Types of Credit Cards – Pros, Cons and Comparison

Business credit cards who are they for: Entrepreneurs and Executives Interest rates:13.24 – 22.99% advantages– Expect low introductory fares, cash back programs, airline rewards, and special bonuses that may include: separate personal and business expenses, additional cards connected to the same account for trusted employees, expense management reports, and increased credit limits . These are easier to qualify for than a personal loan or line of credit from the bank. cons: They can be an expensive way to finance purchases, thanks to late fees and interest rates. There is less purchase protection extended to commercial cards in case someone uses the card fraudulently or if you need to return products you are not satisfied with.

personal credit cards who are they for: Responsible Borrowers Interest rates: 9.99 – 20.99% advantages: Standard low-interest cards are good because you can start to build a positive credit portfolio when you use your card regularly but responsibly, paying off the balance in full each month. Many of these cards come with amazing rewards on retail purchases, cruises, airline tickets, gas, and other perks. cons: You may be offered a “low introductory APR” or “free balance transfers.” Be careful about this when you make your decision, as that “low APR” will soon increase to a higher rate, which will then become the standard interest you’ll pay indefinitely. Also, it’s only good to transfer a balance if you can pay it off in full before your “free transfer” becomes eligible for higher interest. Please read all terms, fees and conditions before signing!

student credit cards who are they for: University students Interest rates: 12.99 – 22% advantages: Many college students find the need for credit to cover their purchases of books, groceries, gas money and living expenses. However, without any prior credit, many of the major credit companies do not want to bet on the possibility of students defaulting on the loan. It’s easy to get a card specially designed for students. cons: These cards do not have as many rewards, features and benefits as other cards. They also typically have higher interest rates and lower credit limits. Therefore, many people switch to a different card once they build up their credit.

Secured credit cards who are they for: People with bad or faulty credit Interest rates: 7.9 – 19.99% advantages: If you have bad credit, you’ll never be able to improve it unless you’re brave enough to dabble in credit again. The best way to increase your score and get back on track financially is to show that you are reformed, trustworthy, and responsible with regard to loans and payments. You might be surprised to see such a low interest rate, which is one of the great advantages of this card, but you may still pay a price if you’re not careful. cons: Secured cards require some form of collateral for approval. This could be a car, a boat, a portfolio of stocks, jewelry, or anything else with monetary value. That means if you don’t pay your debts reasonably, you could lose your most prized possessions. Another drawback is that your line of credit can be as low as $250 initially. While you can increase it later, you may be disappointed to learn that you can’t even buy certain plane tickets with your new card. There may also be additional fees involved for cardholders.

prepaid credit cards who are they for: People with bad credit Interest rates: 0% advantages: Think of these more like debit cards. There are no finance charges / interest rates to pay. You can avoid going into debt because all your purchases have already been paid for and you can’t overdraw your account. For many, this is a good step in learning to better manage finances. However, you can use it like a card if you want to buy items online or pay for plane tickets. cons: Other fees may apply, such as monthly, application, overlimit, ATM, or reload fees. You can’t borrow money that isn’t there, which some people do for larger purchases.