Credit cards are designed to make our lives easier, at least in terms of finances. However, things may be more complicated than they look, and you may be confused by the wide range of available cards on the market. There are many possibilities available, making it difficult to select one.

The good news is that you don’t have to know everything about every single card on the market. Just choose which type of credit card could be suitable for your needs, and then focus on finding the best fit for your lifestyle and budget.

So how to choose the right one? Sorting credit cards by type is an excellent place to start. Each card will often fall into one of the ten categories listed below: rewards, cash back, travel, premium, business, student, 0% initial purchase APR, secured, co-branded, and store cards.

To help you pick the right credit card, we will discuss the top four categories of credit cards.

1. Rewards credit cards

Rewards credit cards often offer points or cash back based on a percentage of your spending. Some cards provide extra points for popular purchases such as groceries, gas, and dining out.

People who pay their monthly amounts in full and on time don’t have to pay credit card interest with rewards credit cards. Many reward cards are only available to people who have good or excellent credit.

Rewards cards also usually offer several options to redeem your points. For example, by using a rewards credit card to cover your basic purchases, such as groceries and household supplies, you can receive cash back and travel rewards for purchases that you would have made otherwise.

Examples of the best reward credit cards are:

• Bilt Mastercard® – Ideal for renters
• American Express Blue Cash Preferred® Card – Ideal for everyday purchases
• Citi Premier® Card – The best card for earning travel rewards on everyday transactions.

2. Cash-back credit cards

Cash-back credit cards refund you a percentage of the amount you spend on the card. Some cash-back credit cards provide a set rate of cash back on all purchases, such as 2% back on every dollar spent. Or they may offer bonus categories, such as 3% back on eating and 1% back on everything else. Some even provide quarterly bonus rewards in rotating categories, as well as a set rate of rewards on all non-bonus purchases.

Many cashback credit cards have no annual fee, but those with more substantial bonus offers and rewards programs charge modest yearly fees—usually under $100—that you can easily make up for with use.

If you spend more in certain areas, such as groceries or restaurants, search for a card that offers bonus categories rather than a flat-rate card, which is perfect for consumers with varying spending.

Examples of the best cash-back credit cards are:

• Citi® Double Cash Card – the best option for flat-rate cash back.
• Discover it® Cash Back – Ideal for rotating cash back categories
• Capital One SavorOne Cash Rewards Credit Card – Best for dining cash back

3. Travel credit cards

Travel credit cards provide rewards that can be used to pay for travel expenses like airline tickets and hotel rooms. Other travel-related advantages, such as travel insurance or priority service, may be available with these cards. Some travel credit cards also allow you to earn points inside a specific program, such as a program for frequent travelers or a hotel loyalty program.

Travel credit cards can vary significantly. Some earn miles or points that can be transferred to many airline or hotel programs, and some give points or miles that can only be used for one partnered airline or hotel company. A few travel credit cards even give benefits for other types of purchases, such as gas or meals. Some travel credit cards also include sign-up rewards, and many, but not all, charge an annual fee.

Examples of the best travel credit cards are:

• Capital One Venture Rewards Credit Card – ideal for flexible travel rewards
• Chase Sapphire Preferred® Card – The best beginner travel card
• American Express® Gold Card – ideal for travel dining rewards.
• Discover it® mileage – ideal for first-year miles bonus

4. Business credit cards

Business credit cards allow clients to separate their personal and business costs while earning rewards on all business spending. Business credit cards, like personal rewards cards, might be cash-back credit cards, general rewards credit cards, travel credit cards, or even secured credit cards. To be eligible for a business credit card, you must own a business or engage in an income-generating activity.

In general, a good business credit card allows you to get the most out of your daily expenses and makes running your business easier. Look for a credit card that offers a significant rewards program, tracking of expenses capabilities, and features that can help you save money. Some business credit cards provide a fixed rewards rate for all purchases, while others reward common company expenses, such as travel or internet services, at higher rates. When it comes to cashing your rewards, most business credit cards allow you to convert your points for cash back or airline miles.

Examples of the best business credit cards are:

• The American Express Blue company® Plus Credit Card is ideal for everyday company needs
• Ink Business Unlimited® Credit Card – The best credit card for earning unlimited cash back
• American Express Blue Business CashTM Card – The best business card for new businesses

Conclusion

Choosing the ideal credit card for yourself depends on your specific needs, financial position, and even life stage. Furthermore, the timing of your credit card selection can influence which option is better. The best credit card for you is one that combines rewards, advantages, fees, and other features that can help you improve your financial status. Check the requirements for credit and features of the card before applying to ensure that they meet your demands.