Types of Credit Cards for Beginners

Today we’ll talk about the different types of credit cards that you might come across. In the most general sense, there are three main types of credit cards: those intended for use by general consumers, students and small business owners.

General-consumer credit cards are what most people consider “normal credit cards” and are the largest segment of the market. Their terms vary widely, based on issuer, card network, credit score requirements, and a number of other factors.

Users of general-consumer credit cards are eligible for all consumer protections. Student credit cards are a unique type of credit card offered by credit card companies because college students are a unique group -- their income is limited in the short term, but their advanced level of education gives them a lot of earning potential.

So students are usually able to get more attractive credit card offers than their experience and financial circumstances would ordinarily merit. Student credit card users are also eligible for all consumer protections. Business credit cards tend to offer higher credit lines than their general-consumer counterparts.

They also give you special expense tracking features, the ability to customize spending limits for employee authorized users, and rewards targeted to common company expenses such as office supplies and telecommunications services. Business credit card users are not eligible for a number of important consumer protections, though.

There are many different types of credit cards within those three groups, too, based on the fees, interest rates, rewards and benefits offered. A credit card’s specific terms are what gives it character and sets it apart from the pack. First are rewards credit cards.

Credit cards offer spending-based rewards in terms of cash back, points, and miles. Some cards offer the same “earning rate” across all purchase types, while others provide extra rewards in certain specific categories, such as gas, groceries, or travel.

It's also common for cards to offer initial rewards “bonuses”. Next are low-interest credit cards. These are credit cards that either offer a low introductory rate on balance transfers, or a low intro rate on new purchases. Regular credit card APRs tend to be pretty high.

In addition, some credit cards require users to put down a refundable security deposit, the amount of which usually becomes the account’s spending limit. These so-called secured credit cards are easier to get than credit cards with no deposit needed, which makes them a good choice for people with limited or bad credit. Finally comes credit cards with and without fees.

Credit cards are known to charge a number of different fees, ranging from annual membership fees and balance transfer fees to foreign transaction fees and cash advance fees. In most cases, a credit card’s annual fee is the only fee you’ll need to concern yourself with.

Whether you decide to get a card with an annual fee depends on how the rewards and APRs compare to the no annual fee alternatives. There are lots of different types of credit cards and more than 1,500 individual offers available.

But all that matters is finding the right one for your needs. You can go to WalletHub to compare the best offers and find the right card for you by clicking the button here.

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