Credit Card Types 101

Saturday, January 14th, 2012
Updated: January 14th, 2012
The content is accurate at the time of publication and is subject to change.

Amidst the stiff competition that exists today, credit card providers are constantly introducing different kinds of cards to target people from different categories and with specific benefits. The most common kind of credit card is the ‘general credit card’ meant for common public. Besides this type of card, there are also a number of other options such as business credit cards, student credit cards, airline credit cards, store credit cards, secured credit cards and many more. Let us try to understand the different types of general credit cards available today.

Standard Unsecured Credit Cards: This type of card is provided by all credit card providers and is meant specifically for the general public. They are unsecured cards and offered to customers without any security, mortgage or guarantee. Most companies examine the credit rating of applicants before providing them the cards. This kind of card can also be of different varieties such as rewards credit cards and low interest credit cards. Standard credit cards offer the highest spending limits, and many might charge interest in the form of an APR, in addition to an annual fee.

Rewards Credit Cards: These types of cards are good for consumers who understand credit, and want to make their credit card a little more rewarding. Only standard, unsecured credit cards come with a rewards option, but it is not uncommon to find a business credit card with a rewards option as well. With a rewards credit card, consumers are offered cash-back bonuses or redeemable points for using their credit within a certain shopping category. Consumers can get between 1% and 5% cash-back on their purchases in grocery stores, gas stations, retail centers, restaurants and more. With a point reward system, consumers are awarded points based on their purchases, which can be cashed in at the company’s online mall.

Business Credit Cards: Many companies offer credit cards to small or large businesses, which they can use for making purchases related to the company or wherever desired. Business credit cards are similar to standard unsecured credit cards, but offer more flexible payment options, bigger credit lines, business-centered rewards programs, and accounting options to make running a business smoother.

Secured Credit Cards: These types of cards are also known as credit cards for people with bad credit. Therefore, it is obviously meant for people who have a poor credit history and cannot obtain a general credit card due to the same reason. The companies offering the card often put certain restrictions on its use, which is not typically seen in other cards. The credit limit is also lower in comparison to other cards. For example, limits are approximately 50 to 100% of the security deposit. That means, if a consumer puts up a $2,000 for their secured credit card, they will have a limit between $1,000 and $2,000. The most important thing that sets this credit card apart from the rest is that the customer has to deposit a particular amount as security to get this credit card. Since the credit history of the applicant is not checked for this type of card, therefore it is ideal for people who have a bad credit record.

You can easily apply for any credit card online. All you need to do is fill out an online application form, and then submit it directly on the website of the issuing bank or company. Within few minutes, you will be informed whether or not your application has been approved through an email. Once approved, your credit card will be mailed to your address within just a few days. The only requirement is that for secured credit cards you must have enough money to deposit in the form of a security deposit, and for unsecured credit cards a certain credit rating is required for instant approval. Please make sure you read the fine print before signing up for any credit card, so you know exactly what you’re getting into.

All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.

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