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Student Financial Aid

Credit Cards

Four Common Types of Credit Cards

Rewards Credit Cards

Rewards credit cards allow users to earn incentives for making purchases with their credit card. Points accumulate for each dollar charged on the card, and cardholders can redeem these points for various rewards. People who prefer to do most of their spending and purchasing on a credit card each month, and who are diligent about paying their balance off in full each month, are the best candidates for a rewards card. Rewards are paid out in a variety of forms, including, checks, gift certificates, airline miles and free hotel stays. Rewards cards usually require better-than-average credit for approval.

Standard Credit Cards

Standard credit cards are the most common type of credit cards. They are available from most banks and financial groups.

Secured Credit Cards

Secured credit cards require users to post collateral when you open your account, usually an amount equal to or greater than your credit limit. With a secured credit card, you can build up your credit score and move on to an unsecured card. Secured credit cards are for people with either no credit or poor credit who are trying to build or rebuild their credit history. Cards that help rebuild credit often come with low credit lines and additional fees.

Student Credit Cards

Student credit cards are specifically designed for college students with the understanding that young adults have little or no credit history. Student credit cards may come with rewards such as cash back or points. 


What to consider when selecting a credit card

  • Fees
    Even though there are many benefits that come with a credit card, there are also fees that may be associated with it. Be sure to read the fine print when applying for one. Fees may include:
    • Set up and maintenance fees, including an annual fee
    • Transaction fees, including a cash advance fee
    • Penalty fees, including a late fee
  • Credit Limit
    This dollar figure is the maximum amount of credit you can use with this credit card. It is important not to max out your credit card because it will affect your credit score, your monthly payments and cause additional fees.
  • Average Daily Balance Method
    Most credit cards use this method to calculate your interest charges, which means that your interest is compounded and accumulated based on a daily rate.  
  • APRs for Different Types of Transactions
    APR stands for annual percentage rate and is used to calculate the interest charges on your credit card. Types of transactions to be aware of include:
    • Introductory APR vs APR after introduction period
    • APR for purchases
    • APR for balance transfers
    • APR for cash advances
    • APR penalty for late payments or going over your credit limit 
  • Rewards
    It is important to choose the card with the rewards that benefit you most. These rewards may include points, cash back, travel miles, etc. 
  • Grace Period
    After a purchase, you typically receive a grace period from accruing interest, which lasts between the end of the billing cycle and the date your payment is due.  

Additional Credit Card Resources