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Comparing Different Types of Credit Cards: Which Is Best for You?

Different types of credit cards are available from a range of credit card issuers. Credit cards are often differentiated by their uses, such as for cash back, business, and accumulating rewards.

 

It’s important to understand different types of credit cards and their features in order to determine what type of credit card is best for your needs and spending habits.

July 24, 2020 in Learn

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Standard credit cards

There are some standard credit cards that don’t offer any rewards. However, they still come with a credit limit and the ability for you to carry a balance just like most other types of credit cards. Keep in mind, interest charges will be incurred as a result of borrowing money and not repaying the balance in full each month within the indicated timeframe.

Low rate credit cards

Some standard credit cards offer a low introductory annual percentage rate (APR) or a low fixed-rate APR. If you have difficulty paying off your credit card balances or plan to pay off a large purchase over time, a low rate credit card can help you avoid hefty interest payments and save money in the long run.

Reward credit cards

Reward credit cards let cardholders earn points, rewards, or cash back each time they make a purchase, providing incentives to use their cards. However, these cards often have an annual fee.

Cash back credit cards

Cash back credit cards allow cardholders to earn a percentage of each purchase back as cash. American Express® features the SimplyCash™ Card, which allows you to earn cash back on each qualified purchase in the form of an annual statement credit.

Reward points credit cards

Reward points credit cards allow cardholders to accumulate points for their purchases. Points can then be redeemed within the card’s rewards program for merchandise, gift cards, retail products, and more.

Credit cards with no annual fee

Credit cards with no annual fee can be more affordable because they don’t include annual fees just for maintaining the card. However, credit cards with no annual fee may come with less rewards and benefits.

Charge cards

Charge cards have no pre-set spending limit on purchases1 and because your balance must be paid in full each month, it could help you control your spend.

Business credit cards

Business credit cards are similar to personal credit cards, but may include specific benefits for business owners, such as higher credit limits. Business credit cards are useful for separating business expenses from personal expenses and building up the credit history of a business.

What type of credit card is the best for you?

The type of credit card you choose should depend on your spending habits and financial needs. For instance, if you want a credit card that is easy on your budget, you’ll want one with a low annual interest rate and no annual fee.

 

The American Express EssentialCredit Card includes both of these features, making it a great fit for cost-conscious card members that want to save money on interest charges if they choose to carry a balance and make their minimum monthly payments on time.

 

If you are looking to earn cash back from your card purchases, consider American Express SimplyCash Cards, which provide an annual statement credit for a percentage of your annual spending.

 

To join a loyalty program that allows you to earn points on your expenses, American Express offers the Membership Rewards® program on eligible Cards.

 

Once you have found the type of credit card that fits your expected spending, compare the benefits included with each card to calculate the best card for your lifestyle. As your credit journey matures, hosting a mix of cards with diverse benefits can help you get the most out of every charge you make.

 

Explore all American Express Credit Cards to find the best option for your financial needs.

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American Express Offers a range of Cards with different rewards and benefits tailored to your lifestyle and interests.