A Complete Guide to Personal Credit Cards

Everything you need to know about personal credit cards and an easy guide on how to find the best deals available.

Personal credit cards are a form of revolving credit that consumers can use for their everyday spending. These small pieces of plastic not only offer convenience but also a slew of other benefits and perks.

Personal credit cards aren’t right for everyone, though. Before you apply for one, it’s important to understand how they work, their benefits and drawbacks, and how to pick the right one for your needs.

How personal credit cards work

Personal credit cards act as a line of credit that you can use for just about any purchase. They have a credit limit, and you can make purchases with the card up to that limit. Each month, the credit card issuer will provide you with a monthly statement and how much is due.

Credit cards are often the safest and most convenient form of payment. Replacing cash with credit allows you to track your purchases electronically and prevents the loss of cash. Credit cards are also more widely accepted than other forms of payments like personal checks or money orders.”

The minimum monthly payment is typically 1% of the balance plus interest and fees, but we recommend paying off your balance in full each month to avoid interest costs.

Personal credit cards often charge double-digit interest rates, with the Federal Reserve pegging the average rate at 15.32%. As a result, it’s important to use personal credit cards responsibly to avoid high-interest debt.

In addition to making purchases, some credit cards also allow you to do other things, such as transfer a balance from another credit card, get a cash advance from an ATM or finance a purchase with no interest for a predetermined period.

Many credit cards offer rewards and other benefits for using them regularly. Some even offer massive sign-up bonuses worth hundreds of dollars to encourage you to open an account. In fact, 68% of people say that rewards are their top priority in a credit card, according to a report by TSYS.

While these incentives can be appealing, they can get you into trouble if you’re not careful.

The different types of personal credit cards

Credit card issuers offer several types of credit cards to match every type of consumer. Here’s a quick summary of the seven major types of personal credit cards:

1. Cash-back credit cards

These cards offer cash-back rewards when you use them to make purchases. You can typically redeem your cash back in the form of a statement credit, paper check, direct deposit to your bank account, or gift cards.

There are a few different types of cash-back credit cards:

  • Flat-rate cards, which offer a flat rewards rate on all of your purchases.
  • Tiered-rate cards, which offer bonus rewards on certain spending categories.
  • Rotating rewards cards, which offer bonus rewards on certain spending categories that change every few months.

Some cash-back credit cards offer a small sign-up bonus worth between $100 and $200. Most typically don’t charge an annual fee, but some do.

Reward credit cards are a great option for anyone looking to earn added perks with every purchase they make.

2. Travel rewards credit cards

Instead of offering cash-back rewards, travel credit cards offer points or miles that make it easier to afford your next vacation. Many of them also offer special travel perks, such as priority boarding with your favorite airline, elite status with your go-to hotel chain, or various types of travel insurance.

There are three main types of travel credit cards:

  • General travel cards, which offer rewards you can use to book most forms of travel.
  • Airline cards, which offer rewards and perks that you can use with a specific airline.
  • Hotel cards, which offer rewards and perks that you can use with a specific hotel brand.

Travel credit cards often provide big sign-up bonuses and charge annual fees — some of them hundreds of dollars. However, some travel cards don’t charge an annual fee. SuperMoney makes it easy to filter cards by their annual fee and potential for rewards.

3. Low-interest credit cards

If you need to finance a large purchase, transfer a balance, or carry a balance from month to month, it might be a good idea to get a low-interest credit card.

There are three types of low-interest credit cards:

  • 0% APR cards, which offer a 0% introductory APR on new purchases for a period.
  • Balance transfer cards, which offer a 0% introductory APR on balance transfers for a period.
  • Low ongoing APR cards, which don’t offer a promotional APR upfront but offer a low — often single digit — interest rate.

Some low-interest credit cards also offer cash-back or travel rewards, but not all. As such, it’s important to consider your priorities when comparing these cards. These cards typically don’t charge annual fees.

4. Secured credit cards

These cards are designed for consumers who are new to credit or need help rebuilding their credit histories.

The main difference is that they require a security deposit to get approved, typically equal to your credit limit and you get the deposit back when you close the account. Other than that, they function similarly to other credit cards.

Some secured credit cards charge an annual fee, but some of the best don’t charge one at all. In some cases, you may even get rewards or the security deposit back before you close the account.

5. Store credit cards

Most major retailers offer a store credit card that you can use, either just at that specific retailer or everywhere. These cards often provide cardholders with bonus rewards and perks for using the card at the store.

