We humans use a lot of tools. It is something that sets us apart from most creatures. We started with a stick, or a rock, and from there we developed hammers, swords, cars, rockets, phones, computers. All of these were created to help make our lives easier. One of the most popular tools we use today is a little piece of plastic called a credit card.
Credit cards aren’t for everyone. In fact, you can’t get a credit card if you don’t qualify for one. These little plastic rectangles may look like simple tools, but they are actually very complex. That’s why it’s so important for those looking to get one to first find out all they can about credit cards. Because a credit card can be a useful tool, in the right hands, but it can also ruin your finances if you’re not careful.
These days, credit card products come in a wide assortment. To help you learn more about them, we’ve put together a list of the most common types currently out there.
Standard Credit Cards
Standard credit cards are general purpose cards with revolving credit lines. Each and every person over the age of 18 can get one, provided they meet the financial institution’s minimum credit criteria. Standard credit cards require no deposits. The credit card issuer sets the credit limit for each card.
Rewards Cards
A lot of people get credit cards just for the rewards they come with. Many credit cards feature these rewards programs. They come with some complex rules, but they can help you get cheaper airline tickets, car rentals, free hotel stays or other merchandise. The key to using such a credit card is making sure that the annual fees don’t end up eliminating all the benefits.
Here are some different types of rewards credit cards:
Points cards
With these cards, you get reward points every time you use your card. You can use those points to get free merchandise, or to pay hotel stays.
Cash back
Cash back credit cards are exactly what the name says. They can actually give some of the money you spend back to you. When you collect a minimum amount of cash or credit you can ask to receive it through a check. Or you can use the money to buy merchandise at designated stores.
There are different types of cash back cards as well. Some offer you a flat amount of money, based on all that you purchase, no matter how much you spend. Others have different levels of rewards, depending on how much you spend.
Frequent flier miles
These are probably some of the best known rewards credit cards. When you use them, you earn airline miles. And you can use these miles when you purchase future airline tickets. Additionally, some programs partner with restaurants, hotels or even car rental services.
Premium credit cards
If you have excellent credit, you can get one of these cards. But, besides the excellent credit, you will also need a huge salary. Because premium credit cards come with credit limits of at least $10,000, and the interest and annual fees tend to be high. However, each card comes with its own personal assistant or concierge service, as well as access to exclusive airline lounges and auto assistance.
Secured credit cards
These are the best credit cards if you want to build credit. You start by opening an account and depositing a few hundred to a few thousand dollars. This is your credit line. You can use them to make small purchases that you can easily repay. This way, you can reestablish your credit or even improve it.
