A credit card has become an indispensable part of human life. Whether it is offline shopping or online payments, people prefer to pay by cards. Ease of usage, security and quick payment/receipt of funds are some of the popular benefits that make cards a preferred choice of modern day individuals. However, before you apply for a new card, you ought to think about the different types of bank credit cards that are available to meet your needs. Each of the cards provides particular benefits to suit your lifestyle. Bank cards also vary in how they serve your financial goals and current financial situation.
Types of bank cards
There are basically four main types of cards – rewards, low interest, balance transfer and secured cards. The first type of card is ideal for individuals who pay off their bills every month. The second and third types of cards are perfect for those who carry a balance or already have credit card debt. Finally, secured cards are for those who have a bad or poor credit rating.
Rewards credit cards
As the name indicates, this card earns you rewards on your purchases. Some cards pay a flat rate of 1-2 percent, while others provide an extra bonus for spending on certain categories. Rewards are paid out in various forms including gift certificates, checks, free hotel stays and airline miles.
Low interest cards
Low APR or low interest cards are ideal if you carry some credit card debt month to month. In accordance with your financial situation, you can select a card with a low ongoing interest rate or the one that carries no interest for the introductory period. Such a card is pretty handy in lowering your interest and debt burden on cards.
Balance transfer cards
These are perfect for folks who have piled up a lot of card debt to their names. Transfer cards allow you to shift your debt from the current card to a new card and give you a time period of 6 to 21 months to clear your card debt without interest. If you have accumulated substantial debt on your bank cards, a balance transfer card may be the right one to pay off your dues and come out of the vicious circle of debt.
Secured credit cards
Many people have a poor credit rating due to one reason or another. Such people are usually denied a card by banks because of this. If you have poor credit and were denied a card by a bank, you may benefit from a secured credit card. You will be required to post collateral when applying for this type of card. With a secured card, you can build up your credit rating and eventually move onto an unsecured card.
Bottom line
Having a bank issued credit card is a great way to ensure smooth financial transactions on the go. However, you should get your hands on the right card to make the most out of your finances. If you are unsure what type of card you should have, take a look at the information above. By exploring each of these cards, you should be able to choose the right card for your specific needs.
