Common Types of Credit Cards

When trying to find the credit card that best fits your needs, it is important to familiarize yourself with all of the different credit card types that are available. You will find that there are standard credit cards, business credit cards, reward cards, prepaid credit cards, as well as credit cards for those with poor credit.

Standard Credit Cards

Standard credit cards, also commonly referred to as personal credit cards, are the most commonly obtained type of credit card. They are used by many for personal purchases. Standard credit cards, although they are the most popular type of credit cards available, cannot be obtained by all. Most credit card companies require that their new cardholders have a fairly decent credit score. Therefore, if you have a poor credit score, you may find yourself unable to obtain this type of credit card.

Credit Cards for Those with Poor Credit Ratings

As previously mentioned, if you have a poor credit score, you may be unable to acquire a standard, personal credit card. However, a poor credit rating does not mean that you do not need a credit card. That is why a number of credit card companies have started to offer credit cards that are designed for those with poor credit ratings. As nice as these cards are, you will often find that they are stacked with fees and high interest rates. These extra rates and fees are often used for security purposes by credit card companies.

Reward Cards

Reward cards are how credit card companies reward consumers for using their cards. For instance, with reward cards you will tend to accumulate points for your purchases. Overtime, your points will accumulate and then you can cash them in. Depending on the type of rewards card you have, you could get cash back, free airline miles, other free
merchandise, as well as free gasoline. Reward cards are ideal for those who will be using their credit cards on a regular basis.

Business Credit Cards

Business credit cards are for business owners and business owners only. In fact, many credit card companies require that you show proof of ownership or participation in a business before they offer you an approval. This is because, in a way, many business cards are like reward cards. A large number of credit card companies offer incentives for business owners who use their cards. These incentives may include cash back or reward points, which can usually be used to purchase additional business equipment or supplies. As with most personal credit cards, many business owners are required to have a decent
credit rating to obtain this type of credit card.

Prepaid Credit Cards

Prepaid credit cards are different then all of the above mentioned credit card types. Instead of getting a line of credit, you create your own. You do this by placing money onto your credit card. In a way, prepaid credit cards work like debit cards. Prepaid credit cards can be used at any retail store that accepts credit cards. They are great for teenagers or those with poor credit.