The Types of Credit Cards

When searching for financial solutions, it is important to understand that there are several different types of credit cards; each offers unique benefits to the card holder. The type of credit card you choose will depend on your spending practices, rewards desires and financial stability.

Cash Back Credit Cards

One of the most common types of credit cards are "cash back" credit cards. When you use them, you can earn cash back from the card issuer in the form of actual cash credits to your account, or gift certificates. For example, the Capital One No Hassle Cash Back Rewards credit cards are some of the most popular of these types of credit cards. When you use it, you earn 1 percent cash back on all of your purchases, regardless of where you shop.

Low Interest Credit Cards

The best types of credit cards for people who do not pay their full balances every month are lower-interest credit cards. These include low APRs (interest rates) so you pay less on your balance. A great example of these types of credit cards is the Citi Platinum Select MasterCard. It offers a 0 percent interest rate for the first 12 months, which means you won't pay any interest on your balance as long as you make your minimum payments.

Balance Transfer Credit Cards

If you are looking at credit cards that will be ideal for moving the balance of one card onto another, look specifically at balance transfer credit cards. These offer low interest rates on balance transfers for a specific period of time, allowing you to consolidate your debt with one low APR. The Discover More card, for example, has an introductory APR of 0 percent for six months on new purchases, but for 12 months on balance transfers. This allows you to bring over your existing balances and pay them off more quickly.

Prepaid Credit Cards

If you have made mistakes in the past with other types of credit cards, prepaid credit might be your best solution. These credit cards, such as the AccountNow Prepaid Visa, allow you to prepay a certain amount (e.g. $500) to set your credit limit. There is no risk to the card issuer because you've already paid your bill, and you can begin to restore your credit.

Rewards Credit Cards

One of the best types of credit cards are the rewards cards, which allow you to earn points toward rewards with each purchase you make. You might get a gift certificate, free hotel stays, merchandise and other rewards.

Airline Credit Cards

Some types of credit cards have specific rewards, and the airline miles credit cards fall into this category. When you use these credit cards, you earn free airline miles that can then be redeemed for free or discount flights. These are best for consumers who travel frequently, either for business or for pleasure.

Business Credit Cards

Do you own a business? Did you know that there are types of credit cards made specifically for business owners? This type of financial solution allows you to build not only your personal credit, but also the credit of your business. You can use these credit cards to purchase equipment, meals, merchandise and anything else you might need for your commercial venture.

Instant Approval Credit Cards

Sometimes, you need financial assistance right away. Instant approval is a type of credit card that gives you an answer immediately upon applying online. You'll need fairly good credit, but it is an excellent way to get your hands on the credit you need now.

Steve Thompson

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