There are a number of credit card options available around. The best way to know the right credit card out there for your needs is by knowing their uses and making an informed decision. For choosing the right credit card, you have to start with figuring out what your needs are. This can be done by making a list of the things for which you are willing to use a credit card. These are some of the types of credit cards that provide you with a range of benefits.
It is important to know the types of credit cards before you apply for one. Source: IndiaLends Blog
Most common types of credit cards
Standard Credit Cards
Standard Credit Cards are the most common types of credit cards used around. They are also known as “Plain-Vanilla” credit cards because they tend to offer you no rewards or frills. They are very straightforward, and you don’t find any problem in understanding their working. Mostly, people use it because they are not complicated; they just want to use a card without any hassles or in the desire of earning any rewards.
The most attractive feature of this credit card is that it allows having a revolving balance up to a fixed limit. You can use credit when you want to make a purchase, and the credit is available to you once you make payment. Also, you have to pay a finance charge on your outstanding payments at the end of the month. But it is not a bad thing if you are good at managing your finances. Also, there is an option of paying a minimum payment that can be paid by the end of a certain due date in order to keep late payment penalties away.
Balance Transfer Credit Cards
For your information, there are many credit cards available that come with the ability to transfer balances. The only need for having a separate balance credit card is when you frequently make a balance transfer. These types of cards offer you a low introductory rate of interest in making balance transfers in a certain period of time. They are the best way to avoid paying high-interest rates levied on an existing card.
Some of them even offer you interest rates as low as 0%, but there is a catch. Some of the cards have qualifiers. For example, there can be a condition attached, such as making a minimum of two transactions a month. Look for a balance transfer credit card that offers a low promotional rate and longer promotional period. Also, these types of credit cards demand you to have good credit quality.
Reward Credit Cards
The most attractive credit card of all, as the name suggests are reward cards. They offer rewards to you whenever you can make a credit purchase. They come in three basic variants that are:
People tend to love the flexibility that comes with cash back rewards. They have a clear advantage over point cards where you can redeem the points to get cash or merchandise. Travel reward cards have recently gained a lot more attention. Frequent travelers are the most benefitted by them; you can even win a free flight or a hotel stay or other travel perks.
Student Credit Cards
Student credit cards, as clear from the name itself, are designed for college students. Students or young adults that have little to no credit history can apply for these cards. If you are a first-time credit card applicant, usually, they are the best way to get easy approval on your application.
So, they are not boring or plain we must say as the standard credit cards. They have their own perks. You can enjoy a low-interest rate on balance transfers and other rewards on purchase. But the most important thing to note here is you have to be enrolled in an accredited university to get an approval. If you fulfill this requirement, go for it.
These were some of the most common 4 types of credit cards that you can go for depending upon the requirements. However, there are other available options too, such as charge cards, secured credit cards, subprime credit cards, limited purpose cards, business credit cards, prepaid cards. Choose the one by aligning their benefits and utility with your needs.