Standard and Reward Credit Cards
Nowadays more and more people are looking for credit cards to help them procure something even though they don’t have money. If you have a credit card or thinking about getting one, you learn to use it responsibly and discreetly. Before also applying for credit cards you should also learn the type of card that you would need. There are now different types of cards that cater to various situation of the person who needs it. Here are the following types.
1. Standard – these are the typical credit cards that are easily available from banks and other financial institutions. These cards are unsecured. The annual percentage rates they offer vary. It could be offered or be computed.
a. Balance Transfer – it allows consumers to transfer the balance of a purchase with a higher interest rate to a card that has a lower interest rate. It helps the user save money from the interest charges. Be sure to read thoroughly the terms and conditions for each card. Their offers vary.
b. Low interest – the APR they initially offer will e low but will eventually change after a certain period of time. If you’re lucky you might find a low fixed interest rate. I.e., the items that you have purchased for the 1st 6 months of the introductory period will have 5% interest. Any balance or purchases made after that will have 10% interest.
2. Reward programs – the user is given rebates, cash back rewards or other incentives for purchases made on the card. This will tempt some users to use the card more.
a. Airline mile – this is like a frequent flyer card. Every time you use your card, you will have an additional point that will be added on your airline miles. This reward plan is very costly to the credit card company so they usually charge an annual fee. Remember to read the details of this reward program. This type of card is great for people who love to travel.
b. Cash back – as the name implies, you are given a certain amount of cash every time you make purchases with the card. It goes like this, the more purchases you make using your card the more cash rewards you get. The rates are usually 1% of the total purchase, excluding the interest and finance charges. This type of card also has an annual fee. This type of card is suggestible for people who pay their debt on time.
c. Reward credit cards – similar to cash back cards but just offer different rewards. Their rewards include gas rebates, entertainment rewards and store discounts for specialty store cards.
Tags: Credit Cards, Budget, Spending Money, American Express, Debit
