Types of Credit Cards in the USA

The Ultimate Guide to Understanding Different Types of Credit Cards in the USA

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The use of credit cards for online purchases, paying bills, buying groceries, and paying for digital services has made them an essential part of our daily lives in this age and time. In the USA, we have a variety of credit card types available, each of them possessing special features, pros, and cons. In this detailed guide, we will delve into the most common types of credit cards in the USA, so as to help you make the right choice of credit card to use for your payments. Below are the types of credits in the USA:

1. Rewards Credit Cards

Rewards credit cards are among the most widely used types of credit cards in the USA. These type of cards gives you rewards and cashback incentives every time you use them to make a purchase. You can later redeem this cashback and use them for merchandise, travel, or statement credits. Below are the different types of rewards credit cards:

– Cashback Cards: These cards are designed in such a way that they track your purchase and give you a percentage of cashback on each purchase you carry out. Some of the credit cards in this category offer higher cashback rates on specific items such as dining, gas, and groceries.

– Point Cards: Using point cards, you can earn rewards points on every purchase, which are redeemable for merchandise, travel, and gift cards. You can also get bonus points on particular categories, such as travel or dining.

– Co-Branded Cards: These unique type of cards are offered by retailers, airlines, or hotel chains, and gives you rewards points or miles for the purchases you made with a particular brand. The pecks that come with these types of cards are benefits such as priority boarding or free checked bags when boarding.

Here are the top 5 Rewards Credit Cards In the USA:

2. Balance Transfer Credit Cards

Balance Transfer Credit Cards are solution-based cards meant for people who want to transfer their debt from a high-interest credit card to a lower-interest credit card. The advantage and selling point of these credit cards is that they offer a 0% APR introductory period for the transfer of your balance. This allows you to save on interest charges and pay off your debt faster. Some cards however may charge you a balance transfer fee, so it is advised to read the terms and conditions diligently and make sure you are satisfied with what they are offering.

Here are the top 5 Balance Transfer Credit Cards In the USA:

3. Low APR Credit Cards

Low APR Credit Cards are cards made for customers who carry a balance on their cards from month to month. The major advantage of these cards is that of offers you lower interest rate when compared to the standard credit cards and will help you save on interest charges over a period of time.  The downside to some of these Low APR Credit Cards is that they may come with a higher annual fee. Therefore it is of utmost importance to compare the total cost of the card before applying for them.

Here are the top 5 Low APR Credit Cards In the USA:

4. Secured Credit Cards

Secured Credit Cards are a special type of card that targets people with no or poor credit history. These cards require collateral which must be in the form of cash deposits, and in turn, becomes your credit limit. When you apply for this card, and use it responsibly, you can build your credit score and eventually qualify for unsecured credit cards, which offer better terms and benefits.

Here are the top 5 Secured Credit Cards In the USA:

5. Travel Credit Cards

Travel Credit Cards are cards made for people who travel frequently. The cards offer special benefits such as airport lounge access, hotel points, and travel insurance. A couple of these cards are known to offer their customers travel insurance, which can come in handy in cases of flight cancellations and lost luggage. These travel credit cards however come with annual fees and require that you have an outstanding credit score.

Here are the top 5 Travel Credit Cards In the USA:

Conclusion

It is important to state that choosing the right credit card can make a significant difference in your financial life and statement. There are a few metrics in your life that you must evaluate before applying for a credit card; they are your spending habit, credit score, and your financial forecast. Whatever your needs are, there is a credit card out there that can help you either earn rewards, save on interest charges, or even build your credit history. We hope this guide has provided you with the needed information to serve as a compass as you chose the best credit card for your financial situation.