work for you!
In this guide about different types of credit cards in the USA, we will explain what exactly a credit card is and the different types you can explore before signing up for one.
What is a Credit Card?
It’s a financial tool that your bank or a financial institution issues for its clients. The cardholders can borrow funds through this card for shopping, bill payment, and other purposes. There is an agreement that the cardholder will repay the borrowed amount later with the applicable taxes. In the USA, these cards are the essential elements of consumer finance owing to all the perks it offers.
Moving on, let’s discuss different types of Credit Cards available in the United States to help you narrow your choices so you can find the best credit card type for you and get most out of it.
Types of Credit Cards in the USA
In the USA, you will find multiple credit card options, each catering to a set financial need and consumer requirement. Here is a list of credit card types in the USA and a detailed brief about them.
Business Credit Cards
As the name suggests, business credit cards are for small businesses or firms. These cards come with higher credit limits. It means these cards let you borrow more money from the bank or the issuing body and use it for your business growth.
Moreover, the rewards are also aligned with business-related spending, such as office furniture, machinery, and likewise. Financial institutes offer customized rewards through business credit cards, allowing business owners to make the most of this tool.
Some popular options in this category are Blue Business℠Plus Credit Card and American Express® Business Gold Card, which has no preset spending limit.
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Rewards Credit Cards
Rewards credit card is for those who wish to avail the rewards on their spending, be it cash back, points, or miles. Every time you travel or purchase, you win rewards that you can avail of immediately or later. There are three different kinds of rewards through these cards:
Cash Back Credit Cards: In these cards, you get back some percentage of each transaction made through the card.
Points credit card: With these cards, you earn certain points for every penny you spend on your card. These points are redeemable during your next travel, or you can use them as a gift card.
Miles credit card: These cards reward you with miles that can be redeemed for travel tickets or other travel-related expenses. Chase Saphire Reserve is a popular miles credit card that offers travel and dine-in related perks.
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Travel Credit Cards
Travel credit cards give rewards specifically related to travel and expenses related to it. You will earn free miles, discounts on your travel tickets, discounted hotel stays, and more. A few travel credit cards also offer zero foreign transaction fees.
So, if you are a regular traveler, you can certainly consider the Credit Card Types in the USA that fall under this category. You will get a convenient payment mode and the best part is that your travel benefits will certainly make your experience even more fun.
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Balance Transfer Credit Cards
These cards are for those who wish to pay debt from other cards at a lower or negligible interest rate. The balance transfer credit cards can offer minimum, and sometimes 0% APR on transferring a balance, allowing the cardholder to save big time on the interest amount.
Most of the balance transfer credit cards offer 0% introductory APR and after that set period ends, your interest will be negligible as compared to other credit card options. You can opt for the Citi® Diamond Preferred® Card that comes with 0% APR for the first 21 months.
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Cash Back Credit Cards
Cashback credit cards give some percentage of the amount you spend back into your account. However, your spending has to be business-related. Some cards even offer cash back rewards for purchases related to office supplies, internet bills, and likewise.
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Student Credit Cards
These Credit Card Types in the USA are specifically designed for students. You will get lower credit limits on these cards, and they are mostly designed for earning rewards and cash back that the students can avail.
It is significant to note that even the interest rate on these cards is lower than other credit cards in the USA. Most students in the USA opt for Discover it® Student Chrome as it comes with zero annual fee and great cashback rewards.
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0 Percent APR Credit Cards
0 percent APR credit cards keep a set period during which the user will not be charged any interest on purchases or transfers. It is an excellent option for managing debts or simply enjoying some breathing room in your finances. If you plan to fund your home improvement project through a credit card, this would be an apt choice.
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Airline Credit Cards
These are specialized credit cards in the United States offering rewards and benefits related to air travel. Every cardholder earns miles or points for each transaction they make. These points or miles are easily redeemable for flight seat upgrades and other travel-related expenses.
Furthermore, you can enjoy free checked bags, priority boarding, lounge access, and much more. If you often travel for work or leisure, you can opt for the Delta SkyMiles® Gold American Express Card that offers more than 10K bonus miles on every thousand dollars you spend. Moreover, you get perks like a free checking bag and more.
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Hotel Credit Cards
As the name suggests, these credit cards in the USA offer rewards and benefits specifically for hotel stays. The user will earn points for every transaction made through the card, and these points are redeemable in terms of additional free night stays, room upgrades, and many other perks related to hotel stays.
These cards are perfect for travelers who often book stays during their travels as they offer an enhanced experience.
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Store Credit Cards
These Credit Card Types in the USA are issued by specific retailers. You can use them during your purchase at that particular store or its affiliated brands. You can earn multiple benefits such as discounts, rewards, and exclusive offers against your future purchases.
The best part about these cards is that they are easier to qualify for. However, you might experience a significantly higher rate of interest. The Amazon Rewards Visa Signature Card is a suitable option in this category.
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Credit Card Types in the USA – Which Card is Suitable for you?
After learning about numerous Credit Card Types in the USA, you might wonder which one is apt for you. Well, to identify which card is suitable for you, you have to learn about its offerings, terms, and conditions in detail. However, a few choices are obvious, based on your eligibility.
For example, if you are a student, you will not be eligible for any business card or a specific cashback credit card. The only option that is suitable for you is the student credit card, as it caters to all the requirements of a student. Similarly, for small business owners, there are business credit cards with higher credit limits and lower interest rates!
So, to identify which credit card type would be most suitable for you, learn about the details, check your eligibility, and decision-making will be convenient.
How to Choose the Best Type of Credit Card in the USA?
When you explore the credit card types, you will see that many offerings are pretty much similar for every card. However, if you check other details, like interest rate, card fee, and more, you might get confused again. Understand that there are multiple factors that you would have to keep in mind while choosing a credit card type for yourself. Some of the factors are:
- Keep your credit score in mind as it will influence your eligibility for different credit card types in the USA.
- Compare the interest rates of different credit cards, and you would certainly want to opt for the one with at least low introductory interest rates.
- Consider the annual card fee or the late payment charges and all other hidden costs that come with a credit card.
- Learn about your preferred card’s rewards and benefits to ensure it aligns with your interests. For example, if you travel often, ensure your card offers many travel-related rewards.
- Evaluate how easily you can redeem the rewards and other benefits that you earn. Make sure the card has flexible terms and conditions, and it won’t be a fuss to enjoy the perks.
- Keep your spending habits in mind to choose a card with an apt spending limit. Moreover, check if the card offers rewards and benefits in categories that match your interests.
With these considerations in mind, you can narrow down all the available options and pick a credit card that suits your requirements. As easy as it makes your life, it is equally essential to choose the right card and use it responsibly.
View the detailed guide on How to Choose the Best Credit Card?
Conclusion
Exploring the multitude of credit card types in the USA requires detailed research and careful consideration of multiple factors. You can find countless options based on your credit score, spending habits, and reward preferences.
You would have to decide whether you wish to prioritize the reward types, minimized interest rates, or the credit limit it offers. Moreover, there are financial bodies that can even let you tailor your credit card as per your requirements.
So, you would have to conduct thorough research, learning about hidden charges, and the card offerings in detail. Make a striking balance between the rewards and the operations costs involved to pick a card that meets your immediate requirements and supports your long-term financial objectives.
Furthermore, you should choose the cards after minimizing the potential risks. Make well-informed and well-researched decisions and enjoy a smooth and sorted financial situation.
