If you think credit cards are all the same thing and work just for spending money, think again. There are different types of credit cards!

You can pick a credit card that serves you better depending on your situation, credit, and goals. Keep reading, and you’ll be able to choose right.

Generally speaking, credit cards are indeed made to buy things. It is a way to buy now and pay later, which can be very convenient.

But credit cards will differ on a few things. For example, the way you apply for them and the eligibility requirements.

There are also credit cards with rewards and benefits and ones with none. Of course, most of the time, you should aim for the ones with rewards.

Finally, among the rewards credit cards, there are different types of rewards too. Each one of them will fit a different lifestyle.

In the following, we’ll tell you more about each. Avoid picking the wrong credit card. Find one that suits you!

The first aspect distinguishing types of credit cards is how you apply for them and their eligibility requirements.

Depending on your credit score and financial background, the credit card issuer might ask you for collateral to give you a credit line.

Let’s see the pros and cons of a secured credit card versus an unsecured one.

These are the easiest types of credit cards you could get. But that’s because you’ll have to pay for it. Let’s explain this better.

A secured credit card requires you to make a security deposit. This deposit is refundable, and you can get it back once you pay the credit card balance.

This type of credit card is a good option for poor credit scores.

While secured credit cards require a security deposit, unsecured ones do not. The issuer relies on your creditworthiness to give you the card.

Now, the better your credit score and financial background, the better the credit card and its interest rates will be.

If you have a low credit score, you’ll have difficulty accessing better credit cards – like the ones with rewards and travel benefits.

Financial banks and credit unions issue credit cards designed for people with low income and credit scores.

Usually, this type of credit card has a higher interest rate and maintenance fees. But as you build a positive credit score, you can upgrade to a better one.

For sure, the most desired types of credit cards are the ones with rewards.

After all, who doesn’t want to get a piece of their money back into their pockets somehow?

With these cards, your purchases turn into rewards. Generally, there are three types of purchase rewards.

Points are a very flexible form of reward. Each program has its rates, and you’ll get several points for every dollar you spend.

You collect points to exchange for various benefits such as gifts, services, discounts, etc.

Some programs even allow you to redeem your points as cash back, a statement credit, or travel perks.

This type of reward sounds good, right? Getting a percentage of the cash, you spend back into your account.

Cards with cashback are popular. Some offer different bonus categories to give you extra cash whenever you swipe your rewards credit cards.

In that case, you should always look for a card with bonus categories that fit your lifestyle.

It can be grocery shopping, restaurants, gas, streaming services, etc.

Back in the day, when credit cards were less popular, mileage programs were considered a luxury.

With this type of credit card, your expenses turn into miles, and you can redeem these miles for travel perks.

Some of the most expensive and exclusive credit cards are the travel ones. Traveling is a dream for many people, and not everyone can afford it.

Some travel credit cards can cost thousands of dollars per year. They are usually in the “black credit cards” category and full of VIP perks.

But, of course, not every travel card is expensive. You can find more humble versions with affordable fees but less-luxury benefits.

The perks range from miles and discounts to VIP airport lounges, complimentary tickets, elite status, personal travel assistance, and more.

With so many options, deciding which type of credit card you should apply to can be hard. But there is a simple way to decide.

Take a good look at your financial situation and your lifestyle. If you’re short on cash, do not pick a credit card with high fees, even with good benefits.

You might prefer cash back for everyday expenses if you’re not a frequent traveler.

Not everybody will have many options. Sometimes, all you can get is an unsecured credit card with a $300 credit limit and no rewards. And that’s ok!

Now that you know which types of credit cards exist, it is time to learn more about it! Up next: find out how the Mastercard Concierge program works!