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Thursday, March 28 2024
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The four major types of credit cards

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Credit Card inner

The basic step in applying for a credit card is to choose the type of card based on the needs of the individual. So, here is the list of different types of credit cards that cater to different individual needs

Plain Vanilla Credit Cards
Standard credit cards are also known as plain vanilla credit cards. They can be used only for meeting the basic needs, but they do not help in earning rewards. They allow you to take credit to a certain limit. There is a small finance charge applied on the outstanding bill of the standard credit card.

Balance Transfer Cards
With this type of credit cards, one can transfer their balance to another person’s credit card. The balance transfer is a very good option to avoid higher interest rate balance on the current credit card.
These interest rates vary with different banks. Some cards usually qualify for 0 percent interest rate on a minimum of 2-3 transactions a month. The higher the promotional period and lower the promotional rate, the more attractive is the credit card.

Rewards Credit Card
As the name suggests, the rewards credit card provides a ‘reward’ for the transactions done. The rewards credit cards are basically classified into three types: travel, points, and cashback. Few prefer cashback rewards cards, while few prefer the points being redeemed at merchandise.

Student Credit Cards
These types of credit cards are specifically designed for students keeping in mind that the students do not have any credit history. This type of credit card gets easily approved compared to other credit cards. One of the best advantages of a student credit card is that the interest rate is low compared to premium credit cards.

Secured Cards
This type of credit card is issued to people who either have a poor or no credit history. To get a secured credit card, one must deposit a certain amount in the bank. The credit limit is generally equal to the amount deposited on the card. However, one has to pay monthly payments on your secured credit card.

Business Credit Cards
Business credit cards are specially designed for the business owners to make a separate transaction list for personal and business purposes. There are standard as well as charged business credit cards available. Even for the business credit card approval, the individual must have a good credit score as he is still held accountable for the credit balance.

These are some of the major types of credit cards used in day to day transactional activities. Choose the one that suits your needs and apply for it by providing the necessary documents at your bank.

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Anil Rajput

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