Did you know that 40% of Americans with credit card debts don’t know their interest rates? Credit cards are an essential part of our lives that are easy to use and have suitable repayment options.
Credit cards can help you secure future loans and rental applications. Your line of credit allows banking institutions to see an active credit history based on your credit card usage and repayments. It serves as a way to gauge your loan application creditworthiness.
The different types of credit cards in the financial industry make it hard to know the right one to use, though. This article discusses the different types of credit cards that can work for your spending and financial goals.
Rewards Types of Credit Cards
These credit cards will either give you points or cashback on a percentage of your spending. You might find some offering bonus points in popular categories such as groceries and gas.
Reward credit cards allow you to redeem your points through statement credits, gift cards, or merchandise. You can use your cash reward to reduce your credit card balance or buy holiday and birthday gifts.
Travel rewards will earn you and your family free trips.
Business Credit Cards
Business credit cards are helpful to many types of business, whether domestic or multinational. These cards help to separate your work and personal expenses. This will come in handy when it comes to filing your taxes.
How you earn your rewards will vary from one business credit card to another. Some will offer a flat reward rate for all purchases, while others might have higher rewards for business-related purchases like office supplies.
Even so, business credit cards often offer higher credit limits than consumer credit cards.
Student Credit Cards
The banking industry has more relaxed credit requirements that make student credit cards easier to qualify for. The good news is that you likely won’t pay an annual fee.
Besides, you could get many bonus perks for good grades and rewards for every dollar you spend. A student credit card can help you build a good credit history when used responsibly.
Secured Credit Cards
Are you struggling to qualify for a card? You must check what lowers your credit score to work towards getting one. You can also look into secured credit cards.
A secured credit card is the most accessible credit card to get approved. It helps if you’re new to credit or when building it.
You’ll need to give a security deposit for this type of card. This acts as collateral for the issuer of the card. Besides, using your secured credit card responsibly might even get your deposit back.
Store Credit Cards
Store credit cards are only used in the specific store that offers them. These credit cards allow consumers to charge their purchases and pay them off over time.
Further, store credit cards have higher interest rates than other general-purpose credit cards. Paying off your store credit card balance on time will increase your bonuses and reward programs.
Choosing the Best Types of Credit Cards
Minimizing your credit use and paying bills on time will help boost your credit score. A balance transfer credit card allows you to merge your debts if you have a high-interest credit card debt or other loans.
If you have no loans or other debts, focus on other credit card benefits such as rewards or cash backs.
Browse this page for more information on the types of credit cards in the financial industry.