1. Rewards credit cards

As the name implies, rewards credit cards reward you for making purchases and paying bills. They’re a way for you to save money while spending money. They may give out rewards at fixed or boosted rates depending on what they’re being used for.

Rewards credit cards usually give out rewards in the following three forms:

1. Cashback: This type of credit card offers you a percentage of your cash back after each purchase. The cashback stays on your card, and you can use it to lower your balance owing or to make purchases. 
2. Card points: Instead of giving you cashback rewards, some cards give you points that you can redeem for cash or other exclusive benefits. 
3. Travel miles: These are popular with airline-branded credit cards. They offer miles that you can redeem on flight tickets.

When to use a rewards card

Your rewards credit card should be the card you use for regular expenses and payments, such as groceries, bills, and subscriptions. The type of rewards program you should sign up for depends on your purchasing habits. For example, if you travel frequently, consider a credit card that offers you travel rewards. 

You can have multiple cards of this type if you want to take advantage of different deals. 

For example, one may give you 2% back on groceries, but only 1% on everything else. So, if another card gives you 2% back on only fuel purchases, it can make sense to carry both. 

Just keep in mind that the more cards you have, the harder it gets to manage them all. Of course, when it comes to online shopping, Kudos can help with this. 

Five popular rewards cards to consider and why

• Wells Fargo Active Cash Card: This card comes with no annual fees and offers 2% cashback rewards on all purchases. You can also redeem your rewards as cash at any Wells Fargo automated teller machine (ATM) or as gift cards.

• Chase Sapphire Preferred Card: This travel card offers points as rewards that you can redeem for cash (at a one-point:one-cent ratio) or for travel (at 1:1.25). Under certain conditions, you can get as much as two cents for each point on this card. Currently, this card also offers a generous, 80,000-point welcome bonus — or about $1,000 worth of bonus miles. (You have to spend at least $4,000 using the card in the first three months to get this bonus.) 

• American Express Blue Cash Preferred Card: With this card, you'll earn 6% cashback when you buy groceries in the United States. This offer allows you to earn up to $6,000 per year on rewards before reverting to 1% cashback for the rest of the year.

• Citi Custom Cash Card: This card offers 5% cashback on major spending categories — up to $500 per billing cycle. It also offers a $200 welcome bonus and an introductory balance transfer APR of 0% for the first 15 months.

• American Express Gold Card: Ideal for food enthusiasts, this card offers 4x points on Uber Eats and other dining services.

2. Zero- and low-interest credit cards

Zero- and low-interest credit cards stand by you when unexpected expenses or situations force you to incur debt on your credit card. 

They offer you a way to pay off your outstanding balance with minimal or no interest. Most of these cards come with an introductory rate of 0% that lasts for some time and later offer low regular APRs.

This should be the type of card you turn to in an emergency — not your regular credit card, since these types of cards usually won’t offer any rewards for using them. 

When to use a zero- or low-interest credit card

A zero- or low-interest card is ideal for performing balance transfers. Because it offers such low APRs, you can transfer debts from other credit cards to it and pay them off with little to no interest.

Note that the 0% APR is only temporary, usually covering only the first 12 to 21 months. So the trick is to utilize this period as much as possible to pay off all — or at least most — of your debt.

A zero-or low-interest credit card can also help you make major, unexpected purchases that you can't afford to pay off within one billing cycle. 

Five popular zero- or low-interest cards to consider and why

• Wells Fargo Reflect Card: This card offers 0% APR for the first 18 months and gives you a 3-month extension for on-time minimum payments. 

• Discover It Cashback Card: This card allows a 0% purchase and balance transfer intro APR for the first 15 months, and then a regular APR of as low as 12.24%. Other perks include up to 5% cashback and no annual fee. 

• Chase Freedom Unlimited Card: This card doesn't charge an annual fee and offers a 0% introductory APR for 15 months. On top of that, it offers users cashback rewards of up to 5% in various purchase categories. After the first 15 months, the APR ranges between 15.24% and 23.99%.  

• US Bank Visa Platinum Card: With this card, you get 0% introductory APR for 20 billing cycles (or 20 months). However, it doesn't offer many perks apart from that. 

• Citi Diamond Preferred Card: This card offers 0% introductory APR for 12 months (for purchases) and 21 months (for balance transfers). 

