Credit cards are plentiful and sometimes too easy to come by. Everywhere you go you see advertisements from various banks and other financial institution offering you a credit card.
There are several factors you need to consider before you apply for a credit card. Knowing the various types of cards available will help.
Secured credit card
Secured credit cards are cards that requires a security deposit as collateral before you can get approval. If you have poor credit or are trying to build your credit history, you may have to go this route. Your collateral must be equal to or greater in value than the credit amount you are applying for.
Just like any other cards, you certainly need to study the terms and conditions associated with this card. You are risking some valuable property to obtain it.
Business credit cards
There are certain credit cards available for business owners, directors and business executives. They come with several features just like any traditional credit cards. You have to consider the terms and condition for these types of cards too before applying.
Student credit cards
are cards specifically for students. These types of cards are made for students because they lack any sort of credit history, so these cards give students a chance build their credit history.
Prepaid credit cards
are acceptable wherever the traditional credit cards are acceptable, but they are not credit card per se. You will have to transfer money to your card before you can use it and you generally can't use it for more than you have transferred.
This is probably the best card for people that want to avoid interest and other fees charged on traditional credit card. Beware of the other charges they may carry such as monthly fees, application fees, over the limit and ATM fees
Balance credit cards
are unsecured standard cards designed to allow consumers to save money in interest charges by transferring higher interest credit card balance onto a lower interest rate credit card.
Low interest credit cards
are other types of non secured standard credit card. They offer either low introductory APR that change to a higher rate after a certain period of time or a low fixed rate. You can take advantage of the low introductory APRs to make larger purchases now and pay them off several months later.
I have to admit I use these often. I'll take a card that may have a large amount due, possibly from a trip to visit my in laws or from a family vacation. I'll transfer it to a no interest card and make certain to pay it off before the term runs out. There is usually a transfer fee of 3%.
Air Mile Credit cards
are cards that are used by those who travel frequently or are planning to go on vacation. It’s a form of reward card that allow you opportunity of obtaining a free airline ticket. You will need to accumulate specified air miles before you can be entitled to free ticket. All accumulated mile points will be based on dollar amount of your credit card purchases over a period of time based on predetermined point level.
Make sure that you study the terms of any of the credit cards you are considering. Also, when you pick any of the reward cards, make sure you study the forms and offers thoroughly because credit card issuing companies do offer different reward programs and their promotional offers often change.
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