Which Type of Credit Card is For You?

Which Type of Credit Card is For You?

Which Type of Credit Card is For You?

Credit cards are a convenient way to replace cash. In a single card, you can pay all of your bills with one swipe. This is why more and more people are opting for credit cards instead of carrying around real cash. However, what most don't realize is that there are many types of credit cards to choose from. Each card has its own purpose, depending on what you can afford. Choosing the wrong type of card could prove to be disastrous for your finances, damaging your credit score and getting you into debt. This is why it's very important to do research and know your options before committing to a card. In this article, we'll be discussing a few of the most basic types of credit cards and their specific uses.

1. Regular/Standard Credit Card. This type of credit card is very common. Almost everybody has one of these. It has a revolving balance, which you can use to make your purchases. After a specific amount of time, usually at the end of the month, you'll have to give back at least the minimum payment. A credit limit is set to reduce the risk of overspending. The user shoulders the finance charge, which is added to the remaining balance at the end of every month. Failure to make the minimum payment will mean penalties and fines.

2. Premium Card. Premium credit cards are just like the standard credit card, but with a few benefits. Users of premium cards will get reward points, travel points, rewards, and even cash back promos. This doesn't mean, though, that you'll get profit from your purchases. Platinum and Gold credit cards usually have very high fees, and may sometimes have hidden charges.

3. Prepaid Credit Card. If you want to have the convenience of a credit card, but are afraid to overspend, this is the card for you. The credit limit is set when you deposit money into the account. The money is then consumable. You don't have to pay every month, because you don't owe the bank anything.

4. Limited Purpose Credit Card. These cards are much like your standard card, but you'll only be able to use it in specific stores. Gas credit cards and credit cards for specific department stores are examples of limited purpose credit cards.

5. Specific Credit Cards. There are other types of standard and premium credit cards for you to choose from. For example, student credit cards are used by college students because the program is patented to fit their needs. Travel cards are also available, which will come in handy for those who travel around a lot for work.

Because there are so many different types of credit cards, it would be best to do a lot of reading. Don't hesitate to take your time when you're looking for the right card, because that could mean the difference between a good credit score and complete bankruptcy. With this basic knowledge in mind, you'll be able to learn more about the credit card your company is offering you

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