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Saturday, December 13, 2014
The Most Common Types of Credit Cards
Using a credit card is a very convenient way of buying almost anything, from shoes to a family vacation. But keep in mind that a credit card does not work like a debit card. When you're using a credit card, this means you're borrowing money. But if it's not used wisely, you could incur a bad debt. To help you figure out which type of credit card is best for you, check out the different types of credit cards:
1. Low or Zero Interest Rate Credit Cards: This is most ideal for individuals who are willing and are able to pay card debt quickly. Most providers of such type of credit card offer low rates on balance transfers from other credit cards. A low rate could save you a significant amount of money on interest costs. But the lower rate often would last for 6 to 9 months only, then increases, usually about 14-16% when you pay late. If you transfer a big balance but do not pay it off within the grace period, you may have a higher interest rate compared to what you had at the beginning.
2. Rewards Credit Cards: This is best for people who make most of their purchases using a card and pay off the balance on a monthly basis. Credit card issuers offer airline miles, cash back, and/or other points upon purchase of select items based on the amount of money you spend. Some reward credit cards, for example, offer as high as 5 per cent cash back on selected purchases without annual fee. Some credit cards have high annual fees and rates that eliminates the reward benefits. Other credit cards have unfavourable and complicated redemption guidelines. So it's essential to read an offer carefully.
3. Secured Credit Card: This is best for users who in the past have gotten into some trouble with credit cards. Using this type of credit card wisely could help establish or fix a bad credit rating. But as you apply you'll be asked to give a deposit which usually ranges from $200-$250. Many of these cards have high annual fees and rates so you should read the fine print carefully.
4. Student Credit Card: This is recommended for college students who are able to manage money wisely. Students could qualify for this type of credit card even if they have not established a credit rating yet. Many providers of student cards offer other types of benefits such as discount on bookstores and cash back. But some student credit cards have higher rates. It is easy for students who are not that experienced at handling credit cards to quickly incur unmanageable debts.
If you like to get free legal advice on credit cards, simply visit Consumer Credit Legal Service (WA) Inc by following the given link.
1. Low or Zero Interest Rate Credit Cards: This is most ideal for individuals who are willing and are able to pay card debt quickly. Most providers of such type of credit card offer low rates on balance transfers from other credit cards. A low rate could save you a significant amount of money on interest costs. But the lower rate often would last for 6 to 9 months only, then increases, usually about 14-16% when you pay late. If you transfer a big balance but do not pay it off within the grace period, you may have a higher interest rate compared to what you had at the beginning.
2. Rewards Credit Cards: This is best for people who make most of their purchases using a card and pay off the balance on a monthly basis. Credit card issuers offer airline miles, cash back, and/or other points upon purchase of select items based on the amount of money you spend. Some reward credit cards, for example, offer as high as 5 per cent cash back on selected purchases without annual fee. Some credit cards have high annual fees and rates that eliminates the reward benefits. Other credit cards have unfavourable and complicated redemption guidelines. So it's essential to read an offer carefully.
3. Secured Credit Card: This is best for users who in the past have gotten into some trouble with credit cards. Using this type of credit card wisely could help establish or fix a bad credit rating. But as you apply you'll be asked to give a deposit which usually ranges from $200-$250. Many of these cards have high annual fees and rates so you should read the fine print carefully.
4. Student Credit Card: This is recommended for college students who are able to manage money wisely. Students could qualify for this type of credit card even if they have not established a credit rating yet. Many providers of student cards offer other types of benefits such as discount on bookstores and cash back. But some student credit cards have higher rates. It is easy for students who are not that experienced at handling credit cards to quickly incur unmanageable debts.
If you like to get free legal advice on credit cards, simply visit Consumer Credit Legal Service (WA) Inc by following the given link.
