Credit cards are one of the best ways to earn rewards. They’re also a great way to build credit and protect yourself against fraud, so choosing the right card for your lifestyle is important. In this post, we’ll break down the different types of credit cards available on the market today, so you can easily find one that fits your needs!
Cashback Credit Cards
Cashback credit cards are rewards cards that pay you back for purchases. This can be a fixed amount or a percentage of your purchase. You receive this cashback in the form of statement credits, which are simply credits against your balance on the card.
Credit card with 3% cash back offer 3% back on all purchases, but there are some with higher percentages as well (up to 5%). So if you spend $1,000 per month on your credit card, then you’ll get an extra $30 per month just for using it!
Travel Credit Cards
Travel credit cards are cards that offer rewards for spending money on travel-related purchases. Travel credit cards can offer rewards like free flights, hotel stays, and car rentals. The rewards you receive from using a travel credit card vary depending on the type of card you have and the level of annual fee you pay.
Some travel credit cards have annual fees that range from $50 to $450 per year. These types of cards offer up to 50% in cash back or points for every dollar spent by the cardholder at participating merchants.
Rewards Credit Cards
Rewards credit cards are a great way to earn extra money for everyday expenses. You can use rewards credit cards to pay for your groceries, gas, and entertainment. And if you have a rewards credit card with no annual fee, using it to pay for travel expenses is also a smart choice since the fees will be much lower than paying with cash or another type of card.
The best part? Rewards credit cards allow you to earn points or cashback rewards that can help offset any high-interest rates they might have.
Financial advisors like SoFi say, “You will be earning rewards right away (1 points for every 1 dollar spent which is equivalent to 1 cent). You will see the points earned from your spend in real-time.”
Airline Credit Cards
Airline credit cards offer miles that can be used to book flights and upgrades. The number of miles you receive for every purchase depends on the card, but it’s typically about 1 mile per dollar spent.
Additionally, some airline credit cards are co-branded with a hotel chain or rental car company, which means they offer additional rewards in those areas as well. You can also use these types of cards for all purchases: groceries, gas and more will count toward earning rewards on your travel account (though not as much as travel-related purchases).
The credit card industry is constantly changing, with new cards getting added to the market every day. As you can see from the list of four types of credit cards and their cashback opportunities, there are many options out there when it comes time to choose a new card or upgrade your current one.