What kind of Credit card would be best for you?

2023.07.30

by: Savy Desi Team

Take it from me. I have been looking for the best kind of credit for the past couple of months. Since this would be my first credit card and so I thought it had to be the perfect one. However, there are a lot of different types of credits for different people in different parts of their life. So let us break down what are the different kinds.

Categories of Credit cards

  • Cash Back Credit Cards
  • Travel Rewards Credit Cards
  • Balance Transfer Credit Cards
  • Rewards Credit cards
  • Student Credit Cards

Cash Back Credit Cards

Cash back credit cards are immensely popular due to their ability to provide monetary rewards on everyday purchases. These cards typically offer a certain percentage of cash back on eligible transactions, which can vary depending on the card issuer and spending categories. Cash back rewards can be redeemed as statement credits, checks, or bank deposits, enabling cardholders to save money or offset their outstanding balance.

Advantages:

  • Earn cash back on everyday purchases
  • Cash back rewards can be redeemed in various ways
  • Ability to choose spending categories with higher cash back percentages
  • Some cards offer sign-up bonuses for new cardholders

Travel Rewards Credit Cards

For frequent travelers, travel rewards credit cards offer an excellent opportunity to earn points or miles that can be redeemed for flights, hotel stays, rental cars, or other travel-related expenses. These cards often provide enticing sign-up bonuses and ongoing rewards for travel-related spending, making them an attractive option for jet-setters and travel enthusiasts.

Advantages:

  • Earn travel points or miles on eligible purchases.
  • Special perks such as airport lounge access, priority boarding, and travel insurance.
  • Flexibility to redeem rewards across multiple airlines or hotel chains.
  • Some cards offer additional benefits like travel statement credits or concierge services.

Balance Transfer Credit Cards

Balance transfer credit cards are designed to help individuals consolidate their existing credit card debt by offering a low or 0% introductory APR (Annual Percentage Rate) on transferred balances. By transferring balances from high-interest cards to a balance transfer card, individuals can save on interest charges and work towards paying off their debt faster.

Advantages:

  • Introductory 0% APR on balance transfers for a specified period.
  • Opportunity to consolidate debt from multiple cards into a single payment.
  • Potential savings on interest charges.
  • Ability to focus on paying off the principal balance without accruing more interest.

Rewards Credit Cards

Rewards credit cards provide cardholders with points or miles for eligible purchases, which can be redeemed for a wide range of rewards such as merchandise, gift cards, travel, or experiences. These cards often offer rewards on specific spending categories, such as groceries, dining, or gas, allowing cardholders to earn more on their regular expenses.

Advantages:

  • Earn rewards points or miles on eligible purchases.
  • Wide variety of redemption options to suit individual preferences.
  • Special bonuses for meeting spending thresholds.
  • Some cards offer additional perks like purchase protection or extended warranties.

Student Credit Cards

Designed specifically for students, these credit cards cater to young adults who are building their credit history. Student credit cards often have lower credit limits and more relaxed eligibility requirements, making them accessible to individuals with limited credit history or income. These cards provide an opportunity for students to start building credit responsibly and develop good financial habits.

Advantages:

  • Accessible to students with limited credit history or income.
  • Opportunity to build a positive credit history.
  • Some cards offer rewards or cash back for responsible spending.
  • Provides a safety net for emergencies or unexpected expenses.

In conclusion, finding the right credit card depends on your individual needs, lifestyle, and financial goals. With various categories available, such as cash back, travel rewards, balance transfer, rewards, and student credit cards, there is a card tailored to different circumstances.

When choosing a credit card, consider factors such as rewards, fees, interest rates, and any additional benefits or perks offered. It’s important to read the terms and conditions carefully and assess how a particular credit card aligns with your financial situation and goals.

Remember, responsible credit card use is key. Paying your bills on time, keeping your balances low, and using credit wisely can help you build a solid credit history and maintain a healthy financial future.