Credit cards come in various types: low interest credit cards, cash back credit cards, reward credit cards, secured and prepaid credit cards, and others. Depending on your financial situation, one type may be better working than the others.
If you prefer to have an unsecured credit card, meaning you don’t need a security deposit, you may apply for a standard credit card. It may come with an annual fee and lower interest rate or no annual fee and higher interest rate. The way annual rates are calculated and offered varies depending on the provider. Low interest credit cards are one example of a standard credit card. They come with a low introductory APR or a fixed-rate APR. They are often offered with no annual fee. This credit card is quite useful if you intend to make a large purchase as you will have a couple of months to pay it off.
Rewards credit cards allow card holders to earn bonus points when charging purchases to their cards. The more one uses the credit card, the more rewards points accumulate. Avoid applying for cards that come with a limit on the points you can earn. The points can be exchanged for a variety of items such as plane tickets, accommodation, electronics, gift cards, and more. Promotional offers and reward programs frequently change; so, make sure you check the terms before applying.
Cash back credit cards work on the same principle, with cardholders earning cash back for making purchases on the credit card. Credit cards that limit the cash back to be earned to the amount of the annul fee should be avoided.
Retail rewards credit cards are a type of credit card that is co-branded with some of the key retailers. You accumulate points by charging everyday purchases to the card, earning more points on purchases made from the retailer.
Secured credit cards require that the applicant puts money on the card. A specified amount is deposited in the amount of the card limit and serves as a security deposit. In general, this type of card is for persons with no credit history and those who are rebuilding their credit history.
Finally, prepaid credit cards are accepted in many places while they are not real credit cards. The major advantage of having one is that no finance charges are incurred, and the holder does not run the risk of accumulating debt.