Understanding Types of Credit Cards

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• Rewards Credit Cards
• Cash Back Credit Cards
• Lower Rate Credit Cards
• Secured Credit Cards
• Student Credit Cards
• Store Credit Cards
• Business Credit Cards
• Choosing a Credit Card

Choosing a credit card can seem difficult and overwhelming, especially if you’ve never had one before. How do you know which credit card is right for you and your unique financial circumstances? Read on for a breakdown of the different types of credit cards and their benefits.

Rewards Credit Cards

Rewards credit cards earn incentives—like points or cash back—to reward you for spending with your credit card. As you make purchases, reward points accumulate and can eventually be converted into tangible rewards, like travel, gift cards, or merchandise. Some credit cards offer general reward points on all purchases, and some offer bonus categories to help you earn more points in a designated category. Point systems, purchase categories, and rewards vary by card issuer, so as you research, be sure to pay attention to the terms and conditions of each credit card.

Rewards credit cards may work best for you if you like the idea of earning specific discounts or gift cards while making everyday purchases. For example, if you choose a rewards credit card that earns 3X points at the grocery store, as those points accrue, you could potentially redeem them for discounted travel on your next vacation, or for a gift card at your favorite restaurant.

Cash Back Credit Cards

Cash back credit cards earn money back on purchases made with your credit card. Some cash back cards offer a flat rate on all spending, like receiving 1.5% cash back on every dollar spent. Other cards offer bonus cash back on certain categories, like receiving 3% cash back on travel purchases and 1% on all other purchases.

Cash back credit cards may be a good option if you want to earn cash to use at your discretion. If you spend regularly in certain areas—like grocery stores or dining out—look for a cash back credit card with bonus categories that match your spending, but if your spending varies, look for a card with flat rate cash back on all spending.

Lower Rate Credit Cards

All credit cards have an annual percentage rate (APR). APR determines the cost of credit and is the interest you pay on your credit card if you carry a balance month to month.

Rather than earning rewards or cash back, lower rate credit cards have reduced interest rates, helping you pay off your credit card balance faster. The lower APR helps make your monthly payments lower by paying less interest, which can be helpful if you sometimes carry a balance.

Lower rate credit cards often include special introductory APRs for balance transfers such as 0% APR for 10 billing cycles. Balance transfer offers incentivize you to move outstanding debt from one or more high-interest credit cards to a new, lower interest rate card, to help decrease your interest costs and pay down your balance faster. Balance transfers are often available for rewards and cash back credit cards, too.

If you sometimes carry a credit card balance instead of paying it in full to avoid interest charges, a lower rate credit card could help you pay down your credit card debt and save money in the long run.

Secured Credit Cards

Most credit cards are unsecured lines of credit, meaning no collateral is needed to open them. This makes unsecured credit cards harder to qualify for, because credit card issuers want to ensure they’ll be reimbursed for the credit they’re lending.

Secured credit cards are unique because they require a one-time, refundable deposit that usually equals your credit limit. While paying a large deposit up front may not be ideal, it makes secured cards easier to qualify for, as it minimizes risk for credit card issuers.

When you use your card responsibly, secured credit cards can help build your credit score. Plus, you can typically get your initial deposit back and potentially graduate to an unsecured credit card, as long as you paid your balance in full and on time each month. If you don’t have experience establishing credit or you’re looking for an opportunity to rebuild your credit, a secured credit card could be a great option for you.

Student Credit Cards

Student credit cards are specifically designed for students—usually those in college—just beginning their credit journeys. Many student credit cards offer rewards or cash back, and may have extra perks for earning good grades or demonstrating positive, credit-building habits.

To qualify for a student credit card, you must be 18 years old, and may have to show proof of enrollment in school. Depending on the student credit card, some may require a security deposit, some form of credit history, or a co-signer.

Store Credit Cards

Store credit cards are offered through various retailers. These cards may be used only within the retailer, or they may be co-branded with Visa, Mastercard, or Amex, allowing you to use the card outside of the retailer.

Store credit cards often reward you for purchases made at that specific retailer, and sometimes include a low or 0% interest rate for an introductory period to encourage you to spend with that card. If a 0% interest rate is offered and the balance is not paid in full at the end of the promotional rate, you may be charged retroactively for the interest at the time of the purchase.

A store credit card may be worth it if you would like to take advantage of certain benefits at retailers you shop at regularly.

Business Credit Cards

Business credit cards allow business owners to keep their personal and business expenses separate while they make purchases and help their business build credit. Business credit cards work like personal credit cards, but usually have higher credit limits and offer different rewards specific to business needs. Some business credit cards offer a flat rate for all purchases, and others offer bonus rewards in certain categories, like gas stations, office supplies, or travel.

To qualify for a business credit card, you must provide proof of your business through valid and official forms of identification, legal documents identifying the structure of the business or the name of the business, and other information.

What type of credit card should I choose?

When it comes to choosing a credit card, there isn’t a wrong answer. It depends on a variety of personal factors, like spending habits, credit history, and the stage of life you’re in. As you research credit cards, be sure to read the terms and conditions, and consider whether the features and benefits fit into your lifestyle.

• Rewards credit cards earn points that can be converted into rewards like discounted airfare or gift cards, and may work for you if you like the idea of earning rewards for specific purchases.
• Cash back credit cards earn money back on purchases made with your credit card, allowing you to earn general cash to use at your discretion.
• If you sometimes carry a credit card balance month to month instead of paying it in full to avoid interest charges, a lower rate credit card could help you pay down your credit card debt.
• Secured credit cards require a one-time, refundable security deposit, and when used responsibly, they can help you establish or rebuild your credit score.
• Student credit cards are specifically designed for people—usually college students—just beginning their credit journeys, and they usually offer rewards or cash back, and may have extra perks for earning good grades or demonstrating credit-building habits.
• Store credit cards can be appealing if you would like to take advantage of certain benefits at stores you shop at regularly.
• Business credit cards help business owners keep their personal and business expenses separate and earn rewards specific to business needs.

At Huntington, our credit card offerings let you choose the benefits that fit your lifestyle. Whether you want to earn cash back on every purchase, get rewards in the category of your choice, or save money with lower interest rates, find the credit card that's right for you:

• Huntington^® Cashback Credit Card: Earn 1.5% unlimited cash back on every purchase in store, online, and everywhere in between.
• Huntington Voice Rewards Credit Card^℠: Earn 3X points up to $2,000 in spend per quarter for the ways you spend most. Pick one Pick one of 10 categories and change it every quarter to fit your needs^†.
• Huntington Voice Credit Card^®: Receive a lower interest rate, instead of rewards or cash back, for a lower monthly payment.
• Huntington^® Secured Credit Card: It’s the credit-building, cash back-earning card with resources and education to help jump start your credit score.
• Voice Business Credit Card^℠: Choose one of 10 categories to earn 4% cash back on the first $7,000 you spend per quarter, and earn 1% cash back on all other purchases.

We’re here to help you achieve financial success. If you have questions about the different types of credit cards, call us at (800) 509-1015, or come visit us at your local Huntington branch.