Multiple Types Of Credit Cards. And How To Use Of Them!

Every credit card account on the market has positive aspects and negative aspectto using it. There are hundreds of different credit card accounts offered, but we will explore three different types of cards in this article and help point out who benefits the most from each type of card, as well as the potential up sides and negative aspectof each.

Secured credit card accounts

If you’ve ever had difficulty with your credit card account use in the past, or you’ve had trouble repaying your financial obligations you may be limited to a secured credit card account option. Secured charge card accounts are not the appropriate choice for someone who has reasonably good credit, because they have higher interest annual percentage rates and fees than a traditional charge card account.

up sides of Secured charge card accounts: If you fall into the below average category of credit scores and payment histories, but want a second chance at rebuilding a good credit score for your future – the secured charge card account category gives you that opportunity. If you do a little comparison shopping before applying, you can find a secured charge card account that reports your payment history to the three credit bureaus- which is exactly what you want them to do. This way, you can make payments on the card responsibly and be credited for your new and improved financial habits through a repaired credit score.

Secured charge card accounts may also be an option for someone who does not have a credit history yet – someone who has just moved into the country, or a young adult just out of school for example.

negative aspectof Secured charge card accounts: Being a “secured” card means that you have to put down a cash deposit in order to get the card. This deposit is what makes it secured. You can expect to pay between $100 and $250 for a secured charge card account application. In addition to making a deposit to obtain the card, you’ll also likely have to pay high interest aprs in comparison to non-secured cards on the market. Most secured cards also charge an annual fee for the privilege of using them, so if you are only able to get approved for secured cards, be sure to compare the cards in this category before selecting to try and find the one with the lowest annual fee, lowest deposit required and lowest interest interest rates.

Rewards credit card accounts

People who prefer to do most of their spending and purchasing on a credit card account each month, and who are diligent about paying their balance off in full each month are the best candidates for a rewards card. In fact, a rewards card quickly becomes unrewarding if the user does not have financial discipline to pay it off in full each month, so weigh your decision carefully when considering a rewards card.

up sides of Rewards credit card accounts

Depending on the rewards card you choose, you can earn cash back on each purchase, travel discounts or free travel, or points towards merchandise based on how much you spend on your card. People who use a card all month long for all expenditures and pay them back in full each month can quickly build up rewards and really get more for their dollar than people paying with cash or non-rewards cards.

down sideof Rewards credit card accounts

Some rewards cards come with high annual fees that actually end up costing as much (or more) as what you earn in rewards. If a reward card has high interest interest rates and you are unable to pay your balance off in full each month to avoid paying the interest, chances are you will pay more in interest than you earn in rewards, as well. Another disup side to some rewards cards is they don’t always make it easy to redeem your earned rewards, so be sure to understand the policies of the program.

Low or No Interest credit card accounts

Pretty much anyone who wants to pay existing debt down or keep their credit card account purchases at reasonable interest annual percentage rates would enjoy a low or no interest charge card account.

positive aspects of Low or No Interest charge card accounts

During the low or no interest period on a credit card account, more of your payment goes toward paying off the balance and less to the interest. If you can secure a balance transfer card with no interest, you can save a fortune in interest if the card that currently holds the balance has a high interest interest rate.

down side of Low or No Interest credit card accounts

Most cards with very low or 0% interest are only temporary annual percentage rates. Once the promotional period ends the card interest interest rate goes up to the normal APR which can be between 10 and 18%, depending on the card. Also, if you make a payment late to one of these cards once during the promotional period, you will immediately be charged the higher annual percentage rate and lose out on the interest free period.

You can find all 3 types of charge card at JemCreditCards.com. I personally advise Discover cards.

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