Credit Card Types

Feb 17 2012

Credit Card Types

Credit cards are a part of most people’s financial lives and understanding how they work can provide you with several benefits. When it comes to understanding credit cards, you have many different types of cards to examine. With so many different types of credit cards, it is possible to find the right credit card for you, regardless of your situation.

Rewards Credit Cards

One type of credit card put an emphasis on rewards programs. With a rewards credit card, you can use the points that you earn to make purchases on items that you need to buy anyway. This can offset some of the costs of doing business with the credit card company and give you an added bonus for making purchases with your card. Some credit card rewards programs give you one point per dollar that you spend on the card while others give you two points per dollar spent. When examining this type of credit card, it is important to see exactly what you can get for rewards points.

Cash Back Cards

Another type of credit card available in the market is the cash back card. With this type of credit card, you get a specific percentage of money back on each transaction that you have with the card. For example, you may get one percent back on any purchase that you make. These cards also often give you extra cash back on purchases within certain categories. For example, if you buy gas for your car on your credit card, you may get five percent back instead of the normal one percent.

Balance Transfer Cards

Balance transfer cards are designed to encourage customers to transfer balances from other credit cards onto them. This type of card typically offers a zero percent interest rate on balance transfers for a certain amount of time. For example, you may get 18 months of no interest once you transfer the balance over to the new credit card. This can be beneficial if you already have a large balance on another credit card and you want to get some time to pay it down without accruing interest.

Branded Credit Cards

Some credit cards are branded to a specific company. For example, a Disney credit credit is associated with the Disney brand and gives you specific rewards and no interest financing on Disney vacations. You may also find branded credit cards that are associated with specific airlines or entertainment companies.

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