Credit Card Options
As most of you will be aware there are many different types of credit cards on the market each of these have their advantages and disadvantages depending on your needs, today we will explain what types of credit cards are available to you.
- Reward Credit Card
This type of credit card is the most common and most widely available credit card option, this credit card system was introduced several years ago and has caught on with just about every company offering credit cards this system works on a rewards system that encourages you to do most of your spending using your credit card and in return for doing so these credit card lenders offer you rewards for your spending. You must have financial discipline in order for you to manage the repayments each month.
Some Advantages of credit card rewards include: travel discounts, cash back options or you can earn points in which you can spend / use on merchandise from the credit card companies website and or referred to as their rewards store. There are however some disadvantages to these cards and again it really depends on your spending habits and needs some disadvantages include very high interest rates and not to mention they make it quite difficult to redeem these rewards in some cases you would need to spend $5,000+ using your credit card to earn a reward that only has a $50 value to it.
- No Interest Credit Card
No interest rate credit card / low interest rate credit cards are indeed available all tho they often come with their down sides and or catches, some of these offers are usually set in place to either drum up extra business or offer to pay off your outstanding debts so long as you use their credit card for future purchases and again they will offer you a low/no interest rate for a certain amount of time and before you know it that period is over and you are then locked into a high interest rate. Personally i would avoid credit cards like this or at the very least study the terms and conditions very carefully.
- Secured Credit Card
Should you have a good credit report and or a good track record for paying of credit card debts in the past than you really shouldn’t need to go down this path, if you have had issues paying credit debts in the past than this option will suit you. This option is mainly aimed at those of you who are looking to rebuild you credit score you could look at this option as a second chance or possible a credit card option for a younger person who has no credit history at all.
The general idea behind a secured credit card is that you will need to leave a cash deposit often between say $100-$500 before applying for a secured credit card also in addition to the cash deposit the repayments are quite high as you are a potential financial risk to the creditors, some but not all secured credit cards follow up with annual fees which can exceed 5% of your total spending. Contact your local bank to find out more information before you apply for a secured credit card.
Again i would like to stress to you the importance of shopping around before delving into the first credit card application you receive or view online somewhere, you can really save thousands by doing 30 minutes research in the first place. Our website is full of helpful articles and links that will better prepare you.