In a world where a dizzying assortment of credit card kinds is promoted to customers, it’s easy to become overwhelmed. Each credit card, however, has a certain purpose. So, in order to be well-informed, all you need to know is which credit card fulfills which purpose. In this post, we will list all of the credit cards given by various banks, so make sure to read them till the end!
What are Credit Cards?
Types of Credit Card
There are various categories of credit cards that offer unique services. Here, we will try to give a brief idea of each of these credit cards and their
Rewards Credit Cards
Rewards credit cards often provide points or cashback based on a percentage of your expenditure, and some even provide extra points in popular areas such as grocery, petrol, and eating out.
Rewards credit cards usually provide at least a few different methods to redeem your points, such as statement credits, gift cards, or items. As a result, they are an excellent credit card alternative for everyday spending when you know you will be able to pay off your card straight away. When you use a rewards credit card to make everyday purchases like groceries and home supplies, you may receive cashback and travel rewards for purchases you would have made otherwise.
Cashback Credit Cards
Cashback credit cards make it simple to receive cashback or statement credits on your purchases, while the manner in which rewards are distributed differs from card to card. Some choices in this category provide a flat rate of rewards, while others provide extra points in specific areas such as eating or vacation. Some even provide extra incentives in different categories each quarter, as well as a set rate of rewards on all non-bonus purchases.
If you tend to spend more in some areas, such as groceries or restaurants, a bonus category card may be preferable to a flat rate card, which is perfect for consumers with diversified expenditure who are seeking an everyday card.
Travel Credit Cards
Travel credit cards allow you to earn rewards tailored exclusively to travel, such as flexible travel credits, which can be applied to any travel transaction or points that can be transferred to airline or hotel programs. Some travel credit cards also allow accumulating points inside a specific program [s a frequent flyer program/hotel loyalty program].
If you frequently travel for work or some other reason, you should look for luxury travel credit cards that provide benefits such as airport lounge access, yearly travel credits, and credits for Global Entry or TSA Pre-Check.
Balance Transfer Credit Cards
In case you have high-interest credit card debt, you could think about utilizing a balance transfer credit card to assist manage and paying off that debt. The finest balance transfer cards provide an introductory 0% APR for a period of 15 to 21 months, which may provide you with a welcome reprieve from paying interest charges while you focus on paying off your debt. Most cards have an upfront balance transfer cost of 3% or 5%, while there are certain credit cards that do not charge a balance transfer fee.
Zero Percent APR Credit Cards and Low-Interest Credit Cards
There are other credit cards that provide 0% APR on purchases for a short time, generally up to 18 months. Credit cards in this category can be quite useful if you need to make a major purchase & wish to pay it off over time without incurring interest. Similarly, you’ll discover low-interest credit cards that provide lower-than-average rates year after year, not only during an initial offer period.
Business Credit Cards
Business credit cards allow customers to segregate their personal and business costs while earning rewards on all business spending. Business credit cards, however, may also be cashback credit cards, general rewards credit cards, travel credit cards or even secured credit cards. To qualify for a business credit card, you must have a business or an income-producing activity.
In general, a smart business credit card will help you gain from your daily expenditures and make operating your business easier.
Student Credit Cards
Student credit cards are “starter credit cards” designed exclusively for young people with little or no credit history. In other words, because the application standards are less severe, it is easier to get authorized. Most student credit card does not have any annual fee, and many provide additional bonuses for high grades as well as incentives for every dollar spent. Signing up for a student credit card may help young people build credit and develop excellent financial habits if handled carefully.
Secured Credit Cards
The majority of credit cards are secured, which roughly means you don’t have to put up any collateral. Secured credit cards, on the other hand, need a cash deposit in order to secure a modest line of credit, generally for a comparable amount. While putting down collateral may not seem ideal, secured credit cards are the easiest sort of credit card to get accepted for, so they are frequently useful when you need to establish credit from scratch or repair your credit after a financial setback.
Store Credit Cards
Store credit cards are issued by retailers to allow customers to charge their purchases and pay them off over time. Store credit cards are often used just within the store that offers them, while certain store credit cards can be used across several establishments.
Store-branded credit cards typically have higher interest rates than general-purpose cards and are more likely to levy delayed interest. Deferred interest implies you’ll get a low or 0% introductory rate for a set period of time, but if you don’t pay off the entire balance within that time, you’ll be charged retroactive interest.
Co-branded Credit Cards
Co-branded credit cards are store or brand credit cards that are available via typical card issuers such as Chase, Citi, or American Express. These can range from airline credit cards that allow you to earn miles through a specific frequent flyer program to hotel credit cards that allow you to earn points through a hotel loyalty program. Some co-branded credit cards also work with retailers; however they may usually be used for non-retail transactions as well.
Bottom Line
Finally, consider credit card fees as well as long-term carrying expenses. Not only should you evaluate the interest rate on your credit card, but you should also keep an eye out for annual fees, late fees, application costs, over-the-limit fees, and any other expenses you may have to pay.
Hey Guys! My name is Richard Andrew. I am a contributor to the Strategy Watch. I have finished my graduation with a major in Economics. My interest areas are Economics, Financial Analysis, Stock Analysis, and Business Strategy.