Credit Card Types

 Alec Baldwin pitches a credit card—and wants to know “What’s in your wallet?”  Another celebrity pitches a card that shows a person being showered with all the money they get back from their spending. Are they really good deals?  

When applying for any type of credit card, it is important to research the APR of each credit card, and any fees that are required.  Department store credit cards have the highest interest rate.  Remember your credit history and FICO score determines what level of APR you may be able to receive. A low-interest rate card with a higher credit line requires a good credit history. 

How do you know which card of the dozens out there are best for you? There are many types of credit cards around, traditional credit cards and many others that are widely used.  Here are some of the more popular ones: 

Reward Programs

Be careful with these cards—they often have a higher cost that is not offset by the rewards.  Here is one tool to compare credit card rates and benefits. Be sure that the benefit is one you will use–you are paying for it whether you collect or not.

There are some credit card companies that offer rewards as an incentive to use their card.  For example, every purchase made with Amazon.com yields points.  When you reach 2500 points, you receive a $25.00 Amazon gift certificate.

 Cash rewards are offered by some cards that yield approximately 1% of your purchases. Check here to see when you actually get the cash reward–right away, or when you reach some spending amount.

 There are also cards that offer such rewards as electronics, hotel accommodations, airline tickets, and more.  Depending upon the number of points you attain, this determines the type of reward you can select.  

 Credit cards are also available in conjunction with hotels, airlines, and department stores.  There are gas cards that offer points or rebates, automotive reward cards, home improvement credit cards and, of course, airline-specific credit cards that offer points towards ticket purchases such as the Frequent Flier credit card.

 “Secured” Cards

 If you have bad credit or have filed bankruptcy, there are secured credit cards that require you to deposit a specific amount into the credit card company’s account.  It is equivalent to a debit card, but in this case you are working your way back to reparation of credit.

 Prepaid Cards

There are also credit cards that are prepaid.  This allows you to charge based on the amount of money you have put into an account.  Thus, there are no finance fees to worry about and it is akin to a “pay as you go” type of credit card.

 Business Credit Cards

  Among the other types of credit cards are business credit cards such as American Express and others.  Depending upon the bank, there may be incentives and special offers applied to business owners who open up a business account credit card.  

Cards for Students

Credit cards for students who attend colleges and universities enabling them to begin to establish their credit history. It also keeps the credit line at an appropriate level until such time as the student has proven they can use these cards responsibly.

 

About Karen

Karen Karsten, CPCC, CAC, has had several business careers, in government, finance, retail and publishing. Each career was a building block that helped her create the life she has now as a coach, writer and executive director of Rich Chicks and Creative Principle of Think You Can LLC.

Her companies, Think You Can (www.thinkyoucan.net) and Rich Chicks (www.richchicks.org) both explore the magic of prosperity and creating clarity about life values. Karen has total faith in the magic of belief. Notice how that works either way: belief of magic, magic of belief. Magic is there—in you, too. Take a moment right now and honor the magic in you.

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