Credit Cards

A short-term loan you can use repeatedly. When you swipe, tap, or enter your card number, you are borrowing money from the card issuer rather than spending your own, with an agreement to pay it back later. Because it involves borrowing, a credit card comes with interest charges if you do not pay in full, a credit limit, and an impact on your credit score. This is the key difference from a debit card, which spends money directly from your bank account.

A type of credit card that gives you rewards in exchange for your purchases, typically as cashback, points, or miles that can be redeemed for benefits like travel discounts, merchandise, or statement credits. Rewards accumulate based on how much you spend, and some cards offer higher returns in specific categories such as dining, groceries, or travel, plus sign-up bonuses for spending a set amount in the first few months. Their value only holds up if you pay your balance in full, since interest can erode the rewards you earn.

A type of credit card that gives you cash rewards based on the purchases you make, earning a percentage back on every dollar spent, typically ranging from 1% to 5% depending on the card and category. Rewards can be redeemed as a statement credit, direct deposit into your bank account, or gift cards. What sets these cards apart is their simplicity, since unlike points-based or travel reward cards the rewards directly reduce your spending or go toward other financial goals.

A rewards credit card that gives you points or miles instead of, or in addition to, cash back. You use it for everyday spending such as groceries, gas, dining, and bills, and in return earn rewards meant for travel expenses like flights, hotel stays, rental cars, and vacation packages. Modern travel cards are more flexible than older single-purpose airline cards, often letting you choose how and where you redeem, whether through an issuer travel portal, transfers to airline or hotel partners, or statement credits for travel purchases.

A credit card designed to help people with no credit or poor credit build or rebuild their score. It usually has a low limit and higher interest, and some are secured with a deposit that acts as collateral. The issuer reports your payments to the major credit bureaus, so paying on time builds a positive credit history over time.

The total amount you currently owe on your credit card account. It includes purchases, balance transfers, cash advances, interest charges, fees, and any unpaid amount carried over from earlier billing cycles, so it can rise even without new purchases. An account can show more than one balance at once, such as a current balance and a statement balance, which serve different purposes.