Today, credit cards come in different levels, with varying fees, reward programs, and interest rates. Before you apply for a credit card, it’s important to identify which one will best suit your lifestyle and financial situation.
Listed below are some of the most common types of credit cards:
Balance Transfer Credit Cards
These cards allow consumers to transfer the balance from a high-interest credit card onto a card that offers a lower interest rate. Typically, these cards have an introductory APR (annual percentage rate) of 0%. This teaser or introductory rate lasts for several months or even a year. However, keep in mind that the terms of balance transfer credit cards vary, so ensure that you go through them carefully.
Low-Interest Credit Cards
These cards offer either a single low fixed-rate APR or a low introductory APR that jumps to a higher rate after a certain time. When it comes to making large purchases, low-interest cards can be very useful, since it allows several months to a year to pay it off with no or very low interest. Go through the terms and conditions of the introductory offer so that you are prepared to pay the accumulated interest when needed.
Cash Back Credit Cards
This card allows you to earn rewards while you make any purchases. The more you use your card, the more cash rewards you will receive. Usually, cash back card users earn around 1% of their total purchases, excluding finance and interest charges. Some cards offer a higher cash back percentage for particular purchases or select merchants, while others offer a higher cash back percentage with increased usage.
General Reward Points Credit Cards
These cards are like cash back cards- the cardholder can collect points toward a reward structure, depending on how much you use the card over time. These cards offer different items to cash in points for things like pet supplies, gift cards, jewelry, electronics, plane tickets, hotel stays, and more.
Remember that the programs and promotional offers of reward points cards keep changing. While most of these cards have no annual fee, some of them come with an annual fee. For people who pay off their balances every month regularly, reward cards are a great choice, as they can reap benefits from associated reward cards.
Some of The Other Types of Credit Cards Are as Follows:
– Student
– Hotel and travel points
– Business
– Retail rewards
– Prepaid
– Gas points
– Secured
– Airline miles
