Information from the Washington State Department of Financial Institutions

The Different Types of Credit Cards

Unsecured Credit Card

The most common type of credit card. Unsecured credit cards don’t require you to put up any collateral. When used responsibly, unsecured credit cards can be used to build credit.

Secured Credit Card

Secured credit cards typically require a cash deposit. These credit cards are usually offered to people with no or bad credit histories.

Rewards Credit Cards

Many credit cards today offer rewards such as travel miles, points, or cash back. Evaluate these rewards in terms of the extra credit costs to you.

Zero Percent Interest Introductory Credit Card

Zero percent introductory credit cards allow you to pay no interest on purchases for a certain period of time, for example twelve months.

Once the introductory period is over you’ll begin paying interest on whatever balance is remaining.

Deferred Interest Credit Card

Deferred interest credit cards are typically offered by stores, such as a furniture store.

With deferred interest cards you may be offered 0% interest for a set amount of time. 6 months, 12 months, 3 years, are common examples.

If you do not pay off the balance by the time the term expires you will be charged the remaining balance plus the total interest, retroactively accrued from the day you bought that item.

Whenever you sign up for a zero-interest credit card or financing, verify whether it’s a deferred plan. If it is, plan to pay the full balance before the 0% promotional period ends.

Balance Transfer Credit Cards

Credit cards that allow you to transfer balances from another credit card. Balance transfer credit cards are usually used to save money on interest. Be sure to do your research when getting a balance transfer credit card. There are fees typically associated with balance transfer credit cards.

Starter Credit Cards

Starter cards are typically used by students to build credit. These cards come with a small credit limit.