Types of Credit Cards

Standard credit cards? Rewards credit cards? Which one should you get? There are credit cards that are suited for those who keep traveling from one port to the next while there are those made for credit repair.

Below are the different card types offered by lending companies.

Standard Cards

Standard cards are cards with revolving credit lines. These cards are given to people who meet or exceed a bank’s minimum financial requirement. These cards do not have any rewards programs.

Rewards Cards

There are different rewards cards, this includes cash back ones, ones that accumulate points to earn rewards, and ones that are called premium cards also known as gold and platinum cards. Rewards cards are cards that give certain points to their cardholders in exchange for rewards –it could be a television set, a trip abroad, etc- for a certain number of points or amount of purchase. Some cards also give rewards to frequent flyers i.e. the miles one accumulates can be used for future flights. Although rewards cards are great for people who are fond of getting free stuff through points, many of these cards have very high annual fees as well as high interest rates that they tend to cancel out the benefits of getting rewards.

Secured Cards

Also called pay-as-you-go cards, these cards are usually used for credit repair. What this card requires is for the cardholder to deposit a certain amount to determine the card’s credit limit. A certain percentage, usually 50 to 70 percent is usually put forward as the card’s limit. Although the money used is the cardholder’s, the fees are a lot higher compared to regular cards. The reason behind this is that companies are lending you a card for you to improve on your credit rating.

Zero to Low Interest Cards

Much like secured cards, these cards are designed for credit repair. If you are willing and are able to pay off all your existing credit card debts in a course of 6 months, then getting a zero-to-low-interest card is a good option. However, you should ensure that you can pay for all your credit card debts in this amount of time or risk having to pay larger fees after the 6-month-period.

Specialty Cards

These credit cards are usually offered through partnerships and affiliations. They are also cards used or offered by service providers for their customers to get freebies or certain discounts when using their credit cards.