There are a lot of litter and bedding options for rats, but not all of them are safe to use. Here is a list of litter/bedding options:
Wood shavings are okay for your rats as long as the shavings are aspen shavings. Pine and cedar are not safe for rats as they can cause respiratory, liver, and kidney problems.
From my experience the only good thing about wood shavings is that they are pretty cheap. Other than that I really don't like using them as a litter/bedding for any pet. I find that they are not very absorbent and start to smell very quickly. They are messy as they get everywhere and stick to everything. And I really dislike how rough and dusty they are. They make me sneeze quite a bit, and since rats have very sensitive respiratory systems I would think that they would find it irritating too. And I have to say I HATE the smell of aspen shavings. It stinks and it makes my nose burn.
Some people use newspaper for their rats. I wouldn't really recommend using newspaper. It is not very absorbent and when the ink gets wet it gets on everything. Including the rat! And most newspaper inks are not safe for consumption by rats.
This is basically recycled wood fibers made into fluffy stuff. Many of you have probably seen videos and pictures of my hamster Pipsqueak's cage then you will have seen the bedding in it. That is carefresh. I mostly just use this stuff for hamsters and mice. It is safe for all small pets, but it is pretty pricey so for animals that need larger cages such as rats, (or rabbits and ferrets) I would only use it in a litter box and get the rats litter trained. (which is actually pretty easy to do!). The only down-side to this is that it can be a bit dusty (don't be fooled by the words "dust-free" on the bag!).
This is great litter. Most brands really are virtually dust-free and paper pellets are super absorbent! They are also a good price and last longer that most other litter. However I would not use this throughout the cage just because they are really hard and would be uncomfortable for the rats to sleep on, etc. What I do is litter box train them and then use the paper pellets in the litter box. Which saves money and makes cleaning the cage simpler. The best brand is Yesterday's News Litter by Purina. (It is meant for cats but it is just recycled paper so it is 100% safe for the rats)
I really like using fleece in rats cages. Basically instead of purchasing bedding/ litter, you purchase some fleece and line the cage bottom with it. Then each day you clean off the solid waste and every few days or so you change and wash the fleece. This is a great option for rats. They love to sleep in fleece and it makes for a fun-looking cage too! Generally it saves a TON of money. ( I say generally because a few rats love to chew it up, so you may have to buy some more than you planned ). The cage is also way easier to clean with fleece! Using fleece is also great because it isn't dusty so it won't irritate your rats sensitive respiratory system.
So, in my opinion the best two options for rats are a litter box with paper pellets, or fleece. What I usually do at the shelter is a combination of these two. I line the cage with fleece to make in comfortable for the rats and then I provide a litter box so that they fleece stays cleaner longer.