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Types of Credit Cards

Last Updated: January 15, 2024
4 min read
Getting a credit card

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Key points about: different types of credit cards

  1. Some credit card rewards programs offer fixed rewards rates, while others have bonus perks in specified spending categories.

  2. Student and secured cards can help users with no or limited credit history build responsible habits.

  3. Credit cards with 0% introductory interest rates provide some relief from accruing interest.

There are many types of credit cards available, each with their own perks, requirements, and conditions. With so many credit cards, how do you pick which one is best for you?

It all depends on your personal financial situation, along with how you anticipate using your card—whether for travel, everyday spending, or something else. There’s likely a card out there for you, no matter if you have an established credit history or are just starting out.

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Different types of credit cards are best for different uses

When weighing credit card options, it helps to consider your goals. For example, you can decide whether you want to maximize rewards on eligible purchases by getting a rewards credit card, build credit history, or pay down accumulated credit debt.

Credit cards with fixed rewards

Some types of credit cards offer a fixed rewards rate on all eligible purchases, regardless of category. This means that no matter how you spend with your card, you’ll get a constant, specified amount of redeemable value in return, such as miles or cash back rewards.

The Discover it® Miles Card, for example, offers 1.5x Miles on every dollar of every purchase, while offering no annual fee. Discover will automatically match all the Miles you’ve earned at the end of your first year.1 Plus, easily redeem Miles as a statement credit for travel purchases or get cash.2

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Credit cards with bonus rewards categories

If there’s a certain type of spending for which you mainly use your credit card, like travel, dining, or gas, you may want to opt for a credit card with bonus rewards on these purchases. These types of credit cards offer higher-value perks in specified categories, allowing you to make the most out of your purchasing habits.

The Discover it® Chrome Gas & Restaurant Card, for example, earns 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases–automatically.3

There’s also the Discover it® Cash Back Credit Card, where you can earn 5% cash back on everyday purchases at different places you shop each quarter, up to the quarterly maximum when you activate

Types of credit cards to build credit

If you have no or limited credit history, you may not be eligible for every type of credit card rewards program. However, there are several card options expressly designed to build a credit history.

Secured credit cards

If you’re starting from scratch or have little credit history, you may qualify for a secured credit card, which allows you to pay a deposit up front up to the amount of your approved credit line. However, if you don’t pay off your secured card’s balance when you close the account, the credit card issuer typically keeps your deposit and applies it to the outstanding balance.

Did you know?

The Discover it® Secured Credit Card has the added perk of offering cash back rewards—earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter.3 And get an unlimited dollar-for-dollar match of all the cash back you earn at the end of your first year, automatically.4

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Student credit cards

If you’re at least 18 years old and are enrolled in a two- or four-year college, you might qualify for a student credit card, which can help newer cardmembers build their credit history without having to put up a security deposit.

Both the Discover® Student Cash Back and Chrome for Students cards come with no annual fee and let you earn cash back rewards.

Types of credit cards to save on interest

Other types of credit cards let you save on interest. For these, look out for low intro APRs on balance transfers and purchases.

Balance transfer credit cards

A balance transfer is when you switch debt from one credit card or loan to another credit card. If you transfer high interest debt onto a card with a 0% introductory APR on balance transfers, you can save money on interest if you pay off the balance before the introductory period expires. It can offer a way to temporarily reduce the interest rate (provided the new card has a lower interest rate) to give you time to pay down the debt.

0% intro APR credit cards for purchases

Some balance transfer credit cards come with the added perk of offering 0% intro APR on purchases, meaning you’ll pay no interest on any purchase during the intro period. There are also credit cards with 0% intro APR on purchases that don’t include a balance transfer intro APR.

Just keep in mind that no introductory period will last forever. Once it expires, you’ll have to pay a higher interest rate on the balance.

What’s the best type of credit card to have?

There’s no single best type of credit card for everyone. Before deciding on a card, you’ll want to compare fees, perks, and terms to determine which is best for your personal financial goals.

Just keep in mind that while you can have more than one card, applying for too many at once can affect your credit score.

Regardless of which card you choose, remember to use it responsibly and aim to pay your balance in full each month. No matter your starting point, this will always put you on the road toward a better financial future.

