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5 Types of credit Cards & how to use them

By: Makemymoney

In our previous blog, we already learn about a credit card for low-income candidates, but there are many other types of credit cards available. Credit Card is a big relief as it saves time from standing in a queue of ATM. This is not the only benefit but each type of credit card holds some unique type of advantage example credit card for low income,  cash back card, reward card etc. For each transaction, these cards offer some point in the form of reward which user can be redeemed for any purchase. There are numerous types of credit cards spread across a dozen issuers. The very first thing to keep in mind while choosing one for yourself is to figure out what type of card will fulfill your need. The cards range from basic no frills to premium with a lot of perks and benefits. In this blog, we will talk about 5 Types of Credit Cards & how to use them.

Basic Credit Card

A basic credit card is like plain vanilla ice cream because such cards offer no rewards or frills. Unlike other credit cards, they are relatable easy to understand. Those who are not interested in the complicated deal and don’t want to earn rewards they can apply for Basic Credit Card. The card is used up when the user makes any purchase. Finance charges are applied to it at the end of each month. These credit cards have a minimum payment that should be paid before the due date to avoid late payment penalties.

Reward Credit Cards

These credit cards offer reward point after each purchase. Rewards credit cards are of three types; Cashback, travel, and points. Some people prefer to take cash back rewards and some are flexible for points. These earned points can be redeemed for cash or another purchase purpose. However, travel credit cards are good for those who are frequent travelers. As they can earn free flight tickets, travel pack or hotel stays.

Business Credit Cards

These are specifically for fulfilling business related needs. This helps an owner to keep their personal and professional transactions separate. For Business credit cards your personal credit history is checked by an issuer. There are standards charge cards and business cards issued by banks and financial institutes.

Secured Credit Cards

These credit cards are for those who have no credit history or bad credit history. Secured cards require a security amount that remains placed in cards. In this, the credit limit is typically equal to the amount deposit. Also, this deposit limit could be more also, depending on case to case. It’s worth noting that user still expected to make monthly payments on his or her secured credit card balance. 

Balance Credit Cards

Although you can make money transfer from other credit cards also but Balance credit cards are designed for this purpose. This credit card offers low introductory rates on balance transfers for a certain duration of time. You can save money on high-interest rates on an existing card such cards are a good way to go. Cards interest rate varies from low to a certain percentage. The lower the promotional rates more attractive the card will be.

 

 

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