Picking the right credit card from the hundreds of options spread across the market can get very confusing. The key to making the right decision is choosing a credit card based on what your needs are. These can range anywhere from a no-frills credit card, to a premium card that offers exciting benefits.
Here’s a list of four types of credit cards that everyone should consider getting:
Standard Credit Cards
Standard credit cards are usually referred to as “plain-vanilla” credit cards since they don’t offer any rewards or frills, making them relatively easy to understand. If you are new to the world of credit cards and are not interested in earning rewards, this might be a good fit for you! Standard credit cards provide you with a predetermined credit limit that gets used up when you make a purchase which becomes available to you once you make the payment. Credit card companies usually levy a charge on outstanding balances at the end of each month, you must pay a minimum amount by the due date to avoid these late-payment penalties.
Balance Transfer Cards
A balance transfer credit card, as the name suggests, is perfect for balance transfer purposes. It helps you save money by transferring a high-interest rate balance from your existing card onto a new one.
Balance transfer cards offer low-interest rates that can be as low as 0 percent, but these usually charge a fee for each transfer, plus you’ll need good credit to qualify.
Rewards cards have three basic types: points, cash back, and travel. While some people prefer the redeemable quality of rewards cards, others like the flexibility offered by cashback credit cards. Travel rewards cards and their ability to earn free flights, hotel stays, and other perks make them a favorite among frequent travelers.
Prepaid Credit Cards
Unlike other credit cards, prepaid cards require the cardholder to load them up with money before they can use them. This means that the purchase limit does not get renewed until the card is reloaded.
Since the spending gets withdrawn from the deposit you make, there are no finance charges or minimum payments required with prepaid cards. The only downfall of these cards is that they don’t help you rebuild your credit score.