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Here are the 4 Different Types of Credit Cards You Need in Your Wallet

Using multiple credit cards can add value to your everyday spending. Here are the different types of credit cards to consider having in your wallet.

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There are a lot of benefits to having multiple credit cards. But as you determine which cards to add to your wallet, it’s important to consider different types of credit cards, so you can take advantage of varying rewards rates, bonuses and benefits.

Here are four types of credit cards to consider getting, so you can get as much value from your everyday spending as possible.

Cash-Back Credit Card

Cash-back credit cards offer a lot of flexibility when it comes to redeeming your rewards. If you don’t want to restrict yourself completely to travel rewards or general credit card points, cash back is a great way to go. 

Also, many cash-back credit cards offer introductory 0% APR promotions, so if you’ve got a big purchase coming up or you’re looking to pay down a high-interest balance, the right card can give you that intro 0% APR benefit along with some excellent cash-back rewards.

Finally, for the most part, the best cash-back cards don’t charge annual fees, so you can hold onto them for years without ever needing to justify their yearly cost. While there are some exceptions, such as the Blue Cash Preferred® Card from American Express, you’ll usually get enough value from the card to make up for that annual fee.

To pick the right cash-back credit card, think about your spending habits and also your preferences for rewards. Some cards offer excellent bonus rewards rates on select everyday spending categories, while others offer a single high rewards rate on everything. Compare top cash-back credit cards to determine the right one for you.

Hotel Credit Card

Hotel credit cards provide special benefits that you can’t get with most other types of travel credit cards. For starters, you’ll typically get elite status without needing to book several stays with that particular hotel brand. Depending on the card and hotel rewards program, status benefits can include free room upgrades, late checkout, welcome amenities, free breakfast and more.

You can also earn rewards that you can use directly to book hotel accommodations every time you travel, and most of these cards come with large welcome bonuses when you first sign up and meet the spending requirement.

But what makes hotel cards so valuable is that many of them offer a free anniversary night’s stay every year when you redeem your card membership and pay the annual fee. In most cases, the value of the free night far outweighs the cost of the annual fee. So even if you don’t travel often, the free night benefit is enough to justify paying the card’s annual fee every year.

As you search for the right card, consider going with a hotel brand that you enjoy staying with. Alternatively, you could open multiple hotel credit cards and take advantage of free nights at more than one brand’s properties.

Airline Credit Card

Like hotel credit cards, airline credit cards can offer some unique benefits, but for a specific airline instead of a hotel brand. Common airline credit card perks include priority boarding, discounts on certain in-flight purchases and free checked bags. 

The free checked bag benefit alone can make an airline card worth it, especially if you regularly travel with a partner or a whole family. In many cases, you’ll get a free checked bag for you and multiple others on your itinerary. 

Airline cards also offer you the chance to rack up points and miles fast, which you can use to earn award flights more quickly. However, most airline credit cards don’t have standout rewards programs, so it’s generally best to use them for their airline-specific benefits.

As you try to decide which airline card is best for you, take a look at your local airports and figure out which airlines use them as a hub. You can generally find more flights and better deals on an airline if you live near one of its hub airports.

Transferable Rewards Credit Card

While hotel and airline credit cards offer special benefits that you can use with specific hotel brands and airlines, they don’t offer a ton of flexibility. If you want to diversify your credit card rewards even more, consider a card with transferable rewards.

There are a handful of rewards programs like this, including Amex Membership Rewards, Capital One Miles, Chase Ultimate Rewards and Citi Thank You Rewards. 

These travel credit cards tend to offer a ton of flexibility with your rewards. For example, you may be able to book travel through the card issuer’s travel portal, book with other travel providers and get a statement credit or even transfer your rewards to another loyalty program.

Chase, for instance, has a list of several airline and hotel rewards programs that you can transfer your rewards to. Because many airlines and hotel brands offer dynamic pricing with their rewards programs, you could potentially get a lot more value out of your transferable points than you could with points and miles from a co-branded credit card.

To find the right transferable rewards credit card, take a look at the different programs and determine which offers the best level of flexibility for you. Also, consider each card’s welcome offer, rewards rates and travel-related perks.

The Bottom Line

Carrying multiple credit cards at the same time can come with a lot of benefits, especially if you have different types of cards. This strategy can allow you to take advantage of bonus rewards rates on more of your top spending categories, as well as diverse benefits that you can’t necessarily get with just any credit card.

Be careful, though. The more cards you add to your wallet, the harder it is to keep them organized and to track your transactions. Make sure you have a system in place to ensure that you always pay your bills on time and in full to avoid late fees and interest charges.

While we work hard on our research, we do not always provide a complete listing of all available offers from credit-card companies and banks. And because offers can change, we cannot guarantee that our information will always be up to date, so we encourage you to verify all the terms and conditions of any financial product before you apply.

Ben Luthi
Ben Luthi
Ben Luthi is a personal finance and travel writer and credit card expert. He has a degree in finance from Brigham Young University and worked in financial planning, banking and auto finance before writing full-time for NerdWallet and Student Loan Hero. Ben is now a full-time freelance writer and enjoys traveling and spending time with his two kids. His work has appeared in several publications, including U.S. News & World Report, USA Today, Money, Success and Slickdeals.

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