Types of Credit Cards
Types of Credit Cards
We all know that a credit card is used to pay for goods and allows us to make payments over time instead of all at once. Credit Cards are accepted all over the world and in fact if it weren’t for credit cards the economy would not be able to operate.
There are many types of cards out there that are tailored for specific needs. We all use cards for the same basic reasons but we also want different services and perks in return. This is a great way for credit card companies to entice us to apply or use their credit card. Let’s have a look at some of the different types.
0% Balance transfer credit card: This is the most popular and has been for many years. As there are more and more credit cards available in the market people tend to have more than one card. The average is about 3 – 4 with many people having even more. In this instance you are able to transfer your balances between cards at 0% so you are not charged any interest for a certain period. This can last from 6 – 18 months. The only charge is the transfer rate which is usually about 3% of the value of the balance you are transferring. You are also only able to transfer up to 90% of your credit limit.
Lifetime Balance Transfers: This is another balance transfer credit card that allows you to transfer a balance at a very competitive Apr. The offered rate will last until you pay off the balance no matter how long it takes. Rates vary but you will usually find it will be at least half of what the average Apr is in the market place.
Cash Back Credit Cards: These are very popular for people who spend quite a lot but also pay back the balance or most of it every month. You basically earn money back based on the amount you spend. Check the small print because you usually have to spend quite a lot in order for it to be worth your while.
Air mile Credit Cards: These work very similar to the cash back credit cards but instead of getting money back you earn points towards your air mile. This is a great incentive for frequent flyers which is why BAA has introduced its own credit card which gets customer loyalty to the airline.
Reward Credit Cards: These types of credit cards are a combination of the Cash back and Air mile cards. Store cards could be classed as reward cards but some of them carry a heft interest rate and in most cases should be steered clear of.