Understanding Credit Card Categories: Travel, Cash Back, Business, and Store Cards
Meta Title: Understanding Credit Card Categories: Travel, Cash Back, Business, and Store Cards | WanderWise Meta Description: Not sure what kind of credit card you have — or should have? This plain-English guide breaks down the four main categories and explains which one works for your goals. Target Keywords: types of credit cards, travel credit card vs cash back, credit card categories explained, which credit card should I get Word Count: ~2,300 Category: Points Education Cluster: Beginner's Guide
Here's something I've noticed in nearly every conversation I have about credit card points: people aren't sure what kind of card they have.
Not because they're not paying attention — they are. They pay the bill every month, they've had the card for years, they might even know the name printed on it. But when I ask, "Is that a travel card or a cash-back card?" the answer is often a pause followed by, "I'm honestly not sure."
That's not a reflection on you. It's a reflection on an industry that has made its product categories needlessly confusing.
So let's clear it up. There are four main categories of credit cards, and understanding which type you have — and which type you might want — is the foundation for making your rewards work harder.
The four categories at a glance
Before we go deeper, here's the overview:
| Category | What you earn | Best for |
|---|---|---|
| Travel rewards cards | Points or miles redeemable for flights, hotels, and travel | People who travel (or want to) and prefer flexibility |
| Cash-back cards | A percentage of each purchase returned as cash or statement credit | People who prefer simplicity and direct savings |
| Business credit cards | Points, miles, or cash back — often with higher earning in business-related categories | Self-employed individuals, freelancers, small business owners |
| Store cards | Discounts or rewards at a specific retailer | Loyal shoppers at a particular store (with significant limitations) |
Now let's look at each one in detail.
Travel rewards cards
This is what we talk about most at WanderWise, because travel rewards cards offer the highest potential value for your spending — especially when you know how to use the points.
How they work
Every dollar you spend on a travel rewards card earns you points or miles. The earn rate depends on the card and the purchase category:
- Base rate: Most travel cards earn 1 point per dollar on everything.
- Bonus categories: Many earn 2–5 points per dollar on travel, dining, groceries, or other categories.
- Sign-up bonuses: New cardholders can earn a large bonus (often 50,000–100,000 points) after meeting a minimum spending requirement in the first few months.
You can redeem those points for flights, hotels, rental cars, and other travel expenses — either through the credit card's own travel booking portal or by transferring the points to airline and hotel partner programs.
The major travel rewards programs
- Chase Ultimate Rewards (Chase Sapphire Preferred, Chase Sapphire Reserve, Chase Freedom Flex)
- American Express Membership Rewards (Amex Gold, Amex Platinum, Amex Green)
- Capital One Miles (Capital One Venture, Capital One Venture X)
- Citi ThankYou Points (Citi Premier, Citi Double Cash with ThankYou linking)
Each program has its own set of airline and hotel transfer partners, its own travel portal, and its own rules. But the core concept is the same: earn points from everyday spending, then use those points for travel.
Who travel cards are best for
Travel rewards cards work well for you if:
- You travel at least once or twice a year (or would like to start)
- You're comfortable paying an annual fee in exchange for higher rewards (most premium travel cards charge $95–$695 per year, but the benefits typically exceed the fee)
- You pay your credit card balance in full every month (this is important — carrying a balance means paying interest that quickly erases any rewards value)
- You want the flexibility to book flights and hotels without paying full cash price
What to watch for
Annual fees are the main consideration. A card with a $95 annual fee that earns you $400–$600 worth of travel per year is a strong deal. A card with a $550 annual fee makes sense only if you'll actually use the premium benefits (airport lounge access, travel credits, upgraded earning rates). We've written separately about how annual fees pay for themselves — the math matters more than the sticker price.
Cash-back cards
Cash-back cards are the most straightforward type of credit card. You spend money, you get a percentage of it back. No points to calculate, no transfer partners to research, no redemption strategies to learn.
How they work
Every purchase earns you a percentage back, paid out as:
- A statement credit (applied to your bill)
- A direct deposit to your bank account
- A check
Common earning structures:
- Flat-rate cards: Earn the same percentage on everything — typically 1.5% or 2%. Every purchase, every category, no thinking required.
- Tiered or rotating-category cards: Earn a higher percentage (3–5%) in certain categories (groceries, gas, dining, online shopping) and a lower rate (1%) on everything else. Some rotate their bonus categories every quarter.
Popular cash-back cards
- Citi Double Cash: 2% on everything (1% when you buy, 1% when you pay)
- Chase Freedom Unlimited: 1.5% on everything, with bonus categories
- Bank of America Customized Cash Rewards: 3% in a category you choose, 2% at grocery stores, 1% on everything else
- Wells Fargo Active Cash: 2% on everything
Who cash-back cards are best for
Cash-back cards work well for you if:
- You don't travel frequently (or prefer to pay cash for travel)
- You value simplicity above all — you want rewards without having to think about them
- You don't want to pay an annual fee (many excellent cash-back cards have no annual fee)
- You'd rather have money in your pocket than points in an account
The trade-off
Cash-back cards are simpler, but they almost always return less total value than travel rewards cards when the points are used strategically. That 2% cash back is reliable and easy. But 2 cents per dollar of spending is the floor for what a travel rewards card can return — and the ceiling for a cash-back card.
