Are you thinking about getting a credit card?
With all the different types of credit cards, it’s difficult to decide which one is the best for you.
In this article, we’ll break down the main types of credit cards to help you choose the best one for you.
1. Secured Credit Cards
These types of credit cards are not as advertised but they serve a specific purpose. Secured credit cards are for people with bad credit or no credit at all.
When you apply for a secured credit card, you’ll put a deposit down for the same amount of the credit line. The deposit is guaranteed for the bank because they want to be covered in case you don’t pay the balance.
If you make your monthly payments your credit will improve and in most cases, you will get your deposit back after a determined amount of time.
2. Rewards Credit Cards
There are wide varieties when it comes to rewards credit cards, but the most popular are travel and cash back credit cards.
With travel reward credit cards you’re able to collect points or miles for flying or staying at hotels when you use the card to make purchases.
You can get airline-specific credit cards if you always travel with the same airline. Another option is to get a generic airline credit card which allows you to collect perks no matter what airline you choose.
Cash Back Rewards
Cash back credit cards give you a percent of cash back from all of the purchases you make.
They often give you 1% cash back on regular purchases and up to 5% on promotional categories.
3. Balance Transfer
Balance transfer credit cards give you the option to move a high balance from a high-interest card to a low-interest rate.
These cards have an introductory 0 percent APR for several months which gives you the opportunity to pay off a high balance without accumulating high interests.
These cards allow consumers who have accumulated a high balance in another card and want to pay it off without interests.
4. Low Interest
Like balance transfer credit cards, low-interest credit cards offer a 0 percent introductory APR. After the introductory period is over, the percent might go up, but it will remain low compared to other cards. Of course, this depends on the type of card you get.
These cards are useful for customers who have to make a large purchase because they are given up to 18 months to pay off the balance with no interest.
However, you have to read the fine print because some cards will make you pay off all of the interest if you don’t pay in the time allowed.
Main Types of Credit Cards Final Thoughts
There are many variations of these main types of credit cards. The key is that you know what your needs are and match it to the best credit card available.
If you enjoyed this article and would like to learn more about how to make the most of your credit card, visit our blog.