Kinds Of Credit Cards

Discuss and read about the kinds of credit cards. Credit cards, or plastic money as we say in common language, have changed dramatically our everyday transactions. One would not exaggerate, if he was to say that credits cards, which first appeared around the 1950s, completely revolutionized our paying system. A credit card allows its holder to buy things and services without carrying any actual money on his person. It basically assures the seller of a product that the card’s holder will in fact pay the amount spent. Or in other words, the bank that has issued the card guarantees that its client has the required credits. There are many kinds of credit cards, but in this post I will focus only on the 4 most common kinds of credit cards.

The first of those kinds of credit cards is the standard card, that pretty much every bank issues. Its owner need not deposit any money beforehand in order to show that one is actually good for his credit. Of course such a facilitation comes with a price, that price being a certain interest rate in the months to come. Nevertheless, the amount that someone can charge a standard credit card is fixed, and its holder cannot exceed it by spending money uncontrollably. Some times a credit card may allow its holder to make transactions at a varying rate, meaning that it could be a low interest rate for the first month and higher for the three months to follow. Within the standard kinds of credit cards falls also the balance transfer credit card, which provides the holder with the opportunity to transfer unpaid balances from one card to another. The reason to do so, would be to take advantage of the low interest rate a balance transfer credit card offers.

Charge cards comprise the second kind of credit cards. Their advantage is that the holder is not bound by any pre-fixed limit, but one is bound to repay his debt by the end of the month. In case he does not, he is subject to fees and other charge restrictions as applied by the bank-owner agreement.

The third kind of credit cards are premium cards, like Gold and Platinum. Such a card allows its holder to have some special benefits depending on the amount of credit spent. One might, for example, be given a discount in certain product stores, or be free plane tickets as a reward for reaching a certain amount of credits.

Last but not least, the prepaid card is what completes the list of the 4 most common kinds of credit cards. It is different from the rest, since it requires it holder to pay the full amount that he wishes to spent, before he makes any actual purchase. In most cases someone uses a charge card for security reasons or to make online purchases. The obvious advantage here is that one cannot spend more money than one has already deposited. So if a person was granted illegal access to someone else’s prepaid card, he could not charge the real holder with money he does not have.

In conclusion, credit cards have indeed changed the way we go about our business, and the various kinds of credit cards are designed to meet certain needs. In any case, however, one must be very both well-informed and cautious when using a credit card.