Here's a concrete example: Spend $30,000 in a year on a 2% cash-back card, and you get $600 back. Spend the same $30,000 on a travel rewards card that earns 2 points per dollar, and you have 60,000 points. Redeemed through a travel portal, those points might be worth $600–$900. Transferred to an airline partner and used for a business-class flight, they could be worth $1,200–$2,400.
Same spending. Different outcome. The question is whether the extra value is worth the extra effort.
Business credit cards
Business credit cards aren't only for people who run large companies. If you have any self-employment income — freelance work, consulting, a rental property, an Etsy shop, even a side project — you may qualify for a business card. And they can be surprisingly valuable.
How they work
Business cards function almost identically to personal credit cards. You earn rewards (points, miles, or cash back) on your purchases. The key differences:
- Higher earning in business categories: Many business cards offer bonus points on office supplies, internet, phone, advertising, and shipping — categories that personal cards don't prioritize.
- Higher credit limits: Business cards sometimes offer higher credit limits than personal cards.
- Separate from personal credit: In most cases, business cards don't appear on your personal credit report (though you're still personally liable for the balance). This keeps your personal credit utilization low.
- Sign-up bonuses can be substantial: Business cards frequently offer sign-up bonuses of 75,000–150,000 points.
Popular business cards
- Chase Ink Business Preferred: 3 points per dollar on travel, shipping, internet, phone, and advertising (up to $150,000 combined per year)
- Amex Business Gold: 4 points per dollar in the two categories where you spend the most each month
- Capital One Spark Cash Plus: 2% cash back on everything, with no limit
Who business cards are best for
Business credit cards work well for you if:
- You have any form of self-employment income (even modest amounts)
- You want to earn extra points from business-related spending
- You'd like to keep business and personal expenses on separate statements
- You want access to large sign-up bonuses that can fund a major trip
What to watch for
You do need to have a legitimate business purpose to apply — but the definition of "business" is broad. Sole proprietors, independent contractors, and people with rental income all qualify. You don't need an LLC or a storefront.
Be aware that some business card benefits (like purchase protection or travel insurance) may differ from the personal version of the same card. Read the benefit details before assuming they're identical.
Store credit cards
Store cards are the ones offered to you at the checkout counter. "Would you like to save 20% today by opening a store card?" You've heard the pitch. Let me explain what you're actually getting.
How they work
Store cards come in two varieties:
- Closed-loop cards: Can only be used at the specific retailer that issued them (and sometimes their affiliated brands). These are the most common type.
- Open-loop co-branded cards: Carry a Visa or Mastercard logo and can be used anywhere, but earn enhanced rewards at the specific retailer. These are more flexible.
The typical earning structure is a percentage discount or reward at the associated store:
- 5% back at Target (with the Target RedCard)
- Rewards points at Macy's, Nordstrom, or Amazon
- Special financing offers (often interest-free for a period)
Who store cards are for
Store cards work well for you if:
- You spend heavily at one particular retailer (enough that the rewards meaningfully add up)
- You want the introductory discount and plan to pay the balance immediately
- You understand and will avoid the deferred-interest traps (more on this below)
What to watch for — and this is important
Store cards typically carry the highest interest rates of any credit card — often 25–30% APR. And many of those "special financing" offers are deferred-interest plans, not true 0% interest. The difference matters enormously:
With true 0% interest, you pay no interest during the promotional period. With deferred interest, if you haven't paid the full balance by the end of the promotional period, you owe interest on the entire original purchase amount retroactively, often at that 25–30% rate.
Additionally, store cards earn rewards only at one retailer. Those same dollars spent on a 2% cash-back card or a travel rewards card would earn rewards you can use anywhere.
My honest recommendation: Store cards rarely make sense for people who have (or could have) a general-purpose rewards card. The introductory 20% discount can be appealing, but it's a one-time benefit — and it comes attached to a card with high interest rates, limited utility, and rewards you can only use in one place.
So which type should you have?
Most people benefit from having one or two cards from the categories above. Here's a simple framework:
If you travel or want to start traveling on points: A travel rewards card should be your primary card. Use it for as much of your everyday spending as possible to maximize point accumulation. Consider adding a no-annual-fee cash-back card for categories where your travel card's earning rate is low.
If you don't plan to travel and want simplicity: A flat-rate 2% cash-back card covers everything elegantly. No categories to track, no points to manage. Just consistent value on every purchase.
If you have self-employment income: A business rewards card — in addition to your personal card — lets you earn points on business expenses separately. The sign-up bonuses alone can fund a significant trip.
If you're not sure yet: Start with a no-annual-fee card (either cash back or travel) and learn how the rewards work. You can always upgrade or add a premium card later once you know what you value.
The big picture
Credit cards are tools. Like any tool, they work best when you choose the right one for the job. A travel rewards card in the hands of someone who travels regularly can return thousands of dollars in value every year. A cash-back card in the hands of someone who prefers simplicity provides consistent, reliable savings. A business card can quietly fund your next vacation through everyday work expenses.
The first step is knowing what you have. Check your wallet. Look up your cards online. See what type of rewards you're earning — and whether they match what you actually want.
You might be surprised. Many people discover they've been earning travel points for years without realizing it. The points are there, accumulating quietly in the background. All they need is someone to put them to use.
Curious which card type fits your life? Take the WanderWise Travel Score Quiz — in 60 seconds, we'll show you what you have, what it's worth, and what to do next.