Types Of Credit Cards
13 October 2008|
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Are all credit cards created equal? Before you compare the various credit cards offered by various merchants and banks, it is good to know a few main types of credit cards. This will assist you in determining which credit card suits you better.
If you need to entertain your guests or make business trips frequently, the amount you spend may differ from one month to another. Charge cards will be useful to you as they do not have credit limits for your spending. If you make the payments in full each month, you do not have to pay any charges on the short term loans. Diners Cards and American Express offer such cards for travel and entertainment. American Express has other payments options available for you to make your payments over a longer period of time. Some people may use the terms ‘charge cards’ and ‘credit cards’ interchangeably, but there are differences to the two.
The second type of major cards is the credit card we are familiar with. The main credit card companies are Visa and Master Cards, and they work together with banks to issue the credit cards to the consumer. Based on your income level, the banks will decide the spending limit you are entitled to. Different cards have different terms and conditions. If you only pay the minimum amount for your credit card payment, be prepared to fork out hefty sums that stemmed from your interest payments and new purchases. Due to the nature of unsecured loans, interest rates are considerably higher and over time, they may add up to a lot.
Business Credit Cards are the next type of cards. These cards may be useful to those for small businesses, but you do not need to own a business in order to receive such cards from the banks. These cards tend to have lower interest rates and higher spending limits. Cash flow issues can be easily resolved for small business with business credit cards as you can pay the bills over an extended period.
Finally, we have retail store cards from various major companies. Some are linked to shopping malls or other retail stores or we have fleet cards, for various fuel purchases as well. Since there is such a huge variety of retail store cards, the terms and conditions are definitely different. Only certain countries accept such cards.
Since various types of credit cards offer different conditions and payment options, you need to decide what cards such as charge cards, credit cards, business credit cards and retail store cards suit you best.
Tags: business credit card, charge card, credit card, fleet card
