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What’s the Advantage of Owning Different Types of Credit Cards?

Four different cards, four separate functions

Karen Banes
Financial Strategy
Published in
4 min readDec 20, 2024

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Image from Freepik

If you own multiple credit cards because they’re all maxed out and you’re juggling multiple payments, that’s never a good thing.

But there are reasons it can be beneficial to own — and use — different types of credit card. Here are few common types of cards, and why you might want to own more than one of them.

Credit Builder Cards

These are aimed at people who may have no credit score (perhaps just due to being young and not having built one up yet) or perhaps a bad credit score due to previous issues with credit.

Either way, they’re designed to help you build a new, healthy, credit history. They typically have a low credit limit and high interest rates, as they’re offered to potentially high-risk borrowers.

Why you might want one: to build credit as a young person or after an incident that has left you with a poor credit rating.

How to use them: Use a credit builder card to regularly make small purchases that you can pay off straight away. This will let you build credit while avoiding interest charges.

Balance Transfer Cards

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Financial Strategy
Financial Strategy

Published in Financial Strategy

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Karen Banes
Karen Banes

Written by Karen Banes

Freelance writer sharing thoughts on life, society, creativity, and productivity. https://changetheworldwithwords.substack.com

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