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Credit Card Types
by: Sahil | last updated: November 05, 2009
Category: Standard Credit Cards | Tags: credit card types, types, credit types, types of credit cards
Category: Standard Credit Cards | Tags: credit card types, types, credit types, types of credit cards
There are numerous types of credit cards and choosing the right one usually depends on a person’s income, credit rating, credit history, and many other factors. However credit cards can be broadly categorized into five basic types according to their nature and functions. It is important to become familiar with the various types of credit cards before you apply for one or even if you want to switch from one card to another.
Standard Credit Cards.
The most widespread sort of credit card lets you to have a revolving balance up to a definite credit limit. Credit is used up when you make an acquisition and made accessible again once youve made a payment. A finance charge is applied to outstanding balances at the conclusion of each month. Credit cards have a minimum payment that should be paid by a pre-determined due date to keep away from late-payment penalties.
Premium Credit Cards.
These cards put forward perks and benefits which are not offered by a normal credit card. Examples of premium credit cards are Gold and Platinum cards that offer cash back, reward points, travel upgrades, and supplementary rewards to cardholders. Premium cards can have elevated fees and generally have a minimum income and credit score requirements. Both standard credit cards and premium credit cards have specific varieties of credit cards. Student credit cards, zero percent interest cards, and travel cards are just a few types available.
Charge cards.
Charge cards do not have a credit limit. The balance on a charge card should be paid in full at the ending of every month. Charge cards normally do not have a finance charge or minimum payment because the balance is to be paid in full. Behind schedule payments are penalized a fee, charge restrictions, or card cancellation depending on your card agreement.
Limited purpose credit cards.
Limited purpose credit cards can only be used at particular sites. Limited purpose cards are used like credit cards with a minimum payment as well as a finance charge. Store credit cards and gas credit cards are illustrations of limited purpose credit cards.
Secured credit cards.
Secured credit cards are an alternative for those with no a credit history or those with flawed credit. Secured cards necessitate a security deposit to be placed on the card. The credit limit on a secured credit card is equivalent to the sum of the deposit made. Secured credit cards have revolving balances depending on the purchases and payments made.
Prepaid credit cards.
Prepaid credit cards need the cardholder to stack money onto the card before the card can be used. Acquisitions are withdrawn from the cards balance. The credit limit does not replenish until supplementary funds are loaded onto the card. Prepaid cards do not have finance charges or minimum payments because the balance is taken out from the deposit. Prepaid cards are comparable to debit cards, but are not attached to a checking account
Business credit cards.
Business credit cards are intended exclusively for business use. They offer business owners with an uncomplicated process of keeping business and personal transactions apart. There are standard business credit and charge cards available in the market.
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