The "best credit card" can take many forms depending on your personal financial goals and situation. 

If you have good credit and want to reap as much cash back and other rewards as possible, you'll likely want a cash-back credit card or rewards credit card. If you have some credit card debt you'd like to do away with as quickly as possible, a balance transfer credit card or introductory APR credit card can help you avoid interest charges as you pay off your debt. Otherwise, you might want to find the best credit card to start building your credit, protect your online purchases or make your travel more comfortable.

Below we review the most widely applicable credit cards for a variety of popular financial goals.

How do credit cards work?

A credit card is a personal credit account that allows you to make purchases upfront with the credit card issuer's money. Once you apply, the issuer determines the size of the credit line you're able to access based on your credit score and income. Basically, you're using borrowed money to fund your expenses. The credit card issuer makes money by charging you fees and interest.

You have to pay back any charges you put on your credit card. If you don't pay off your credit card in full by the due date, your remaining balance will start accruing interest.

How credit card interest works

Most credit card balances accrue interest at a variable rate. A variable rate means it can change depending on certain factors. 

A credit card's interest rate is called the annual percentage rate, or APR. It's affected by the federal benchmark interest rate which is set by the Federal Reserve based on macroeconomic factors. You can find your credit card's APR outlined in the terms and conditions your issuer provided to you with your card.

Despite an APR being measured annually, most credit card balances actually accrue interest at a daily rate. 

Interest only applies to balances left over after your payment due date, so it's important to pay your balance in full and on time. Each day the unpaid remainder collects charges that will show up on your next billing statement. To find the daily interest rate, you can divide the card's APR by 365. Overtime, interest charges can do considerable damage to your finances, so it's best to avoid them whenever possible.

How credit card rewards work

Some credit cards offer rewards for your spending. Rewards come in three camps -- cash back, points or miles -- but they all work generally the same way. You earn a preset reward rate on your spending which you can later redeem for cash back, travel or other benefits.

Cash back can typically be redeemed as a statement credit or deposited directly into a bank account. Statement credits lower the overall balance of your credit card account while depositing them into your bank account will increase your account balance. Unlike with points and miles, the redemption value of cash back is pretty straightforward: 1% cash back is worth 1 cent per dollar spent.

Points and miles usually have more flexibility. Points can be redeemed for a myriad of things including statement credits, merchandise, gift cards, travel or donated to charity. Miles can often be used for much of the same. However, they may not always be worth 1 cent. They could be worth more or sometimes less.

Types of credit cards

There are a wide variety of different types of credit cards. Here's how they break down.

Rewards credit cards

Rewards credit cards -- as the name suggests -- reward you for spending with them. There are cash-back credit cards, travel credit cards, co-branded credit cards with hotels and airlines, bonus category credit cards and credit cards with rotating bonus categories. Each one rewards you for spending within the categories outlined in the card's reward program.

Balance transfer credit cards

Balance transfer credit cards are designed to help you eliminate existing credit card debt by taking advantage of an introductory APR. These cards provide a window of time -- usually between nine and 21 months -- where a balance you transfer from another card won't accrue interest. During that time, you can pay it down while not having to worry about interest charges.

However, these cards typically include a one-time balance transfer fee. The industry standard fee is 3%, but some cards may have a higher fee of 5%. That said, paying the fee will typically be less expensive than paying continuous interest charges on a credit card that carries a high interest rate.

There are cards without balance transfer fees, but they typically have shorter introductory offers.

Low interest and 0% APR credit cards

Low interest and 0% APR credit cards are designed to either avoid interest charges completely or to lessen their impact by providing lower-than-average interest rates. 0% APR cards offer a limited time to make new purchases pay down the balance over time without interest.

Student credit cards

Student credit cards were created for college students. As such, they're easier to qualify for as most college students don't have an extensive credit history. They may not offer competitive terms or rewards, but they're great for establishing a credit history and learning the basics.

Business credit cards

Business credit cards bolster business spending by providing rewards and perks designed to make managing payments easier or providing travel amenities to business people who travel often.

Pros and cons of credit cards

There are a number of pros and cons to consider when using credit cards:

Pros

• Build credit through responsible use
• Earn rewards for essential purchases
• Additional card perks like shopping and travel protections
• Shop more securely with virtual cards
• Annual statement credits
• Gain access to funds in case of emergency

Cons

• Fees
• Could damage credit with irresponsible use
• Temptation to overspend
• Could be hard to manage
• Interest charges

Should you get a credit card?

If you're 18 or older, a credit card can help you earn rewards, prevent identity theft and start building your credit..

Building credit early will set you up for success in your financial life. Your credit score will determine what kind of terms and conditions you get when asking to borrow money from a lender, whether it be for a home, a car or for college. If you're going to college for the first time, it's also a good way to have access to emergency funds in a pinch. 

Credit cards do take some work, however. It's important not to get enticed to spend on unnecessary purchases. A good way to do so is to treat it like cash. If you don't have the money to pay it off immediately, it's not a good idea to make the purchase.

How to choose the right credit card

Ultimately, the right credit card is individual to each person and their goals and preferences. Decide what features you're looking for: maximized rewards, spaced-out payments on a large purchase, credit building, an emergency credit card or other benefits. From there, you can decide the type of card you're looking for. You can then use online reviews like those at CNET to further narrow down what terms will work best for you.

How to get the most out of your credit card

The first step will be to choose a credit card that matches your spending habits. Choose a credit card that bolsters how you spend without having to change your habits to fit a credit card.

Make sure you understand the rewards redemption rules, too, as the rewards rates themselves can be misleading on some credit cards. For example, some travel credit card miles are worth more when used for airfare rather than as statement credits. There are some rewards credit cards where it's better to redeem for gift cards rather than statement credits for the same reason.

You can also take advantage of all relevant benefits provided by the card -- like if there are annual statement credits. If the card has an annual fee, they can be a great way to offset the cost.

The most important thing is to pay your bill on time and in full to avoid any interest charges. That way you won't have to worry about expensive interest that would otherwise bog down your finances. Try not to get enticed into spending on something you normally wouldn't, even if you have an introductory APR offer. You want the credit card to work for you, rather than the other way around.

What is a credit score?

A credit score reflects your debt history and habits to potential creditors. A higher credit score indicates you're responsible with debt management and are likely to pay back anything you borrow. Besides guiding approval decisions, your credit score helps determine  the interest rate you'll pay.

Your credit score is determined by a number of different factors including payment history, age of credit accounts, the number of credit accounts, how much of your overall credit you're using and a handful of others.

There are three major credit bureaus that are responsible for generating your credit score based on your credit reports – Equifax, TransUnion and Experian. Your credit card iss