Credit cards come with different features each matching the needs of different sectors. Some of the common types of credit cards include prepaid cards, secured credit cards, business cards and bonus points cards.
- Secured credit cards:
As the name suggests, these credit cards are backed by some amount placed by the card holder in his account as collateral in case he fails to pay. Your credit limit is defined by the amount of security you have given. The benefit of secured credit cards is they do not require you to have a good credit history. In fact, these cards are designed for people who do not have any credit history or they possess a poor credit score. But the limitation of these cards is that small credit limit is given to the card holder. Other features are also of basic nature. But it helps you to start developing a good credit history as you will spend less and, as a result, will be able to pay your bill in full each month. As these cards are for starters, you can apply for an upgraded credit card as you achieve a good credit score and your security is also returned when you switch from this card.
- Business credit cards:
Business credit cards are only issued for business use and it is very difficult to get them for personal purpose. As they are only offered to businesses, they require a very high credit scoring. But a good thing is that you can avail the benefits of a business credit card even if you own a small business or work as a free lancer.
- Prepaid cards:
Just like any other prepaid facility, prepaid credit cards require you to submit the amount in the account first. This card can also be issued to minors and amount is usually deposited by the parents or some other person. Interest charges are usually not applied on these cards but charge a monthly fee.
- Reward cards:
Reward cards give different offers including cash discounts, rebates and points. Cash discounts enable you to get discounts in cash form after making a purchase. While reward points allow you to get different gifts like suitcases, pens and other things. They also offer you free air tickets, free mileages, discounts on car rental, dinning and concierge services. But it is necessary to pay your bill in full each month otherwise you will not be able to get these rewards. Bonus points cards give you bonuses.
- Student credit cards:
These credit cards are offered to students and help them pay their tuition fees and other studies related expenses. These credit cards help the students to build a good credit history that will help them in future to avail other loaning facilities. The credit limit given to the students is comparatively low.
- Cobranded cards:
These cards are usually offered by affiliation of a retail brand and a card issuing company. They offer the users many discounts and cash rebates.