Different Types of Credit Cards

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Different Types of Credit Cards

Okay, folks. Let’s not vilify the credit card. It’s not the vile enemy as others depict it. If truth be told, credit cards when used correctly give huge advantage and expedience. 

How you use it and how you manage it will determine whether it is beneficial for you or not. For people who know how to manage their funds and know-how not to spend outside their means, credit cards can give great deals. 

Shop now, pay later. Easy access for shopping online. Discounts and freebies. Rewards. And if you’re a good payer, acquiring a good credit history, which will help you apply for loans with lower interest rates. 

These are just some of the advantages of having a credit card. Plus bringing along credit cards is more secure rather than bringing wads of dough when you’re shopping — especially when you’re abroad. There’s no need for you to go through currency exchange. 

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These are just some of the advantages of having a credit card. Plus bringing along credit cards is more secure rather than bringing wads of dough when you’re shopping — especially when you’re abroad. There’s no need for you to go through currency exchange. 

You can also plan your purchases and get deferred payments with no interest. And if you’re disciplined, you can keep tabs on your expenses as you’ll see how much money you spend when your monthly bill comes. 

So perhaps now, you are considering applying for a credit card. The next thing you need to know is the different types of credit cards and then find out which one best fits your needs and objectives. As mentioned earlier, when a credit card is managed well, you may end up saving money and getting more benefits. 

Ready? 

Before you get one, bear in mind that not all credit cards are created equal and there are some types that might be more advantageous to you. 

Cash Rewards Credit Cards

This type of card allows you to redeem your points for award travel, online shopping credits, or gift cards. More often, cash rewards credit cards offer a flat cashback every time you make a purchase. For example, some cards offer a 2% cash back for every dollar you used up. 

Essentially, you earn one percent every time you buy and earn another every time you pay. Other cards offer rewards that earn 5% cash back for every $1,500 USD purchase. There are other cards that offer 2%cash back on grocery expenses or 4% back on restaurant and other entertainment expenses. 

It really depends on the credit card, so it’s best to check out the fine print. Also, some cash rewards credit cards offer bank account deposits. 

Travel Rewards Credit Cards

This type of credit card is probably the most typical. Under the travel rewards credit cards, there are different sub-types. 

One of the most common sub-types is the Airline Hotel Flexible Rewards Credit Cards. This has the highest budding in earnings. Sometimes, this type of card allows you to earn points through groceries and gasoline purchases. 

There are branded Airline travel rewards cards that offer benefits for loyalty programs like priority boarding, free checked-in luggage. 

This is particularly beneficial if you’re a frequent flyer. 

Some cards of this type offer reward points even if you purchase from different airlines and hotels. Other cards offer great benefits like the use of airport lounges, travel upgrades, and travel credits. 

Business Credit Cards

As the name suggests, this type of credit card helps you use your business expenses to the hilt. Some of these cards offer bonus points for purchases like office supplies, gas expenditures, and even travel. 

Others give bonuses for online purchases like advertising for social media. Just like the travel rewards credit cards, there are other types of business credit cards under this category. 

Check out those cards that help you set up their business credit score. Also, it’s good to check out those with zero annual fees.

Student Credit Cards

This type of credit card has small scale limits, but this allows students to enjoy more rewards compared to non-students. Some credit cards offer a statement credit if the student maintains a certain grade point average. 

If you’re a good payer, you qualify for rewards credit after finishing college. Some cards may also offer higher credit limits, there are no annual fees, and earns points from every purchase. 

That’s a load off your back —and not worry about those additional fees. 

Balance Transfer Credit Cards

This type of credit card offers the user a great way to pay off their balance. Some of these types of cards can offer longer zero percent introductory offers. 

It could be a good choice for you especially if you have good credit standing because aside from the zero percent offer, you can also earn rewards on your new card purchases. However, some cards are committed only to balance transfers. 

It’s still not a bad idea, especially because most of them come with a zero percent term. This card is best especially for those who need to get their cash flow back on track. 

As long as you handle your credit cards well, your credit score will grow, regardless of the type of credit card you get. In the long run, you can be eligible to apply for cards that give more perks and advantages as well as more rewards points.

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