Credit Card is very commonly used these days. It has become an essential tool in our everyday financial bag. Thus It is good to know the different types of credit cards issued by dozens of credit card issuers. This will be a good base when deciding on a credit card.
When you need to decide on a new credit card this tip is helpful to know what you need in line with the type of cards available in making the decision. There are various types of credit cards in the market place. Range from your basic no-frills card (known as “plain-vanilla”) to your premium card with a lot of benefits and rewards.
1. Standard “Plain-Vanilla” Credit Cards | 10 Types of Credit Cards Option to Consider for Use
The Standard credit cards are also known as the “plain-vanilla” credit cards. These cards come with no frills or rewards. They are quite easy to use and understand. This is a good choice option if you want an easy to use not necessary looking to earn rewards.
The standard credit card enables you to use the balance within your credit limit given to you.
2 Balance Transfer Credit Cards
The next on our list is the Balance Transfer Credit Cards. This type offers you the ability to transfer balances a low introductory rate on balance transfers for a specified period of time.
Thus if you will perform a good number of balance transfer and will want to save from the high-interest rate balance set on an existing card, then this type is a good option to have.
The Balance transfer interest rates that come on the card vary from card to card vary. some come with as low as even 0%, but with certain criteria. If you want this type go for the one that has a lower promotional rate and a longer the promotional period.
3. Rewards Credit Cards
Rewards cards are the type of cards that comes with offers and rewards on each credit card purchase.
There are various types of reward cards but the basic rewards cards are the cashback, points, and travel. Some people like to take the offer of the cashback reward over the travel rewards card but those who travel often will prefer to go for the Travel rewards cards. the cash back rewards offer points that can be redeemed for cash or other merchandise. While the Travel rewards cards offer some free flights, hotel stays, and other travel perks.
4. Student Credit Cards
The next on the list is the Student credit cards. These are the card designed specifically for college students taking into consideration their lack of credit history. A first-time credit card applicant would generally have an easier time getting approved for a student credit card than another type of credit card.
These Student credit cards come with some basic rewards and also laws interest rates on balance transfer. To be approved of this card, you have to be enrolled at any of the accredited four-year university.
5. Charge Cards
We have the Charge cards that do not have a definite preset spending limit and then each balance must be paid in full at the end of each month. This type of card does not have a financial charge or a minimum balance. The balances on the card must be paid in full monthly. There are Late payments with this card. The user is subject to fee charge, charge restrictions, or card cancellation depending on your card agreement. Note that you need a good credit history to be approved of a charge card.
6. Secured Credit Cards
Secured credit cards are cards designed specifically for people who do not have a credit history or who have poor credit status. These Secured cards require a security deposit to be placed on the card. Another notable thing about the secured card is that their credit limit is equal to the amount of deposit made on the secured credit card. If your credit score has been damaged then you can go for this credit option to help you build up your credit score.
7. Subprime Credit Cards
Subprime credit cards are not considered as good card options because these credit cards are designed for applicants who have a bad credit history yet the cards have high-interest rates and fees. The approval on the card is quick for almost all applications even for those with bad credits. The Federal government has even placed rules on the amount of fees subprime credit card issuers can charge, but the card issuers often look for loopholes and ways to skirt these rules.
Well, many people ignore the high fees and still apply for them because they feel they have got no other option.
8. Prepaid Cards
The Prepaid cards are another card for the user to choose from. These cards often require the cardholder to put money into the card before the card can be used. Then Purchases made are withdrawn from the card’s balance. The spending limit on this card does not increase unless more money is added to the card.
Prepaid cards do not come with finance charges or minimum payments because the balance is always withdrawn from the deposit you’ve made.
Prepaid cards are just like to debit cards, but are they not tied to a checking account. People use these cards as a method within the stipulated budget.
9. Limited Purpose Cards
The Limited purpose credit cards are Store card used like credit cards. They come with minimum payments and charges. It can only be used at specific locations.
10. Business Credit Cards
The last type we will look at in this list is the Business credit cards. These cards designed for business owners with an easy method of keeping business and personal transactions separate. It is for business use only up it requires the credit history of the business owner to be approved of the card.