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Discover® is giving away one $5,000 college scholarship every month until August 2025.6

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See Official Rules for sweepstakes eligibility and entry requirements, entry deadlines and drawing dates, details including odds, list of eligible colleges and universities, prize descriptions and an alternate method of entry.6

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  1. Discover Match®: We'll match all the Miles rewards you've earned on your credit card from the day your new account is approved through your first 12 consecutive billing periods or 365 days, whichever is longer, and add it to your rewards account within two billing periods. You've earned Miles rewards only when they're processed, which may be after the transaction date. We will not match: rewards that are processed after your match period ends; statement credits; rewards transfers from Discover checking or other deposit accounts; or rewards for accounts that are closed. This promotional offer may not be available in the future and is exclusively for new cardmembers. No purchase minimums.

  2. Redeem Miles: Starting at 1 Mile, you can redeem your Miles as a credit to your account to pay for all or part of your bill, for cash as an electronic deposit to your bank account, or for a credit for Travel Purchases made on your statement within the last 180 days. Each Mile is equal to $0.01. Miles cannot be redeemed directly with a specific airline carrier. Travel Purchases include airline tickets, hotel rooms, car rentals, travel agents, online travel sites, commuter transportation, restaurants and gas stations. Restaurant purchases include those made at merchants classified as full-service restaurants, cafes, cafeterias, fast-food locations, and restaurant delivery services. Gas Station purchases include those made at merchants classified as places that sell automotive gasoline that can be bought at the pump or inside the station. Gas Stations affiliated with supermarkets, supercenters, and wholesale clubs may not be eligible. Even if a travel purchase on your statement appears to fit in a Travel Purchase category, the merchant may not have a merchant category code (MCC) in a Travel Purchase category. Merchants and payment processors are assigned an MCC based on their typical products and services. Discover Card does not assign MCCs to merchants. Certain third-party payment accounts and digital wallet transactions may not be eligible for credit redemption if the technology does not provide sufficient transaction details or a qualifying MCC. See Terms and Conditions for more information.

  3. You earn a full 2% Cashback Bonus® on your first $1000 in combined purchases at Gas Stations (stand-alone), and Restaurants each calendar quarter. Calendar quarters begin January 1, April 1, July 1, and October 1. Purchases at Gas Stations and Restaurants over the quarterly cap, and all other purchases, earn 1% cash back. Gas Station purchases include those made at merchants classified as places that sell automotive gasoline that can be bought at the pump or inside the station, and some public electric vehicle charging stations. Gas Stations affiliated with supermarkets, supercenters, and wholesale clubs may not be eligible. Restaurant purchases include those made at merchants classified as full-service restaurants, cafes, cafeterias, fast-food locations, and restaurant delivery services. Purchases must be made with merchants in the U.S. To qualify for 2%, the purchase transaction date must be before or on the last day of the offer or promotion. For online purchases, the transaction date from the merchant may be the date when the item ships. Rewards are added to your account within two billing periods. Even if a purchase appears to fit in a 2% category, the merchant may not have a merchant category code (MCC) in that category. Merchants and payment processors are assigned an MCC based on their typical products and services. Discover Card does not assign MCCs to merchants. Certain third-party payment accounts and digital wallet transactions may not earn 2% if the technology does not provide sufficient transaction details or a qualifying MCC. Learn more at Discover.com/digitalwallets. See Cashback Bonus Program Terms and Conditions for more information.

  4. Cashback Match: We’ll match all the cash back rewards you’ve earned on your credit card from the day your new account is approved through your first 12 consecutive billing periods or 365 days, whichever is longer, and add it to your rewards account within two billing periods. You’ve earned cash back rewards only when they’re processed, which may be after the transaction date. We will not match: rewards that are processed after your match period ends; statement credits; rewards transfers from Discover checking or other deposit accounts; or rewards for accounts that are closed. This promotional offer may not be available in the future and is exclusively for new cardmembers. No purchase minimums.

  5. There is no hard inquiry to your credit report to check if you’re pre-approved. If you’re pre-approved, and you move forward with submitting an application for the credit card, it will result in a hard inquiry which may impact your credit score. Receiving a pre-approval offer does not guarantee approval. Applicants applying without a social security number are not eligible to receive pre-approval offers. Card applicants cannot be pre-approved for the NHL Discover Card.

  6. NO PURCHASE OR CREDIT CARD APPLICATION OR ACCOUNT NECESSARY. Sweepstakes open to residents of the 50 United States (DC) and the US Territories 18 years or older. Sweepstakes starts 9/3/2024 and ends 8/31/2025. See Official Rules for eligibility and entry requirements, entry deadlines and drawing dates, details including odds, list of eligible colleges and universities, prize descriptions and an alternate method of entry. Void where prohibited.

    Sponsor: Discover Products Inc. 2500 Lake Cook Road, Riverwoods, IL 60015

  • Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.