Not all credit cards are created equal. Whether it’s rewards, low-interest, balance transfer, or credit building you’re after, there are different types of credit cards to help you reach #goals. But which one is right for you? 

Let’s break down the seven types of credit cards and where to find them. For example, visiting your local credit union could snag you better terms and features on credit union cards than you’d find with other lenders—no matter what type of credit card you seek.

1. Reward credit cards

Rewards credit cards do just what you’d think: They give you incentives for using the card to make your purchases. Usually, you earn points for each dollar spent and then redeem them for rewards like gift cards, hotel visits, cool merch, entertainment, and more. 

Terms for rewards credit cards are typically geared toward users with FICO credit scores in the “good” to “excellent” range — think at least 670, but often above 740. So, if your score is lower or you’re still building your credit, a different type of credit card might be better. Likewise, if you tend to carry over a balance from month to month, this may not be the card for you.

Even if you qualify for a rewards card, they aren’t for everybody. Earning rewards rocks, but boutique gift cards or earbuds won’t help you see the world or dig out of debt. Other types of credit cards may better suit your personal and financial goals. 

2. Travel credit cards

Got a bad case of wanderlust? A travel credit card could be the cure.

Travel credit cards earn rewards that cover the cost of flights, baggage fees, lodging, and other trip-related expenses. Some cards deal only in airline miles, while others let you use incentives more broadly. Like rewards cards, most travel cards are reserved for customers with credit scores north of 670. 

Many travel credit cards offer higher returns for travel-related purchases, so you can save for your next trip while you’re still chillaxing on the beach. Others give foodies higher incentives for dining or grocery purchases. Some top-tier travel cards throw in perks like seat upgrades, travel or rental car insurance, and airport lounge access, but they will likely charge a higher annual fee. Those with low or nonexistent fees are more restrictive and offer fewer perks. 

For many of us, once-in-a-lifetime trips happen, well, about that often. So, if you’re saving points for a dream vacation, know the rollover and expiration terms. And make sure they align with your travel habits because you’ll likely lose your miles if you cancel.

3. Cash-back credit cards

You work hard for your money. Cash-back credit cards make your money work hard for you, too. 

Cash-back cards give you money back for every dollar you spend using the card. Most cards offer between one and two percent per dollar spent. Some give you higher returns when you buy gas, meals out, groceries, or other specific purchases. These special perks may be permanent or vary by month.

You can get your cash back in several ways, like a paper check (they do still exist), credit on your monthly statement, or deposits in your bank account. Some even let you apply reward cash directly toward purchases from popular online retailers. 

These cards tend to benefit no-frills spenders with credit scores between 670 and 850. They work best for customers who pay off their balance each month — some penalize customers who carry a balance or make late payments.

4. Balance transfer credit cards

If you’ve racked up some debt, balance transfer cards can be a great tool for digging out — as long as you pay attention to the terms. Balance transfer cards let you move a balance from cards with a higher interest rate to one with a lower rate. Most require a credit score of around 670, although customers with slightly lower scores may get approved. 

You can often score a promotional period with zero interest. If you do, try to pay it off before that period expires. But make sure the new card reverts to a relatively low interest rate. Life happens, and you don’t want to be stuck with a suddenly high rate. 

If you go this route, remember that balance transfer cards usually tack on a fee of three to five percent of the balance to move the sum from one lender to another. 

You’ll probably need another card for day-to-day expenses since promotional interest rates don’t usually apply to new charges. And keep in mind that some cards apply your payments to new charges first, which prevents you from chipping away at your high balance while the promo-interest clock is ticking.

If you’re still contemplating, “How many credit cards should I have?” remember most experts say two to three is fine. In fact, successfully making payments on multiple cards can actually help boost your credit score.

5. Zero APR or low-interest credit cards

Zero APR or low-interest credit cards can be good if you have debt monsters to slay. They’re similar to balance transfer cards, offering a zero percent APR (annual percentage rate) for a set period. After that, your balance starts collecting interest, but at a lower-than-average variable rate.

For example, most credit cards have an APR between 14 and 20 percent, according to federal statistics. Numbers for low-rate cards may start in the upper single digits and top out at around 18 percent. So, they’re suitable for individuals who need to carry a balance, which can happen to anyone, despite their best intentions. 

