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The average U.S. consumer holds 3.8 credit cards, according to Experian data, and it's easy to see why: Credit cards can provide a number of perks when used responsibly. But there are many different types of cards to consider. While some people may be focused on building credit or saving money on interest, you may be looking to maximize your rewards and benefits.
As you shop around for the right card for you, here are four types of credit cards that should be on your radar.
No Annual Fee Cards
There are many different credit cards that don't carry an annual fee, and you should probably be carrying at least one of them. The great benefit to these cards is you can hold on to them for years without worrying about getting enough value to make up for a yearly charge.
A credit card that has no annual fee can be key to building and maintaining a good credit history: The length of your credit history, including the age of your oldest account, is one of the five factors that help determine your FICO® Score☉ . In addition, keeping an annual fee card will give you more available credit, which can also help credit scores if you manage the card wisely and keep balances low.
Within the category of cards with no annual fee, you can choose a card based on your preferences. Maybe you choose a card that offers cash back, points or miles, or you opt for one with a low introductory or ongoing APR. Whatever you decide, the idea is to get a good card you can hold on to for the long haul.
Hotel or Airline Card
If you're a travel buff, getting a co-branded credit card with your favorite airline or hotel brand can go a long way. You'll earn points or miles with every purchase, which can help pay for a weekend getaway trip or long-awaited family vacation. These cards don't always offer the best rewards rates, but they typically come with big sign-up bonus offers and valuable perks—and, your points and miles typically will not expire as long as you hold the card.
For example, a lot of airline cards offer free checked baggage and priority boarding, as well as statement credits for in-flight purchases and airport lounge access. Hotel cards usually come with complimentary elite status and a free night's stay every year.
Even if you travel just a couple of times per year, travel credit cards including airline and hotel cards can often return as much or more value than they cost in the form of an annual fee.
Cash Back Card
Travel rewards can be valuable, but there may be times when you'll want to simplify the rewards you earn with a strong cash back credit card. There are several cash back credit cards that offer standout rewards rates on everyday spending categories.
You can also decide which type of cash back card is right for you: One that earns extra rewards in rotating bonus categories or simpler versions that offer flat-rate rewards on purchases. Both are solid options—the choice comes down to how much time you want to devote to tracking your spending and extra rewards-earning categories.
You also may be eligible for a sign-up bonus with a cash back card, such as a cash payout for spending a certain amount in a number of months. What's more, many cash back cards don't charge an annual fee, so you can kill two birds with one stone.
Transferable Rewards Card
If you're looking for ways to maximize your rewards, credit cards that allow you to transfer your points to other loyalty programs offer a great way to do it.
These are the cards that earn American Express Membership Rewards, Capital One Venture or Spark Miles, Chase Ultimate Rewards and Citi ThankYou Points.
All of these rewards programs provide several redemption options, but your points or miles have a set value, such as 1 cent per point. If you want to maximize the value of your points or miles, you can transfer them to a partner airline or hotel rewards program, which has a dynamic pricing structure. With the right redemption, you can get several cents per point or mile in value.
This extra value and versatility make transferable rewards cards an excellent choice, especially for travel enthusiasts.
Check Your Credit Before You Apply
Most of the best credit cards on the market require good or excellent credit, which starts at a credit score of 670, according to FICO®. Check your credit score before you apply for a card to make sure you know where you stand.
If your score doesn't measure up, take some time to improve it before you apply. Also, if you plan on getting more than one credit card, space out your applications by six months or more. Each new credit inquiry can knock a few points off your credit score, but multiple credit card applications in a short period of time can have a negative compounding effect.
Once your credit is where you want it, take time to research your options and pick the cards that best fit your spending habits, lifestyle and credit score. There's no maximum number of credit cards you can hold, so rounding out the types of cards in your wallet can help provide you more options and perks—and could even help your credit score. Experian CreditMatch™ can help you sift through card offers and find out which ones you may be more likely to qualify for.