Knowing Different Credit Card Types

Owning a credit card is indeed a status quo nowadays. This is why almost everybody wants to own one. With the pressure of advertisements from financial companies and banks, you would almost want to jump in and join the bandwagon instantly. But before you do so and apply for a card, check out these credit card types first:

Secured credit cards. Cards of this type require security deposit to serve as collateral before the application gets approved. People with poor credit standing or no credit reports at all enjoy this card type while they build up their credit histories from zero.

Personal properties, such as jewelry, stock certificates or shares, houses or boats, pass as collateral. Before you avail of a secured credit card, read the terms and conditions stipulated in the application process since from here, you will create your credit history.

Business credit cards. Businessmen with executive or directorial positions and entrepreneurs prefer these card types. This type of credit card offers exclusive privileges for those who belong to the business circle.

Student credit cards. These credit cards are tailored to suit students' credit needs. Cards of this sort are catered to the financial status of students without credit histories. Students availing this credit card must properly take care of this privilege because they can start to work their credit history through these cards.

Prepaid credit cards or debit cards. These cards can be used in establishments that accept them, just like traditional credit cards. But first, you have to deposit or transfer money into your prepaid or debit account before you can use your card. This is not exactly your typical credit card since you have to load it up first before you can swipe it. You cannot spend beyond what your prepaid credit card amount only has.

Currently, this type of card is gaining popularity because of its zero interest and it does not come with annual fees or membership fees, like the ordinary credit card. However, there are still costs you have to consider, like maintenance fees.

Balance credit cards. This is an unsecured card that allows holders to transfer their other credit card balance to this card for lower interest rate charge. A low interest credit card is also an unsecured standard credit card with lower introductory APR that only increases in interest after a period of time. Take advantage of this card with low APR and shop huge. If you love to travel, you can avail of an air mile credit card to earn points for the miles you fly. You can work up these points to nix free airfare.

Specialty credit cards. These cards are ideal for people with special interests to form their purchases. This is also a standard non-secure card type.