What Is a Credit Card?

There are many different types of credit cards, each with its unique advantages and drawbacks. Here are a few of the most popular types of cards that may fit your particular financial situation.

Rewards cards

A rewards card is a credit card that will give you something back every time you use it. With this type of card, you can earn cash back, points, or miles on every purchase, depending on your specific card.

Cash back credit cards

As the name suggests, these cards will give you a certain percentage of cash back on every purchase. These can be:

• Flat-rate cash back cards, which give you the same percentage back on all purchases.
• Bonus category cash back cards, which give you a higher cash back rate on specific purchase categories.

Travel rewards credit cards

This type of card rewards you with points or miles on travel-related and other purchases. You can use those points or miles to pay for flights, hotels, rental cars, and other travel expenses. Some examples of travel rewards cards include:

• Airline credit cards, which are co-branded with a particular airline and usually come with perks like free checked bags, priority boarding, and in-flight discounts when flying on that carrier or its partners.
• Hotel credit cards, which are co-branded with a particular hotel chain and offer perks like free nights, room upgrades, and late checkouts.
• Generic travel rewards cards, which don’t have any airline or hotel affiliation but come with perks like travel insurance, lounge access, and concierge services.

Retail rewards cards

Retail rewards cards are co-branded cards that retailers offer with perks like discounts, free shipping, and exclusive sales.

Credit cards for credit building or bad credit

If you don’t have a credit history or if you have bad credit, you’ll need to choose one of the following types of credit cards:

Secured credit cards

With a secured credit card, you need to put down a deposit – usually equal to your credit limit – before you can use the card. This deposit acts as collateral in case you can’t make your payments, so it’s like getting a loan from yourself. 

The good thing is that, even though it’s not technically a loan, all your transactions affect your credit history, so you can use these cards to start building your credit from the ground up.

Apply for a Chime Credit Builder Secured Visa® Credit Card to start building credit with everyday purchases and on-time payments.¹

Prepaid credit cards

These are similar to secured cards in that you load money onto the card in advance, but they don’t show up in your credit history.

Cards for specific cardholders

Some cards are designed for a particular type of user:

Student credit cards

These cards cater to students. They come with lower credit limits and APRs than other cards; some offer rewards or cash back on school books and supplies.

Business credit cards

Business cards are designed for business expenses and often come with special rewards, such as cash back on office supplies or gas. They also tend to have higher credit limits than personal cards.

Other types of credit cards

Balance transfer credit cards

Balance transfer credit cards offer a 0% APR introductory period on balance transfers. One way you could use a balance transfer credit card is to transfer your debt from other high-interest credit cards and pay it little by little without paying interest for the introductory period.

Low APR credit cards

These cards come with a low APR – usually below 20%. You’ll save on interest if you carry a balance from month to month.