3. Credit-building cards

These cards are meant for those just starting on their credit card journey. While they may not offer as many perks as rewards or low-interest cards, they have relaxed requirements and usually come with no annual fees.

Most credit-building cards are secured cards, meaning that you’ll have to put in a security deposit before using one. After putting down the deposit, you may get between 50% and 100% of your collateral as your credit limit.

Student credit cards can also function as credit-building cards since they don’t require excellent credit scores or charge annual fees.

‍When to use a credit-building card

Here are three scenarios where a credit-building card might be worth carrying:

1. If you're just starting on your credit card journey: If you have no credit history, most credit card issuers won’t accept you. In this situation, a credit-building card will help you gradually build up your credit score until it is high enough for you to apply for other types of cards.

2. If you're an international student studying abroad: Foreign students in the US often find it hard to get cards that don’t ask for their social security number. Fortunately, most credit-building cards don’t do this, making it easier for you to get one. 

3. If you have a bad credit score: Perhaps you racked up debt and damaged your credit score as a result. You now need to rebuild your score, but you are finding it difficult to do so. In this situation, you need a credit-building card.

Five popular credit-building cards to consider and why

• Capital One Platinum Secured Credit Card: This card allows you to spend up to $200 with an initial deposit of $49. It doesn't come with an annual fee (see rates & fees), but it also doesn’t offer any cashback rewards.
• Discover It Secured Credit Card: This card offers cashback rewards (up to 2%). It also allows you to upgrade to an unsecured card after seven months if you pay your bills on time.
• Discover It Student Cashback Card: Made specifically for students, this card comes with up to 5% cashback rewards. It offers cashback in quarterly rotating categories up to $1,500 in value, and it’s also a fee-free card.
• Capital One Quicksilver Secured Cash Rewards Credit Card: This card requires a deposit of $200 and offers a flat rate of 1.5% rewards (see rates & fees). It doesn't charge an annual fee but has a rather high regular APR of 26.99%. 
• PETAL 2 "CASHBACK NO FEES" Visa Credit Card: This is an unsecured credit card with no need for a credit score. Therefore, you don’t need to put down collateral before using it. Additionally, it doesn’t charge an annual fee, and it allows you to earn up to 1.5% cashback on eligible purchases.

4. Private label and co-branded cards

Unlike traditional credit cards, which you can use anywhere, private label cards are issued by private companies and can usually only be used at a specific company or store. They don't carry the brand logos of credit card companies.

Co-branded credit cards, on the other hand, bear the logos of both the private company and the credit card company. This makes it possible to use them wherever the credit card company is allowed, even outside the original store.

‍When to use a private label card

If you are loyal to a particular brand, a private label card will come in handy and allow you to save some money as you use the brand’s service. 

You can also use a private label card to build up your credit history within your favorite store and then use that history to apply for major credit cards.

‍Five popular private label/co-branded cards you should consider and why

• Target's RedCard: This card offers 5% off purchases and can be used at any Target store as well as online. However, it comes with a 22.9% APR.
• Amazon Store Card: If you frequently purchase items on Amazon, this card will be right up your alley. It offers 5% cashback for Amazon Prime members and an up to 15% additional bonus on select items.
• Hilton Honors American Express Card: If you're a frequent hotel user, this card may be for you. It is a co-branded card with no annual fees and an 80,000-point bonus equivalent to about $480 worth of hotel nights.
• Capital One Walmart Rewards Mastercard: If you regularly shop at Walmart, this card can work for you. It comes with no annual fees and gives you 5% purchase cashback at Walmart's online store and 2% cashback at its physical stores.
• Delta Skymiles Platinum American Express Card: If you frequently fly with Delta Airlines, this card will save you some money. It has a welcome bonus of 50,000 miles and an APR of as low as 16.49%. However, its annual fee is quite high at $250.

Conclusion

Now you know the four major types of credit cards worth carrying. Depending on your needs, your credit score, and the amount of debt you have to pay off, you can juggle between a rewards card, a zero-low interest card, a credit-building card, and/or a private label card.

Watch out for the APR, though, as well as other variables such as foreign transaction fees, balance transfer fees, and late payment penalties to avoid unknowingly incurring credit card debt.

If you're still not sure what choice to make, just add Kudos to your browser extension and let it sift through thousands of cards to find the one that best suits your checkout needs.