What are the different types of credit cards? Credit cards are open ended loans that allow us to swipe away things that we need as of the moment. We are then given by the banks some sort of spending limit. This limit, however, can be increased or decreased depending on our credit attitude. If you are a good payer, then your credit line can be increased. If not, then you are most likely to get a decrease. Credit cards have been vital parts of our wallets. We use it almost every day, everywhere. This is why more and more types of credit cards are being brought to us by credit card companies and banks. This is done so that we can be able to choose which ones can give us most benefits.
The Zero or low interest credit cards are types of credit cards that are best for people willing to pay their existing credits quite quickly. Most of the cards that belong to these types of credit cards are being offered bargains in the balance transfers from other cards. The main disadvantage of these types of credit cards is that the low rate that one can get may only last for up to 9 months. It can then become something higher, and can cause problems when it comes to payments. The problem is that if you miss at least one payment the higher rate may be imposed right away.
Rewards types of credit cards are those that are meant to give its users bonuses and discounts. These are the types of credit cards that are best used by people who use credit cards a lot. Here, you get points and bonuses every time you use your credit card. Therefore, you get more perks the more you use your cards. Reward cards can give you cash backs, discounts, airline miles, and many other kinds of perks. Some credit card companies offer like a 5% cash back and some take out their annual fees and other fees involved in using it. The main disadvantage of these cards is that they might have high interest rates. Most of the time, these interest rates will offset the bonus points so it wouldn’t make sense. Therefore, make sure that you always read the fine print before getting one.
The secured types of credit cards are those that are best used by people who have been in awful credit card history. You see credit card companies report to the credit bureaus. Among the other types, this is the one that reports each and every activity to them. Therefore, if you want to repair your credit rating, it is best that you get one of these. This way, you will be able to show them that you have all intentions of fixing your credit.
Lastly, there are student types of credit cards. These are credit cards that are especially for students. These can be used to establish credit ratings. There are also many different benefits that one can get from this. The disadvantage, however, is that among all the types of credit cards, these are the ones who charge the most interest rates.