There are a variety of credit card types, each claiming to offer you the best possible deal˳ Finding the programs and incentives that works best for you is key to maintaining a good credit card history˳
Each type of credit card offer different benefits˳ Some are geared toward the individual consumer, while others are set up to work for small businesses˳ To find the type of card that best fits your needs, let’s review some of the options˳
Business Cards
A business credit card offers the business owner an opportunity to keep business and personal expenses separate˳ The card may offer special business rewards and saving opportunities that go above and beyond what the individual card owner has˳ Since money management is essential for running a business successfully, this card may offer an expense management service that helps track outgoing money˳ You can obtain additional cards for employees who may need them for travel expenses and such˳ You may also have a higher credit limit than you normally would on an individual card˳
Student Cards
Many credit card companies will issue student cards with lower credit limits and fewer incentives, helping new card users to keep their spending in check˳ However, note that many college students now graduate with credit balances averaging from $3,000 to $7,000˳ With high interest rates, these debts can be a real problem to pay off˳
Debit Cards
Prepaid debit cards are 1 type of credit card that has grown significantly in recent years˳ Although it works like a traditional credit card when making a purchase, that is where the similarity ends˳ With a prepaid debit card, you actually set the credit limit yourself by depositing money into the debit card’s account˳ The amount you deposit determines the credit limit on that card˳ This is a great way to have the convenience of a credit card without the possibility of charging more than you can afford to pay off˳
Cards for Bad Credit
Even with bad credit, it is possible to obtain a credit card˳ These cards come with some restrictions not typically found on other types of cards˳ Your credit limit will be lower and your interest rate higher˳ Some may require you to have a secured card, meaning you have to maintain a savings or some other type of account that will cover the expenses on the credit card˳ Once you have established that you will be responsible in your credit handling, some, if not all, of your restrictions may be lifted˳
Cash Back Cards
Many cards will now offer you cash-back incentives for using their cards˳ Depending on how much your balance is, and how often you use the card, you can earn cash back for your purchases˳ Some companies offer 1% off your balance while others, like Sears, will offer you cash off purchases made in their store˳ Either way, if you are planning on using a card, finding one that will offer you a cash incentive is a smart choice˳
Low-Interest Cards
One of the more recent additions to the credit card world is the low-interest credit card˳ These cards offer a significantly lower interest rate than most of the older cards you may already have˳ As balance-transfer cards, most of them offer you the option of transferring a balance from a higher interest rate card and, for a specified period of time, your transferred balance will be at either 0% interest or something quite low˳ This can save you a fair amount of money if your plan is to pay it off˳
Reward and Incentive Cards
Since credit cards have become such a lucrative business, many corporations have jumped on the bandwagon˳ Even airlines now offer credit cards that come with a certain amount of frequent flyer miles attached, depending on your balance and purchases˳ If you do a fair amount of traveling, this can be a real bonus˳ Along these same lines, reward credit cards are growing in popularity˳ Competition is stiff, and many card companies are now offering different reward or incentive options for using their cards˳ Once you accumulate enough points, the rewards pour in˳ These can be anything from travel insurance to small appliances˳ If you use a card regularly, finding one with a reward program can really pay off˳
Instant Approval Cards
Another form of credit card is the instant approval card˳ Once you fill out the application, a quick background check will be done and you will have your approval almost immediately˳ Regular cards can take up to 2 weeks to process˳ Although you can get instant approval, this does not always mean you can get instant credit˳ Some companies will supply you with a temporary credit card number and allow you to begin making purchases immediately, while others will not, due to an increase in credit card fraud potential˳
Protect Your Credit
Since there are so many options in choosing a credit card, you should do a little research before you apply˳ Decide what type of card best fits your needs and apply for that one˳ Don’t go overboard, though˳ Applying for too many cards will negatively affect your credit rating˳
And, above all, once you get your new credit card, use it responsibly˳
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