There are plenty of credit cards in the market today from a variety of different issuers. That’s why credit cards are virtually the cornerstone of the current American economy.
When you’re in the market for a new credit card, it is best to shop around to find the one that best suits your needs. Sometimes choosing a credit card can be very confusing. Every credit card is different, so how do you know which one is right for you?
To begin, there are some main types of credit cards that you need to know about to help you make an informed decision. Here are 5 types of credit cards that you should know about.
Balance Transfer Credit Cards
One thing that you should know about a balance transfer credit card is that you need good credit to qualify to get one. With this card, you can transfer balances at a low introductory rate.
That means that if you need to save on a high interest-rate balance, this is the best way to go. Of course, other credit cards offer the ability to transfer balances, but not at a low rate like a balance transfer credit card. These cards may go as low as 0% for an introductory period.
Rewards Credit Cards
Many cards offer rewards or bonuses for purchases, but not quite as much as a rewards credit card will. The rewards can be anything from travel benefits to bonus points, or even cashback. These cards come in varying categories with varying conditions; it all depends on what you’d like. If you are thinking about getting a rewards credit card, shop around! There are many different rewards terms and options out there, so find what works for you!
Everyone would love to have a credit card that doesn’t have a present spending limit. This is what charge cards offer you. Unfortunately, there is a catch. You have to pay the balance in full at the end of the month with this card.
Failure to do this will cause you to be subject to restrictions, fees, and even cancellation. For this card, you need a good credit score to qualify. Banks will not hand out these cards to just anyone.
Business Credit Cards
As the name suggests, business credit cards are meant for business purchases. Also, they’re best used to build your business’ credit score while you’re growing your business and you’re in need of supplies.
Most business credit card issuers will give great rewards to their cardholders. Some will even give extra points for any online purchase that you make with the card. Using a business credit card is quickly becoming the best way to grow and build businesses today.
Secured Credit Cards
Most credit cards on the market today are unsecured rather than secured. The difference is that a secured card requires a security deposit to operate the card. When you have a low credit score, a secured card might be the best option for you to get a credit card.
That means that your credit will be equal to the deposit you make on the card, as opposed to unsecured credit cards, where you only depend on your credit score. Also, it can be a great way to build your score, as every time you pay, you have a positive history that increases your score.
Knowing about some of the main types of credit cards on the market today can save you a huge hassle of settling on one that might not be right for you. But once you do decide to choose a card, it is easy to make a clear and informed decision on which one best suits you. Now that you have a better understanding of the 5 main types of credit cards, its time to decide if you are ready for your own credit card.