Since these types of credit cards are meant to cut debt, most don’t offer incentives that reward extra spending. Lenders like to see a credit score of 670 or higher for these cards, although slightly lower may not be a deal-breaker. 

6. Credit-builder or student credit cards

What if you aren’t blessed with that magical 670 FICO number? After all, no one is born with good credit. So, what credit cards are suitable for people with bad credit? Or for people who don’t have any credit yet?

In both cases, credit-builder cards are an excellent place to start. Since they don’t require credit history, you can use them to build credit or repair credit if you’ve been turned down for cards. You can even get them if you’re below the dreaded 580 FICO scoreline. 

Keep in mind that you’ll probably have to deposit cash to open a credit builder account, and your credit limit depends upon the amount you deposit. Some have an annual fee, but it could be a small price to pay in exchange for a lower interest rate when you apply for a loan later.

If you’re an undergrad who just needs to create a financial track record, a student credit card may be the best option. They’re more convenient than cash and can be a lifesaver if you have an emergency far from home. However, while you can legally apply for a credit card at age 18, you may have difficulty getting approved for a non-student card without a co-signer before your 21st birthday, especially if you aren’t employed.

Neither credit builders nor student credit cards require credit history, but many feature higher-than-average interest rates. Hopefully, this pushes you to create good financial habits and avoid carrying a balance. A handful of student cards offer rewards, but honestly, responsible use is a higher priority at this stage of the game.

7. Co-branded credit cards

If you’re influencer-level loyal to your favorite shop or restaurant, it might be a good idea to check out a co-branded credit card. 

Popular retailers and credit card companies jointly issue these cards. You can use them at the store issuing the card — but not just at that store. Most give you rewards for every dollar you spend using the card and offer higher return rates when you shop at the issuing retailer. 

With a co-branded store card, you can score access to special sales and discounts and even perks at partner shops. Generally, though, rewards accrue for use at the issuing retailer. Back in the day, only department stores offered co-branded cards. But now, many of your favorite specialty shops, discount warehouses, and restaurants offer them, too. 

Maybe travel, not fashion, is your passion. If so, an airline-specific card may be a better choice. This is where co-branded cards can overlap with travel credit cards. Most airline cards award customers miles per dollar spent, with increased returns on travel purchases and other specific categories. Cardholders may also enjoy baggage benefits, upgrades, early boarding, and access to member lounges. 

While some airline cards let you transfer rewards, you get the most bang for your buck when you fly the issuing airline. So be sure it departs from your home airport and covers plenty of destinations. Most major airlines have their own cards, but even budget carriers are starting to join the party.

Once you land, you’ll need somewhere to stay, too. That’s where hotel-issued credit cards come in. These cards let you earn points for free nights, and can really pay off for frequent travelers, depending on the number of hotel locations. Some hotel cards also partner with rental car companies, airlines, and cruise lines for extra incentives.  In addition, many offer free anniversary stays as a bonus. 

Some, but not all, co-branded cards charge annual fees. This means you better like shopping there and take advantage of all its perks to make it worthwhile. A cash-back card may be a better choice if you want more flexibility. And terms of these cards, like other rewards-style credit cards, most benefit customers with higher credit scores who pay off their monthly balance. 

Further resources on types of credit cards

Looking for a deep dive into credit card types and related information? Check out these sites.

• Raise your credit score. Lower credit score making it hard to get approved? Check these tips for boosting your stats. 

• Know when to get a card. It’s OK if you need schooling on student credit cards. Get the 101 here. 

• Manage revolving debt. Is unpaid revolving credit making your budget spiral out of control? Here’s one way to slow the spin.

If you’re ready to level up financially, it may be time to check out your local credit union. No matter what type of credit card you need, credit unions have something that will fit the bill — and help you lower yours. In fact, credit union credit card rewards are often some of the best around. 

You can find credit union credit cards that fall into most credit card categories, including cash back, rewards, balance transfers, and even specialty cards like ones exclusive to military members.

Did you know?

Allergic to fees? Consider getting your next credit card from a credit union. Unlike traditional banks, these not-for-profit institutions often use their surpluses to cut credit card fees and interest rates, where they prioritize passing profits along to shareholders.