Because some retailers don’t allow you to use their card anywhere else, they can be limiting. That said, they’re generally more liberal when approving people with a thin credit profile, or even a poor credit score.

Store credit cards generally don’t charge annual fees.

6. Student credit cards

These cards typically offer rewards and other incentives designed specifically for students and their needs. Some even encourage students to learn how to use credit responsibly or reward students for good grades.

Student credit cards typically don’t offer sign-up bonuses, but they don’t charge annual fees, and best offer rewards — either cash-back or travel — on your purchases.

7. Charge cards

While these cards aren’t common, American Express offers a few options. Charge cards function differently from normal credit cards in that they don’t allow you to carry a balance from month to month. Instead, they require you to pay off your balance in full each month.

American Express charge cards all charge high annual fees and offer travel rewards.

Common personal credit card benefits

In addition to offering rewards, many credit cards offer other benefits to the people who use them. Here are just a few examples:

  • Fraud protection: If someone steals your credit card and makes a purchase, you’re not liable for it.
  • Price protection: If you purchase an item and the price drops within 60 to 90 days, you can request a reimbursement for the price difference.
  • Purchase protection: If an item you purchases gets damaged or stolen within a few months, you could get reimbursed for the amount you paid to get a replacement.
  • Return protection: If a store won’t take your item back, you may be able to send it to the credit card company and get your money back.
  • Extended warranty: If you purchased an item with a warranty of a year or longer, your credit card will generally add a year or two to that warranty.
  • Rental car insurance: Most credit cards offer insurance to cover damage to a rental car. The insurance is usually secondary, however, which means it kicks in after your personal car insurance policy.

Other credit cards, especially travel credit cards, add even more benefits to that, including various types of travel insurance and protections.

How to pick the right personal credit card

If you’re interested in getting a credit card, there’s no single best card out there for everyone. As such, it’s important to do some research to make sure you get the right one for you. Here are three steps to get it right.

1. Check your credit

Different credit cards are targeted to different ranges of credit scores. For example, the best rewards credit cards and cards that offer 0% APRs typically require good to excellent credit, which starts with a FICO credit score of 670.

There are, however, secured credit cards and credit cards for fair credit if your score is lower. The important thing is that you apply for a card that fits your credit score. Otherwise, you could get denied.

2. Consider your spending habits

Some credit cards offer bonus rewards on specific purchases. So, if you spend a lot on groceries, get a personal credit card that offers bonus rewards on groceries.

The same goes for other purchases, such as gas, eating out, and travel. If your expenses are all over the place, consider getting a card that offers a high rewards rate on all your purchases.

If you don’t need a rewards credit card, move on to the next step.

3. Consider your needs

Go back and reread the descriptions of the different types of credit cards we shared above, and consider which one suits your needs the best. Be honest with yourself; if you really need a 0% APR credit card, focus on the 0% APR instead of the rewards some of these cards offer.

It’s easy to be tempted by credit cards promotions that could end up costing you more in fees than you get in return.


Personal credit cards can offer a lot of value to consumers, but they're not a great fit for everyone. Here are some things you should consider about credit cards before you apply for one. Compare the pros and cons to make a better decision.

  • They can help you build credit.
  • You can earn rewards and get other benefits.
  • You can avoid paying interest by paying off your balance in full each month.
  • They offer fraud protection and other benefits.
  • They're more convenient to use than cash.
  • They tend to charge higher interest rates than other forms of credit.
  • Their minimum payments are designed to keep you in debt.
  • A high credit limit could tempt you to overspend.
  • Some charge annual and other various fees.

Your best credit card in 3 steps

If you're interested in getting a credit card, there's no single best card out there for everyone. As such, it's important to do some research to make sure you get the right one for you. Here are three steps to get it right.

1. Check your credit

2. Consider your spending habits

3. Consider your needs

Personal credit cards can be very beneficial if you use them responsibly, but they can hurt you if you don't. Know your limits and tendencies to make the right decision.

Start comparing personal credit cards now. You may be surprised by the deals you can get.

The bottom line

If you’re not a disciplined consumer, then borrowing money via credit can be dangerous. A good rule of thumb to is never to carry a balance. Instead, pay it off before it starts incurring interest.

If you're looking for a personal credit card, use SuperMoney's credit card review page to find the best cards on the market today. Compare multiple cards to see what kind of interest, fees, rewards, and other benefits they offer.

As you take the time to do your due diligence, you'll have an easier time getting a card that will benefit you for a long time.