With so many types available today, choosing the right credit card can be confusing. You can earn rewards for cash or points for gift cards or reduced air fare.

Before choosing a credit card, think of your needs and lifestyle. Do you travel frequently? Do you carry high monthly balances? What is your credit score? Let’s check out the types of credit cards as explained by Credit Cards.com.

Cash Back – This card allows you to earn a cash back reward of at least 1% of total purchases made. Some cards pay a higher cash back percentage for specific purchase categories such as gasoline or groceries. Used over time, the cardholder can earn a significant amount of cash. Some banks offer additional cash to customers as a loyalty reward if you deposit the earned cash into their checking or savings account.

Low Interest – If you carry a monthly balance or planning on making a large purchase, this card is a great choice to help save money on interest. Typically, these traditional cards offer a low or 0% interest introductory rate for balance transfers and purchases for several months to a year or even longer before it jumps to the regular rate. If you’re transferring a balance from a higher interest rate card, look for a 0% transfer fee offer. Most cards charge a 3% to 5% fee of the total balance transferred.

Rewards – Similar to the cash back card, the rewards card earns points for purchases. The points can be redeemed for gift cards, merchandise or reduced air fare and hotel stays. These cards are best for those who pay off balances each month since they usually have high interest rates. Also, some of these cards have an annual fee.

Gas Rewards – Most major gasoline brands offer reward cards where points are earned for regular purchases and/or specific purchases such as groceries or auto repairs. These points are used to earn a rebate of 10 or more cents per gallon of gas purchased. Some grocery and wholesale clubs offer reward cards where you earn points based on total purchases that are redeemed at the gas pump to reduce the per gallon price.

Hotel/Travel Rewards – Major airlines and hotel chains offer brand specific reward cards. In addition to earning points for all purchases, bonus points are earned for flying with the respective airline or staying at the respective hotel. Some airlines offer double points for purchasing tickets with that airline as well as priority boarding and waived baggage fees.

Retail Rewards – Major retailers offer credit cards where users can earn discounts and or rewards for purchases.

Secured credit cards – For those with bad or limited credit, these cards help build or rebuild credit history. Collateral in the form of a security deposit is required to cover the amount of the credit limit.

Before applying for any credit card, always carefully read and understand the terms of the account.

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