Different credit cards perform different purposes for different people. From the different types of credit cards around, it is very crucial that you know the one that should be considered to meet your needs and goals. Knowing this may help you save more funds and also create so many opportunities for you aside from being able to increase saving money.
Perhaps you have a goal of building a good credit history or you need credit cards that can offer you for travel awards and meet other needs. What about balance transfer credit cards since your current credit card(s) interest rate is quite high and you are considering moving into a separate credit card account with many reduced rates. Not all credit cards have equal benefits to users – some offer more benefits to you than others do.
So, it is important that the very first step to consider when making a decision on which credit card to go for is to figure out what needs you want to meet. You will find out credit cards that range from basic no frills cards – also known as ‘plain-vanilla’ – to your premium cards imbued with lots of benefits and perks.
Here Are A Few Types Of Credit Cards To Consider And The Most Suited For You
Secured Credit Cards
If you have no credit history or have a damaged credit status, secured credit cards should be considered. These credit cards require a security deposit that would be placed on the card. The credit limit available on this type of credit card is kind of equal to the deposit figure on the card. However, it could be more in a few cases. These exceptions could be a major default, like defaulting on payment of a mortgage. Bear in mind that an expected monthly payment is still required on your secured credit card balance.
These types of credit cards require that you load some cash onto it before being put to use. And every purchase made is withdrawn from the balance in the card. The spending limit is only renewed when the card is loaded with more cash.
Since Prepaid cards balance is withdrawn from the deposit made into it, they do not have minimum payments or finance charges. The cards do not directly help in rebuilding your credit score and are not really credit cards. While these cards are very similar to debit cards, they however are not tied to a particular checking account. Several users only use them to stay within their budget.
Student Credit Cards
Among the types of credit cards, there are, these types are specifically designed to meet the needs of college students who expectedly have just little to no credit history. Someone who is a fresh applicant of credit cards would find it easier to get approved for this type of credit card than every other type.
Student credit cards come with a low-interest rate on every balance transfer with a few additional perks like rewards. These features however aren’t the most crucial for students who want a first credit card. However, you can apply for this kind of credit card without first being enrolled in an accredited four-year university.
Limited Purpose Cards
Limited purpose credit cards are only good for use in specific areas. They function as credit cards but with finance charges and a minimum payment. Examples of this kind of credit cards are gas credit and Store credit cards.
Balance Transfer Credit Cards
Balance Transfer Credit card gives you the benefit of saving cash on a high-interest rate balance on an existing card. While you’ll often see credit cards come with features to do a balance transfer, this type of credit card offers balance transfers with a low introductory rate for a session. This method is a way to clear credit card balance interest fees (minus up to 3% balance transfer fee).
It has a variety of interest rates. Some of the interest rates are as low as 0 percent, but often with qualifiers such as transfer fees. As low as the promotional rate turns and long as the period becomes, the more attractive the card becomes. But then you’ll often be required to qualify with a good credit.
These cards proffer the opportunity for good credit, as much credit score as 740 or even higher. You will be able to earn points on rewards over the purchase of a new card. However, other cards have balance transfers that can provide longer 0% terms. Their credit card requirements are lenient.
These credit cards have no spending limit preset and the balances must be sorted at the end of every month. Charge cards often don’t have minimum payment or finance charges since the balance is required to be fully paid, while late payment attracts a charge, restrictions on a charge, or even cancellation of cards based on the agreement placed on your card. To qualify, you’ll be required to build a good credit history.
Business Credit Cards
Just as the name implies, business credit cards are functional for maximizing purchases in your business. There are varieties of business credit cards that would help to satisfy your business needs which includes business credit cards with no annual charges for people that want to build their business credit score. Some of these cards provide opportunities to earn bonuses for purchases made online, such as, advertising on social media. The Ink Business Preferred® Credit Card and some other related cards however place priority on making purchases physically at the office, gas stations, supply stores, and travel.
Subprime Credit Cards
These credit cards are among the worse products you’ll find out there. They are patterned for applicants with bad credit history. These cards are also levied with high fees and interest rates. While you can get approved speedily even if you have bad credit, however, the terms can sometimes be confusing.
There are also rules made by the government as regards fees issuers of these credit cards can charge, which issuers try to maneuver by digging out pores to help them deviate from these rules. And despite the fact that this option looks unattractive, many consumers are settled for it since they are not able to get credit somewhere else. But then if you are proceeding, you are doing it at your own risk.
Rewards Credit Cards
Rewards credit cards provide credit card rewards on your purchases. Rewards credit cards are classified into three and are cashback, points, and travel rewards. The flexibility of the cashback rewards makes it attractive to many people, however, others have points that can be gotten as cash or for other merchandise. Travelers find the travel rewards suitable based on the ability to earn hotel stays, free flights, and a host of other travel rewards.
Standard “Plain-Vanilla” Credit Cards
The last entry on the types of credit cards to meet your credit goals are the Standard “Plain-Vanilla” Credit Cards. These types of credit cards don’t offer applicants any rewards or frills. They are simple to comprehend. So, if you aren’t after rewards, and want cards that are not difficult to use, then you should consider these.
The credit cards give the opportunity to applicants to have a revolving balance to a certain credit limit. Once you make a purchase, your credit is used up, and more credit is gained after making payment. The cards have required minimum payment which must be sorted by an expected due date to prevent penalties on late payments.