Not all credit cards are the same. No I don’t mean they are different colors, or have different designs on them. Different card issuers have cards types of cards. So how do people know they are picking the right credit card? There are cards that have rewards programs, cards with low interest rates, cards for people that have bad credit and cards for people with special needs.
The first thing that most look for in a credit card is the interest rate. Cards may have a low introductory rate and offer great rates on balance transfers, but these may be nothing more than teaser rates. Reading the fine print can save some from paying as high as a 30 percent APR. Look in the fine print for the variable rate or how high the rate will go after the introductory period.
For some time, banks have been offering rewards cards. These cards give a chance to accumulate points that you can trade in for products, such as airline miles, gas, and even cash. Even with these cards, due to the amount of money that has to be spent to qualify for any of these rewards programs, people may be better off just buying their own plane ticket or coffee maker. Rewards cards also cost business owners more to accept because they typically have a higher Interchange rate. In the end, the biggest rewards on these cards go to the banks and associations.
Often people with bad credit assume they are not eligible for a credit card. People with poor credit can consider prepaid cards or secured cards. Prepaid cards allow you to deposit a set amount of money onto the card and then the card can be used just like a traditional credit card, even making purchases online. Prepaid cards are a good way for parents to allot money to kids in college without having the risk of them going over the limit like with a traditional credit card.
Secure cards are cards backed by a paycheck. The bank that issues the card is ensured payment because any due funds are typically deducted from the person’s paycheck. If someone simply has bad credit and needs a credit card, they can always opt for a high interest, low limit card. But if they are in a bad credit situation, my advice is to opt out of a credit card altogether.
Some cards are considered specialty cards. There are business cards, contactless cards, and high roller platinum cards. Banks claim that platinum cards have high limits, low fees, and great rewards programs. But like I said before, the color of the card doesn’t matter.
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