While all credit cards work on the same principle of allowing the consumer to spend on credit and billing him monthly, there are various features and credentials to a credit card that distinguish between different kinds. Different individual financial needs may be suited to different kinds of credit cards. Some of the common factors that differentiate credit cards are difference in interest-rate, reward points, credit limit, bonus features and finance charges. Listed below are some of the common different kinds of credit cards.
· Standard Credit Card – A standard credit card is typically the commonest kind of credit card that allows you to spend money on credit every month and being built for the expenditure at the end of the billing cycle. A standard credit card gives you the option to pay the balance in full on the due date or revolving the balance to the next month by making at least the minimum payment. These kinds of credit cards charged a certain amount of interest whenever you carry forward the balance to the next month.
· Premium Credit Cards – Premium credit cards are one step about a standard credit card in the sense that in addition to being like a standard credit card they offer the consumer various other bonus features like cash back, reward points, discounts etc. the premium credit cards are commonly Gold, Platinum Titanium category. Some premium credit cards also offer facilities like cash advances and payment in installments at a very low rate of interest.
· Charge Cards – Charge cards usually have no credit limit. The consumer is expected to play the balance in full at the end of the billing cycle every month. There are no Finance charges or minimum payment associated with a charge card as the payment is expected to be paid in full. Late payments can however result in the late fee, charge restrictions or card cancellation depending upon the policy of the card provider.
· Prepaid Credit Cards – Prepaid credit cards work in a similar fashion to the gift cards where you first load the amount of money on to the credit card before you can use it. Prepaid credit card is not a credit card in the technical sense. It is more like a savings account with first need to deposit the money before you can spend it. Getting a prepaid card usually involves a processing fee as well as a monthly transaction fee. In addition you may also be charged a fee for transactions such as speaking to a customer care representative, withdrawing money from an ATM, checking the car balance etc. once the balance on the card is overdue will once again need to be charged the card with more money.
· Secured Credit Card – A secured credit card is where you make a deposit as security against your credit card. Secured credit card works just like a normal credit card except for the fact that the deposit you have made can be used by the creditor to recover the payment on the credit card in case you default. The amount of deposit can be as much of double the amount of the credit limit on the credit card.
· Business Credit Cards – Business credit cards are cards issued for a business as an entity and not the individual. They are usually very high limit cards and involve and annual. Some will even charge a transaction fee. Business credit cards help in keeping the individual and the business entity separate in their transactions and therefore further help in maintaining individual credit reports for the business and the individual.