There are many types of credit cards on the market today. With so many different types of credit cards available, it can get very confusing to figure out which kind of credit card best suits you and your financial situation.
You don’t have to learn about every type of credit card that’s out there to choose the right card, but you must understand your financial situation and goals and then do a little searching to find the best card for your needs and goals. Take a look at some of the credit cards listed below to help you make the best choice.
Balance Transfer Credit Cards
If you’re paying high-interest rates on your credit cards coupled with a lot of credit card debt, a balance transfer credit card could be the best solution to relieve you of some high-interest charges for up to 21 months.
Many balance transfer cards offer an initial 0 percent APR. You can transfer the balances of your high-interest credit cards to the balance transfer credit card for a small fee between 3 and 5 percent. Some cards off no transfer fees, so it pays to do your research when searching for a balance transfer credit card.
Travel Credit Cards
If you travel a great deal, a travel rewards credit card is an excellent choice to save money and make use of all those travel miles, whether for business or pleasure. You earn points or credit toward travel-related expenses, such as rental cars, hotels, and airline tickets. However, many travel reward cards have high annual fees, so you must weigh the benefits against the yearly fees.
Secured or Credit Building Credit Cards
It can be challenging for people with less than perfect credit or minimal credit history to get a credit card. Secured cards give people with poor or no credit history a chance to build their credit with on-time monthly payments. According to the experts at SoFi, “Making every payment on time is the ideal way to build credit successfully.”
With a secured credit card, you put a cash deposit into a bank account where the card will be issued and receive a line of credit based on the deposit amount. Some secured cards will give you a slightly higher credit line than your initial deposit.
The deposit works as collateral for your line of credit. If you make your payments on time each month, your line of credit will increase without you having to increase your deposit. Your deposit can also earn interest while you build your credit rating simultaneously. Companies like SOFI and other online financial institutions and banks are good places to begin your search for a secured credit card.
Cash Back Rewards Credit Cards
Cash back rewards credit cards can pay an impressive 5 percent cash back on purchases, depending on where and what you purchase. Cash back rewards cards come in all shapes and sizes, so it’s important to do your homework.
Some offer little or no annual fees, while others have high annual fees and only offer cash back rewards on certain purchases, such as dining or travel. Other cash back reward cards offer bonus rewards for specific categories each quarter. Find a cashback rewards card that best suits your spending habits.
When hunting for a new credit card, doing your research will pay off in the long run. You should check the card’s interest rates and annual fees and the credit card’s late fees, application fees, and over-the-limit fees as well.
