Credit Cards

This article examines the different types of credit cards available and what you need to know about them ...

In today's day and age, it seems like everyone has or wants to have at least one credit card. Everywhere you go you see adverts from various banks and other financial institutions offering you credit cards. However, before you apply for a credit card, there are several factors you need to consider. So it’s very important to know more about the different types of cards available, and which one will work best for you.

Secured credit card

Secured credit cards are cards that require a security deposit as collateral before you can get approval. This type of card is better suited to people with no or poor credit who are trying to build their credit history. Your collateral must be equal or greater in value of the credit amount you are applying for. It can be anything of high monetary value like boat, jewelry, shares, house etc. Just like any other cards, you have to make sure that you study the terms and conditions associated with this card very well before taking the card, especially if you are trying to build or rebuild your credit history.

Business credit card

These cards are available for business owners, directors and business executives. These cards are just like most traditional credit cards, except they come with several features that are ideally suited for business purchases and business-related spending. Again, study the terms and conditions for these types of cards carefully before applying.

Student credit card

Student credit cards are a type of credit card specifically designed for students. These cards are made for students because of their general lack of credit history. Essentially student credit cards allow students to build their credit history with credit cards.

Prepaid credit card

Prepaid credit cards are a set of cards that are acceptable wherever traditional credit cards are accepted, but they are not credit cards in the "true" sense of the word. You have to transfer money to your card before you can make use the card and you may not be able to spend more than you prepaid for the card. 

This is generally a good credit card for people that want to avoid interest and other fees charged on traditional credit card.  However, other charges like monthly fees, application, overlimit and ATM fees are still applicable.

Whichever card you choose, make sure that you read the terms carefully before applying, in order to avoid putting yourself in financial bondage.

In the second part of this article we continue looking at different types of credit cards.

For more information about credit cards and credit card rates, visit the "resources" section of this website, or go to articles about credit cards.

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