Credit Card Ratings and Types
If you have trouble getting a credit card with low interest rates, then you may have to opt for a credit card with a slightly higher interest rate. If you have poor credit or no credit, some banks will issue you a secured credit card, wherein a deposit in your saving account will serve as a guarantee against your credit limit.
Secured credit cards
Secured credit cards are often the most excellent alternative for people who have a blemished payment history or bankruptcy in their past. Make sure you select a credit card that pays you interest on your deposit. If, on the other hand, you have very good credit score and would like a higher limit, you can opt for a Gold or Platinum card at the same interest rates with little or no annual fee.
You may be receiving offers like a new credit card with a pre-approved Credit Limit. Before applying for it, make sure you read all the terms and conditions carefully because it could carry a very high rate of interest. Otherwise, by accepting the offer you may agree to transfer the entire balance of your other credit card to the new high interest account. You could end up paying extra interest without realizing what you have agreed to do. You should thoroughly examine the whole list of terms and conditions of the credit card before you sign so that you do not fall into this trap.
According to the Federal Truth in Lending Acts, credit card companies must provide certain pieces of information. This information is listed below, and by familiarizing yourself with it, these facts will help you evaluate Credit Cards with one another.
- Finance charges in dollars and as an annual percentage rate (APR)
- Credit issuer or company giving the credit limit.
- Size of the credit line
- Duration of the grace period if applicable, prior to payments which must be made
- Minimum fee required
- Annual fee, if applicable
- Fees for credit insurance (if any)
Types of Credit Cards
Mainly there are three types of Credit Cards:
- General credit cards, such as MasterCard, Visa, and Discover cards.
- Travel and entertainment cards such as Diners Club and American Express.
- Merchant cards which are usually used in one chain of stores.
Some credit cards are associated with certain organizations, such as universities, labor unions, professional groups, charitable groups, etc. These are called affinity cards, and they generally carry the MasterCard or Visa logo. The main difference is that the designated organization is paid a small percentage of all transactions.
Rewards credit cards give you some rewards like cash back and incentives when you use your credit card. Frequent flyer credit cards, for example, offer free air miles plus reward points each time you use these cards. However, they usually have a higher interest rate, so it might not be a good idea to choose these cards if you do not pay off your balance in full each month.
The right credit card for you is the one that is accepted everywhere you shop and charges you the least amount of money for the services you utilize. Nearly any U.S. business or organization that accepts MasterCard also takes Visa, and vice versa. To that end, it does not matter whether you choose a Visa card or a MasterCard, because you will be able to use both at the same places.