Once you created a name for your Custom Attribute, you are instructed to pick an "Attribute Type."
Here's an explanation of what those categories mean:
Radio: This option allows you to set one value per profile (i.e. Favorite Color? Red OR Blue).
Checkbox: This option allows you set more than one value to a single profile.
Text: This option allows you to type notes or remarks about an individual with a free-form text option.
Number: Add a number range to a segment on different ranges.
Tag: This option allows you set one singular value to your entire data set.
Date: Add a date as an attribute to timestamp your audience.
Date Time: Add a time and date as an attribute to timestamp your audience.
Score: Add a Score (number range) to any profile. This attribute is nested under the Scores tab in a profile and in Audience.
You can segment on custom attributes by going to Audience > Custom.
Learn how to categorize your custom attributes here!