A Look at the Different Credit Card Types
Every financial decision you make is an important one. Making the wrong decision can lead to trouble or at the very least, less than favorable rates. This is certainly true of picking a credit card. The credit card market is awash with numerous different offers and even picking the right type of credit card can seem difficult. Introductory offers, lifetime lows, cash back cards, gasoline cards, reward program cards, air mile cards and travel reward cards are only some of the offerings, do you know the best type for your requirements?
Strictly speaking, of course, these aren’t a specific type of card but as a general rule credit cards can be broken down into those with introductory offers and those with lifetime low rates. Introductory offers do vary in size and style but it is not uncommon to see credit cards offering 0% interest for 6 months for all new customers. This 0% APR will not necessarily be on all transactions you make with your card and the most common 0% introductory offers are concerned with balance transfers and purchases. A balance transfer allows you to transfer the balance from your old credit card on to your new one, and if you use a card with 0% balance transfer for a set number of months then you will not need to pay any interest until this period ends.
Lifetime Low Rates.
In contrast to cards with introductory offers that may have very high rates once the introductory period expires, credit cards with lifetime low rates offer preferential rates throughout the life of the credit. Usually you will notice that these lifetime low rates are tracked to the standard and offer a discount of x% below that rate. If you intend to keep the same credit card for any lengthy period of time then you will ordinarily find that those with lifetime low rates are your best bet.
Cash Back Credit Cards.
Every time you spend money or complete certain transactions using your credit card you will receive a certain amount of cash back. These cards are ideal for the heavy credit card user because they offer something back. It is not unusual to see credit cards that offer 3% cash back on all purchases, but similarly some cards may offer 3% on specific items such as gasoline but only 2% on all other purchases. You need to look at your existing credit card use and take into account the most common way you use your card. This will help you determine whether a cash back credit card is ideal for you, and if so which one will suit your requirements the most.
Rewards Program Credit Cards.
Reward program credit cards work in a similar way to cash back cards but instead of receiving cash back you will receive points or discounts. Usually you receive a number of points for every $1 that you spend and once you reach a certain limit you will be able to redeem these points. Gasoline cards are becoming popular because of the price of gas being so high. Most gas credit cards give you points when you purchase gas and these points relate to discount against gas purchases. There will be a minimum amount you must spend before you can receive your free gas, but if you often purchase gas for your car on your credit card then a gas card is ideal.
Which Card Is Right For You?
These are just some of the different types of credit card that are available, but you should be aware that there are plenty more; too many to mention in fact. You should look at your current credit card usage to determine how you most frequently use your card and how often you make the repayment. Do you pay back the full limit every month or just the minimum? By knowing these facts you should be able to determine the best credit card for you and once you know this information then it’s time to start looking around. Use your current usage to calculate how much your repayments would be with each card and this will help you ensure you get the best value from your next credit card.