There are many types of credit cards available; here is a list of the most popular being used: Standard Credit Card Most people have a standard credit card which is an unsecured loan from a bank. Usually the bank will ask that you pay a minimum monthly payment and you are charged interest each month you have a balance on your card. There also might be fees associated with the use of the credit card including an annual fee, late payment fee and over the credit limit fee. Secured Credit Cards For people that have no credit history or a poor credit history, secured credit cards are a great tool to build good credit. You usually open up a bank account and deposit money into the account. For instance, deposit $500 and you will have a $500 credit limit. This way, if you default on your credit card, they have your money as collateral, which means no risk to the bank as you build a credit history. However you will usually have to pay an application fee and annual fee for the card. Rewards Credit Cards If you would like to earn a reward for using your credit card, there are plenty of credit cards that offer certain product or services in relation to the amount that use your card for. If you want to earn a free flight, you can sign up for a credit card that will earn you free miles with each dollar you spend. After a few months, you might find that you have earned a free trip to your favorite destinations. Low Introductory Interest Rate Credit Cards Many credit cards offer low or zero percent introductory interest rates when you apply for your credit card. These rates dont last forever, usually either for six months or a year. They are a great way to make big purchases that you would have done with cash or are great for transfering your existing credit cards over to the new card, enjoying a lower or no interest rate. |
