Type Of Credit Cards


People apply for credit cards for different reasons. If you want a credit card for a particular need, you might want to check whether the one you apply for is really the one you're looking for. Different types of cards serve different purposes. Familiarize yourself with these various types to find the one that you really want.

1. Low interest rate

This type is best for a person who does not like to wait for too long to pay the bill. Generally, the interest rate set for this plastic money is very low - only a few percent. However, the low interest rate is only valid for around six to nine months. After that particular length of time, the interest rate will jump up to around 14 to 16 percent.

2. Student

College students frequently have difficulties in applying for credit cards due to their lack of credible financial history. To apply for this type, a student is not necessarily required to have a financial history. On the contrary, the credit card will help the student in building his or her credit record. However, most companies set lower spending limits and some even charge higher interest rates for this type.

3. Travel or airline

Also called the frequent-flyer or airline miles, this charge plate accumulates points every time the holder uses it for traveling. When the points accumulated reach particular amount, he or she may exchange them for a free plane ticket. If you are a regular flyer, having a frequent-flyer card will be beneficial; occasional flyers, however, will be burdened by a pricey annual fee.

4. Rewards

If you buy things very often with the magic card and always pay off the balance every month, you are destined to receive rewards. You can get the advantage of cash back, airline miles, points or other bonuses based on the total money you have spent.

5. Secured

Do you have a bad history with plastic money from the past? Make sure it won't happen again by using a secured credit card. This way, you will be required to report to at least three credit bureaus. You should use it wisely in order to patch up your financial history.

6. Prepaid

Essentially, the prepaid is a debit card that acts like a credit card. You have to deposit some amount of money prior to using it and therefore you can only spend as much as the total money you have previously deposited. Prepaid debit card are a perfect choice for those of you who don't want to risk spending more than you can afford to pay off.

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