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With hundreds of banks to choose from there are literally thousands of credit cards on the market. To make matters even more complex, when searching for a card the applicant must decide whether they want a card that offers certain rewards (Gas, Travel, Hotels, Airlines, Cash back and many others). Or if it is more important to receive a lower Apr, or lower annual fees. In this article we will examine the different types of credit cards, and hopefully by the end of this rant you will understand your options that best suit your needs and interests.
LOW APR'S
When examining Low Apr cards there are several factors you need to take into consideration. First, is the cards 0% APR for a certain amount of months off-set by an eventual higher APR. Also, does the lower APR include cash advances if you tend to borrow money on the card rather than using it only as a product or service purchasing card. These are important factors as they will help determine your overall interest on purchases and cash advances.
REWARDS
The promise of rewards is often very tempting, and I completely condone using a rewards card, as they are my preferred type of card. However, determining your rewards are an essential part of choosing your card. Airlines cards tend to be popular because of the ability to lower airline ticket prices. However, in many cases the amount of money you have to spend to receive the points and the amount of times the points last, offset the actual ability to use the points. In this case you accrue many points only to have part of them expire. Look for a card that allows you to use the points as needed. Check out the Delta Airlines card which gives new users of the card a $25 dollar discount voucher for signing up and a lower annual enrollment fee. REMEMBER, airline rewards cards hold annual fees as a way to offset part of your airline deductions. However for an avid travel and an avid spender it can be a good thing. As with all rewards cards, make sure you check out ALL the features they offer as well as annual fees, if the fees are higher than your spending on that particular Reward then go with a regular credit card with no annual or low annual fees.
Bad Credit Credit Cards
Bad Credit shouldn't be a dead end, in fact its far from it. Many card companies these days realize the needs of those people stricken with bad credit. Many of these cards ask for a hefty fee, for instance, first premier bank will start you off with a 200 dollar credit line, however, after fees the total left on the card is 50 dollars. If you are trying to repair your credit these types of cards will report to the three major credit bureaus which is a plus, however the fees can range from a few dollars a month, to transaction fees of a few dollars a transaction. Credit cards of this type are a good way to go if you only make several purchases a month and with their higher APR's if you plan to pay off the balance in full at the end of each month. Remember the credit bureaus look at current payments that are made on time to help increase your score.
Pre-Paid Credit Cards
Pre-Paid cards allow the user to place money into their card (Sometimes even by direct deposit) and use their own money for purchases. This is a great plan if you make sure that the cards will report to the major agencies. Known as "Secured Credit Cards" Many of them will report to the three major credit reporting agencies (Experian, Equifax, and Transunion) and help to boost your score for future credit reports.
Catalog Cards
Catalog cards allow their users to purchase merchandise from their personalized catalogs. A warning to the wise, cards that offer 5000 dollars in credit can be dangerous. Many charge up to 200 dollars or more to process the card application, and when you order from their catalogs the prices are oftentimes steep and in many cases require up to a 30% deposit before you can charge the rest of the purchase to their very high APR card. If you choose one of these cards, go online first and check for user complaints and find the prices of their products as well as the quality they offer.
There are many credit cards available, for full comparison charts of the cards offered visit Credit Card Application and Comparison Sitethe online search will allow you to use comparison charts to compare different types of cards and the benefits they can have for you. Good luck to everyone and remember to choose the card that best suits your needs.
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