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5 Most Attractive Types of Credit Cards

If you are in the market for a new credit card or just browsing to see what is available in the market, you will quickly notice that there are seemingly endless types of credit cards out there to choose from. It may seem confusing but taking the time to find the right credit card for you is important as these cards serve important functions in our everyday lives and most importantly you don’t want to pass up a great deal just because you were unaware or poorly informed. Below we discuss what we believe are 5 attractive types of credit cards in the market today.

1. Rewards Credit Cards

Rewards credit cards provide you with points based on your qualified purchases. You essentially are gaining a rebate as you use your credit card. With rewards credit cards you are in control of how to spend your points and when, although some credit card points will expire after a particular period of time. You get to choose if you want to apply the points toward a statement, gift cards, or merchandise. Large credit card vendors like Chase Bank and Capital One have several cards with attractive rewards programs.

2. Cash Back Credit Cards

Cash back credit cards provide a percentage back to you on your eligible purchases. It is important to know what types of purchases you will be using the cash back credit card for primarily as that may sway the type of cash back card you want. Some cash back credit cards provide you with a higher percentage back for purchases related to dining, gas, and groceries. However, there are some cash back credit cards that will provide a flat rate on all purchases.

3. Low Interest Credit Cards

This is an important category that is often overlooked. Credit cards are a notoriously expensive form of accessing liquidity because of their high interest rates. Government research shows that the average credit card interest rate is approximately 20% on an annual basis! Low interest credit cards offer rates that sometimes can be as much as 50% lower than this. Credit unions in particular tend to offer cards with lower interest rates, not just for the introductory periods too. Ontario-Montclair School Employees Credit Union (OMSEFCU) offers VISA Classic and VISA Platinum cards to its members with interest rates as low as 8.5% for the platinum card as of this writing. Of course the unique aspect about OMSEFCU is that it is a nonprofit and so they exist to serve their members, but all consumers should consider low interest credit cards when deciding what type of card to get.

4. Secured Credit Cards

Secured Credit Cards are the perfect type of credit card for those who have low credit, no credit, or poor credit. A secured credit card is a fairly easy type of card to get because you pay a deposit for the limit on the card and if you want to increase your limit you will have to pay more to secure the higher limit. This type of credit card is best for building your credit.

5. No Annual Fee Credit Cards

In addition to the interest rate the other cost associated with many credit cards is the annual fee. The annual fee is a yearly fee that you have to pay to continue to use the credit card. If you don’t like the idea of having to pay to use a credit card, then you might want to look into no annual fee credit cards. Usually credit card companies charge an annual fee in return for great perks such as attractive rewards points and exclusive access to special events. But some credit cards charge an annual fee without offering a lot of perks. Interestingly, the cards offered by the credit union discussed earlier, OMSEFCU also has no annual fee on all of its credit card offerings and despite this, still offers the opportunity to earn reward points with the cards.

Conclusion

Overall, there are so many types of credit cards that it’s a good idea to do your own research against what your financial situation is. The 5 categories of cards we discussed can help you save money through lower financing costs, getting cashback and rewards. You will also want to make sure it’s a credit card you can use long-term as your credit will continue to improve by showing a longer history of open credit account(s). Therefore, while it may be tempting to sign up for a card that is providing a sign-up bonus or a 0% APR, if you will eventually get stuck with a really high

APR later on, you might have to close that account which will negatively impact your credit. Doing the research upfront is always a good idea for this and other reasons.

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