Types Of Credit Cards

Almost every debtor in the world would like to own a credit card, but not many debtors know which card to choose. A credit card is more than just an opportunity to spend free money. A credit card is also a tool a debtor can use to build his or her credit score. Additionally, an educated debtor can use his or her card to receive discounts on products and services. Some consumers can even earn cash. To select the correct credit cards, a consumer has to learn about the various types.

Balance Transfer Cards

A debtor who has a shaky credit score or several open accounts can improve his or her situation by applying for a balance transfer card. A balance transfer card is a product that allows the consumer to add balances from other lenders to the current card. The consumer usually lists the desired balances during the application process.

This type of card is great for a person who wishes to perform a self-initiated debt consolidation. If the balance transfer card has a low annual percentage rate, the consumer could end up saving money by transferring balances from his or her other loan products.

Low Interest Cards

The annual percentage rate is the most important feature on a credit card. The debtor must pay close attention to this figure as it resembles an amount of money he or she will have to pay each year. Low interest cards usually have a 0 percent annual percentage rate. Credit card companies offer these special products to new cardholders. The introductory period for the low APRs vary according to the creditor's terms. This period can last between 90 days and 18 months. Debtors can take advantage of this special offer by applying for a new account. If the lender approves the application, the debtor can enjoy months of no-interest transactions.

Reward Credit Cards

Reward cards are beneficial to the debtor because they give that person an opportunity to gain incentives for using the card. To qualify for rewards, the user has to purchase specific goods or earn a certain amount of points. Each lender states its terms in the agreement. Interested consumers can compare rewards cards using an online comparison tool. Online comparison tools give the debtor a clear view of available products. They allow the customer to see offers side by side so they can select an offer that fits.

Cash Back Cards

Perhaps one of the most popular types of cards is the cash back card. Cash back cards are products that actually return cash to the consumers. The lender specifies a percentage of cash the customer can earn from using the card. The percentage can vary from one percent to six percent. Whenever the customer uses his or her card on the approved products, he or she receives a cash credit. The card holder can then use the cash to purchase more goods and services or pay his or her credit card bill. Consumers love cash back cards because it seems that they are giving something back.

First time credit card applicants should consider their financial goals before applying for cards. It would also be wise for new applicants to obtain credit scores before completing applications. Cards are available for every credit class. Checking the score will ensure that each person is looking for cards in the correct category.

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