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Seven Popular Credit Card Types
Credit cards today are very effective methods of making financial transactions. They are convenient and time-saving. They are also safe and reliable. You can be overwhelmed by the number of offers being thrown at you. We will look at the prevailing market and some features.
1. Prepaid Credit Cards (stored value cards) - The total amount stored on these credit cards must be paid up-front to the company. They are also called by the name 'debit cards'. They don't carry any finance charges. They help you avoid getting into credit card debt. You are only able to spend what you already have.
2. Secured Credit Cards - This type of card requires you to put up collateral to get approved. They are for helping people with bad credit to rebuild their credit histories. Your collateral can be a car, boat, property, stocks, jewelry, or anything with the necessary value.
3. Business Credit Cards - This type of card is tailored for business. Using special incentives such as higher credit limits, or special business rewards, or additional cards for employees can help to streamline business processes. Each card carries its own offers and promotions.
4. Bad Credit Credit Cards - These are also known as 'repair' cards for repairing your credit. They come with a higher interest rate but help to boost your credit rating.
5. Low Interest Cards - These offer you an introductory APR that is low. They may change to higher rates after a specific period of time. You can take advantage of these introductory low APRs to make large purchases.
6. Student Credit Cards - This type of card is most often a student's first crack at building their credit history. They are designed specifically for the needs of students. They don't require any previous credit history. They help students handle school expenses and give them low interest rates with easy repayment options.
7. Reward Cards - These usually give you rebates and other incentives to use them. They sometimes have the cashback options to entice you. There are a lot of reward cards out there and some of these are:
a) Cashback Credit Cards - You can get cash rewards when you use these cards. The rates for them can vary. It's a good credit card if you follow your repayment schedule earnestly. When used properly these cards can return a substantial amount of cash to the customer.
b) Gas Reward Cards - The incentives here are for fuel for your car and other vehicles. These incentives can come as point based or as cash based benefits that you can redeem toward their described offers.
c) Airline Reward Cards - This type of card gives you incentives aimed at purchases on your air travel. This can be frequent flyer miles. These incentives can also be in the form of points or cash that you can redeem toward further air travel.
Customers need to have a discussion with a consultant in order to totally understand all terms and conditions involved with their card regardless of which one they choose.