Different types of Credit Cards to cater to your needs

It seems like everyone has at least one credit card. With so many different types of credit cards it is hard to decide which one is right for you.

This guide will examine a variety of credit cards and who can benefit from them.

Low Interest Credit Cards

Low interest credit cards offer low interest rates. These cards are usually reserved for those who have good credit. The main drawback of a low interest credit card is the lower interest rate. This is particularly attractive for consumers who carry a balance. A lower interest rate results in lower charges. This allows more money to go towards your balance and helps pay debt quicker. It is extremely important that all credit payments are made on time, as even a single late payment could cause your low interest rate to increase. Low interest cards are not particularly appealing to consumers who consistently pay balances in full each month.

Cash Back Credit Cards

Cash back credit cards work by offering the cardholder a small incentive for using the card. This incentive is in the form of a cash back rebate given to the customer. It ranges from 1 to 5 percent of the total purchase price. Each cash back card has different terms for releasing the rebate, as some only allow a customer to cash out rebate once a year. Others require a cardholder to accumulate a certain amount before the rebate is released. These cards also target consumers who have excellent credit. These types of credit cards are more suited for individuals who pay their balance in full each month. Consumers who carry a balance will not be able to accumulate any savings as they will incur charges.

Rewards Credit Cards

Rewards credit cards operate in the same way most cash back credit cards work. However, instead of receiving cash back, customers select to earn points and apply to a reward that is offered by the credit company. Many times these rewards include hotel stays, frequent flyer miles or items like gift cards or higher end merchandise. Consumers need to carefully read the terms as some rewards cards charge an annual fee and have higher interest rates. Customers who pay their balance each month will benefit most from a reward card. Consumers with excellent credit ratings are most likely to be approved for a credit card with a rewards program.

Airline Credit Card

Airline credit cards are cards that offer frequent flyer miles, usually connected with a specific airline. Many of these cards have annual fees and high interest rates. These cards are particularly beneficial for cardholders who travel extensively. These cards are also targeted toward consumers who have excellent credit.

Instant Approval Credit Cards

Instant approval credit cards are cards that inform the applicant about their approval status immediately. They are not delayed for further processing .Approved applicants receive their cards within 5 to 7 days. Instant approval cards vary in their interest rates and annual fees and require good to excellent credit for approval.

Balance Transfer Cards

These cards offer enticing offers for customers who are able to transfer a balance from another credit card. Many of these offers include an extremely low or zero percent interest rate, with terms ranging from 6 months to the life of the balance. This type of card is beneficial for consumers who carry a balance on their cards and have good credit.

Business Credit Cards

Business credit cards are specifically targeted toward businesses. They offer flexible credit limits, rewards programs and track expenses. Many business cards offer low interest rates. Most business cards charge a small annual fee. These cards cater to those in small business and usually require good credit.

Student Credit Cards

There are several different types of credit cards available for students. Some offer cash back or a rewards program, but most have higher interest rates and others charge an annual fee. Student cards are typically targeted toward young adult students who have little or no credit history.

Credit Cards for Bad Credit

For those consumers who have a bad credit history, credit cards with bad credit are available. These cards charge a high annual fee, high interest rates and other fees that are automatically billed to the account. It is best to carefully review the cardholder agreement when opening a credit card for those with bad credit.

Secured Credit Cards

Secured credit cards are issued to consumers who have a less credit history. These cards require the cardholder to deposit funds and collateral, into an account set up by the card issuer. The credit limit is equivalent to the amount of funds deposited. It is extremely important to read the fine print in the terms and conditions. Many secured cards charge high annual fees and you may find that you have very little credit.

Prepaid Credit Cards

These cards are perfect for individuals that no credit history and no bank accounts.

With a prepaid a consumer loads a specific amount of funds into the account. They then have access to that amount only. Once they have accumulated purchases equal to the amount of the funds loaded onto the card, they can no longer use the card until more funds are added. They offer the convenience of a credit card, but control spending because they are only good for the amount of funds available in the account.

There are different types of credit cards; some are low interest credit cards, while others are perfect for consumers trying to rebuild their credit.

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