Types Of Credit Cards

Are there any differences in various credit cards? Before you compare the various credit cards offered by various merchants and banks, it is good to know a few main types of credit cards. It is then easier to select a suitable credit card.

Those who need to spend on entertainment for clients or travel on short notices may require more funds and it is difficult if you have a fixed spending limit. Charge cards will be useful to you as they do not have credit limits for your spending. They offer short term loans which have no penalties if you pay off in full every month. Diners Cards and American Express offer such cards for travel and entertainment. American Express has other payments options available for you to make your payments over some time. Due to the different schemes available, some people may use the terms interchangeably, but these two are basically different.

The second type of major cards is the credit card we are familiar with. The main credit card companies are Visa and Master Cards, and they work together with banks to issue the credit cards to the consumer. The banks will determine the spending limit on your cards based on your income level. Different terms and conditions apply to different types of cards. You can choose to pay in full each month, or pay the minimum amount stated and incur interest rates on your existing payments on top of new payments. Due to the nature of unsecured loans, interest rates are considerably higher and over time, they may add up to a lot.

Business Credit Cards are another type of cards. These cards may be useful to those for small businesses, but you do not need to own a business in order to receive such cards from the banks. These cards tend to have lower interest rates and higher spending limits. These will help small businesses with cash flow problems as payments could be extended.

Last but not least, various major companies offer retail store cards. Such cards are issued by shopping malls and other retail stores, or we have fleet cards, for various fuel purchases as well. Due to the numerous retail store cards, the terms and conditions are quite different. These cards are usually only accepted in specific countries.

Since different types of credit cards offer different conditions and payment options, you can choose what cards such as charge cards, credit cards, business credit cards and retail store cards are suitable for you.