The Different Types Of Credit Cards in the USA

Let’s explore the different types of credit cards in the USA

There are 4 different credit card networks. They are American Express (Amex), Discover, Mastercard, and Visa. Each of these networks is linked to credit providers. These credit providers have different credit card offerings. By choosing a credit card offer that is well suited to your lifestyle, you can receive more benefits. According to September 2020 statistics, over 70% of people in the US has at least 1 credit card.

Let’s dive into the different types of credit cards in the USA.

What's Ahead:

1.Sign-up bonus offers credit cards
2. 0% Intro APR on purchases credit cards
3. General rewards credit cards
4. Cash back credit cards
5. General travel credit cards
6. Airline specific credit cards
7. Hotel credit cards
8. Secured credit cards
9. Balance transfers credit cards
10. No annual fee credit cards
11. Student credit cards
12. Business credit cards

1.Sign-up bonus offers credit cards

These credit cards follow the customer acquisition strategy giving value before they receive anything in return. The value they give you may be in the form of cash on the card, loyalty points or even airline miles. There is normally a certain condition linked to the sign-up bonus credit card. This condition may be that you need to spend a certain amount on the card within a certain time frame. The credit card may offer 6% cash back on up to $1,000 in purchases in regularly changing categories. This prime example of a bonus category credit card allows you to earn even more cash back than you normally would be able to with a flat rate cash back credit card.

2. 0% Intro APR on purchases credit cards

These cards offer you a 0% APR up to 20 months. After which, the credit card will return to charging you the normal APR. This is a very useful benefit which can help reduce your cost of debt in the short term. You may consider moving high APR debt to this card to enjoy that saving on the cost of debt. But you must keep in mind that the 0% APR has a time period attached to it and it is not forever. Meaning that eventually you will pay “full price” on the debt on the card.

3. General rewards credit cards

This type of credit card is a good choice if your shopping habits are spread out over many different categories. It is the safe choice if you are uncertain which card will give you the most benefits. You can redeem your cash backs regularly and don’t face many restrictions or time periods to use the benefit.

4. Cash back credit cards

These credit cards will give you a percentage cash back on every single purchase you make. It is a very straightforward approach and easy to understand. In some cases there may be a higher percentage cash back award for spending more during a certain time period. Once you have hit the required threshold, you can normally request the cash to be paid to you.

5. General travel credit cards

If you travel often and are flexible in your choice of airline and hotel, you can receive great benefits by having a general travel credit card. Most of these travel credit cards allow you to earn points for booking the flight or hotel directly, you do not need to use a specific travel portal to get your points.

6. Airline specific credit cards

If you love a certain airline and you fly with them almost exclusively, you can receive great benefits by getting the airline-specific credit card. You mostly earn points and airline miles and before you know it you may have a free flight as you have accumulated enough frequent flyer miles. Let’s continue exploring the different types of credit cards in the USA.

7. Hotel credit cards

These accommodation credit cards operate quite similarly to airline credit cards. You will receive points, cash backs and free upgrades when using the hotel credit card. It’s best to consider this type of credit card if you love staying at the same hotel chain most of the time.

8. Secured credit cards

This type of credit card is intended for people who have not yet built up a credit history, or have a bad credit history. The card issuer requires you to put down a security deposit. The card is then given to you with a similar cash limit to what you put down as security. In some cases they may give you slightly more credit than what you put down. In time, if you manage your repayments well, you may improve or establish a good credit score. This will allow you to apply for a low APR % credit card later.

9. Balance transfers credit cards

This type of credit card invites you to move your balance from an existing credit card, over to a new credit card. The incentive to do so is normally a 0% APR for up to 20 months. This effectively means you get rid of your current credit card, move that balance to the new one and enjoy a much lower cost of debt. These cards often provide other benefits as well such as rewards programs, discounts and airline miles. This introduction offer of a 0% APR is a proven way for the credit card issuers can get you as a customer. Also important to make sure you are aware if the credit card will charge a transfer fee and find out what that is before you choose a credit card company for a balance transfer credit card.

10. No annual fee credit cards

There is a major benefit to having a credit card that has no annual fee. You are able to hold the credit card account open indefinitely without ever incurring costs associated to the card. This means it is a good way to maintain a long and clean credit history, which will ultimately improve your credit score.

11. Student credit cards

These credit cards are offered to students who are looking to start building their credit history. You must be able to show some form of income to repay the card, and you should try and make sure that the credit card does not attract an annual fee. If you do not have a part-time job while you are studying, you may still be able to get a student credit card by having someone co-sign for you. The co-signer acts as a surety that in the event of defaulting on payments, the surety will be asked for the repayment.

12. Business credit cards

Besides the benefit of keeping your business expenses separate from your personal expenses, these business credit cards also offer great rewards and cash backs. By making your business purchases on such a card, you will be receiving some cash backs and rewards which you can use in your personal life or re-invest back into your business to improve profitability.

Now you have the answer to: What are The Different Types Of Credit Cards in the USA?