Between email inboxes and the mail, consumers are inundated daily with credit card offers of all kinds. Most of the time, these offers end up in the trash, but for those who give them credence, the real question remains: are these offers worth it?
Finding the Right Credit Card
With all of the financial institutions and companies offering credit cards, it can be difficult for individuals to sort through all of the options and find a card that fits their financial needs. That’s precisely where our credit card comparison tool can come in handy. Using this tool, those looking for just the right credit card can compare and contrast all of their options before selecting the one they want.
There are many different types of credit cards available for consumer’s today.
Here are the most popular:
Airline (or Travel) Credit Cards
Air (or travel) credit cards can be a very attractive option for those individuals who travel frequently. These cards essentially award the cardholder with points that can later be redeemed for discounted and/or free flights.
These types of credit cards can be further subdivided into three types, which include:
- Airline credit cards
- Frequent flyer cards
- General travel credit cards
Bad Credit Credit Cards
These types of cards are often associated with very high interest rates. However, if someone with bad credit or no credit is looking to improve their credit, there’s no denying that these types of cards can be quite useful.
Bad credit credit cards come in two basic types, namely secured and unsecured.
- Secured Cards: Secured credit cards function far more like debit cards than credit cards. With these cards, the cardholder must have money present in an account in order to use the card. Close attention must be paid in order to make sure that adequate funds exist; otherwise, the card cannot be used. This can be a great way to control and monitor spending, and to help those who’re new to credit cards or have experienced struggles with credit in the past to make sure that they are living within their means and not overextending themselves. These types of cards are particularly useful for those who have poor credit or no credit, and are unable to acquire an unsecured card.
- Unsecured Cards This option functions most like a typical credit card and as the name implies, this card is not “secured” with actual funds in an account.
Balance Transfer Credit Cards
Balance transfer credit cards are attractive to many, as they are associated with low or zero percent interest rates. It’s important to remember, however, that while this may feel like a “get out of jail free” card, that’s certainly not always the case. Many companies that issue these cards have “hidden” fees when balances are transferred etc., so it’s essential for the consumer to thoroughly research each card and company before making a decision
Business Credit Cards
Many businesses today choose to acquire their own credit card to make business-related purchases, such as supplies, gas, IT equipment, and the like. Many of these cards have incentives attached, such as cash back awards, etc. If paid off responsibly every cycle, business credit cards can be a great way for business owners to make the purchases they need while enjoying some perks as well.
Cash Back Credit Cards
Cash back cards are essentially a way to make free money, as long as the card is paid back in full each cycle. These cards will typically offer a cash back award of between 1 to 5 percent, depending upon the company’s individual policies and limitations. For those cards that have a higher cash back reward incentive, limitations are likely, such as to the total amount of cash the consumer can get back or the types of purchases that generate rewards.
Gas Credit Cards
Gas credit cards are another popular type of card, especially among those who travel frequently while on the job. The cash back rewards for a gas card can vary, but can be as much as 5 percent. Depending upon the gas card acquired, cardholders can either gain cash back rewards through purchasing gas at specific locations or, for certain cards, at any gas station of their choice.
Hotel Credit Cards
These types of credit cards are popular among consumers who frequent hotels on a regular basis, as these cards allow the individual to earn free stays and complimentary upgrades. There are two primary types of hotel credit card, which include:
- Sponsored cards that can be used only at a select chain of hotels
- Unsponsored cards that can be used at any number of participating hotels and chains
Instant Approval Credit Cards
As the name implies, instant approval credit cards typically only take a few minutes to be approved. These types of cards are appreciated for their convenience and the quick turnaround associated with application and approval. However, it’s important to note that while the approval process may be quick, approval is certainly not guaranteed. The requirements to obtain these cards will widely differ based upon the card and the issuing company. Consumers must familiarize themselves with the eligibility requirements associated with each card so that they can have a better idea of which card is best for them.
Low Interest Credit Cards
Low interest credit cards attract consumers due to their low starting or fixed interest rates. These types of cards are ideal for those individuals who do not make a habit of paying off their total balance each month. The interest rates associated with these low interest credit cards can vary greatly, so individuals looking for a card of this kind should make sure to compare and contrast numerous options before making their selection.
Prepaid Cards or Debit Cards
These types of cards are not associated with the common dangers of credit cards, as they require the individual to have money on hand before making a purchase. These types of cards are ideal for those who’ve struggled with credit cards in the past or those who’re new to credit cards in general. In other words, using a prepaid or debit card can be a great way for individuals to learn responsible spending behaviors.
These types of cards work in a similar way to credit cards, except that the card is backed by actual funds that are sitting in the individual’s bank account. If no more funds are available, the account will need to be refilled or no more purchases can be made.
Reward Credit Cards
These types of cards can offer perks of many kinds to consumers. Depending upon the card, cardholders can earn free trips, hotel stays, meals, gas, cash back, etc. Though it may seem like a given, consumers should make sure that the types of awards the card will earn are things that will actually end up being redeemed. For example, consumers who don’t like to travel should perhaps opt for a card that provides restaurant rewards instead of free airline tickets.
Student Credit Cards
Designed for students and young credit card users, student credit cards typically have lower limits and are often of the secured credit card variety. A student credit card should be selected carefully. The cardholder should look to acquire the lowest possible interest rate and cash back rewards and perks if possible. Additionally, the credit card company should have policy in place that will allow the cardholder to increase the limit gradually as creditworthiness and responsibility is proven. These types of cards serve as an excellent opportunity for students and young adults to be taught the value of responsible spending and prompt bill payment.
Travel Credit Cards
Travel credit cards are essentially more broad versions of hotel and airline credit cards. These cards can be used to earn gas, airfare, as well as hotel stays, depending upon the card and the issuer. As with all types of cards, travel credit cards are not created equal. The consumer should make sure to choose a card that is as free of limitations as possible and provides rewards that will prove useful to the individual.
Our Useful Credit Card Comparison Tool
As shown, numerous credit cards exist for the convenience and benefit of the cardholder. However, the responsibility still lies with the consumer when it comes to choosing the right type of card and issuer from which to acquire credit. Using our tool, our goal is to help consumers to make the right choice for themselves and their financial future.
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