3 Basic Types of Credit Cards

Guaranteed credit cards are best for people who have trouble repaying their financial obligations in the past or those that have low credit scores. The great thing about this particular card is that it gives people with bad credit the chance to start rebuilding their own credit score. Since secured cards possess higher interest rate and certain fees that do not come with traditional credit cards, this card may not be the best option for people who have relatively excellent credit.

Notice than a “secured” card means cardholders has to put down a cash down payment before they are able to get the card. In addition , certain charges may apply like annual fees and higher rates of interest.

Rewards Cards

Rewards credit cards are made especially for people who do most of their spending and purchasing using a credit card. People who are able to pay off their stability in full each month are the best use this type of card. Other benefits of rewards bank cards are cash backs, where the cardholders earn cash backs each time they use it to make a purchase, travel discounts or free travel to certain destinations and earning points for certain goods or services.

That said, rewards cards do have several drawbacks, one of which is the high annual fee. Some annual charges are so high, it actually expenses much more than what cardholders acquire in rewards.
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Another disadvantage of benefits cards is that redeeming the points earned is not as easy as one may think. Before you think of getting this kind of card, be sure to read the policies of the program first.

No Interest Credit Cards

No interest card is the best approach to people who wants to keep their credit card purchases at affordable interest rates. One particular advantage of this card is that more of the cardholders’ payments go towards paying off their balances rather than paying for the interest. Cardholders can literally save numerous dollars in interest.

However , simply no interest credit card offers temporary prices only. As soon as the introductory period is over, the interest rate goes back to the regular APR, which is roughly between 10% to 18%, depending on the card. Additionally , once a cardholder makes a late transaction during the introductory period, he will instantly be charged with increased interest rate and lose all the interest-free days he’s left.

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