Different Types of Credit Cards

Credit cards come in different types depending on what they’re built to do—earn rewards, rebuild credit, lower interest, or help you manage debt.

Knowing the main types makes it easier to pick one that actually fits your situation.

KOHO Essential

KOHO isn’t a traditional credit card—it’s a prepaid Mastercard® you load with your own money.

With KOHO Essential Plan:

• It has a low monthly plan fee that can be waived when you set up direct deposit or add +$1,000.

• Use a prepaid Mastercard® for groceries, bills, subscriptions, and travel.

• Grow your savings with a 2% interest savings rate on your entire balance.

• Earn 1% cash back on groceries, eating & drinking, and transportation.

• You can add Credit Building for $10/month, it's an affordable way to build your credit history.

• Enjoy unlimited transactions and free e-transfers (never worry about fees when sending money to someone again).

Common Types of Credit Cards

1. Rewards & Cash Back Credit Cards

These cards give you points, miles, or cash back on your purchases.
Good for: people who pay their balance in full every month and want extra value on everyday spending.

2. Low-Interest Credit Cards

Designed to offer a lower interest rate than standard cards.
Good for: people who sometimes carry a balance and want to reduce interest costs (but paying in full is still best).

3. Balance Transfer Credit Cards

These let you move high-interest debt to a card with a promotional low or 0% rate for a limited time.

Good for: consolidating and aggressively paying down existing credit card debt, as long as you’re disciplined.

4. Secured Credit Cards

You give the lender a security deposit, and that becomes your limit. The card then reports to the credit bureaus like a normal credit card.

Good for: people with bad or limited credit history who want to rebuild.

5. Student Credit Cards

Basic cards designed for students and first-time card users, often with lower limits and simpler rewards.

Good for: building a credit history early—as long as spending is kept under control.

6. Store & Retail Credit Cards

Credit cards issued by a store or brand, often with in-store rewards or discounts, but sometimes higher interest rates.

Good for: very specific scenarios, but easy to misuse if you’re chasing discounts and not watching the interest.

Do You Always Need a Credit Card?

Not necessarily. If you’re still learning money habits, paying off debt, or worried about overspending.

When you’re ready, you can choose a traditional credit card type that truly matches your goals—rewards, low interest, or rebuilding—instead of grabbing one at random.