Credit Card Types

Are all credit cards created equal? Before you compare the various credit cards offered by various merchants and banks, you need to know a few main types of credit cards. This will help you in deciding which credit card suits you better.

If you need to entertain your guests or make business trips frequently, the amount you spend may differ from one month to another. Without spending limits, charge cards will be suitable for those who need to spend large amounts on entertaining their clients. If you make the payments in full every month, you do not have to pay any charges on the short term loans. American Express and Diners Cards are such travel and entertainment cards. For those who require extension for payments of bills, American Express offers other payment options. Some people may use the terms 'charge cards' and 'credit cards' interchangeably, but there are differences to the two.

Many of us should be quite with credit cards, the second type of major cards available in the market. The main credit card companies are Visa and Master Cards, and they work together with banks to issue the credit cards to you. The banks will determine the spending limit on your cards based on your income level. Different cards have different terms and conditions. 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. For those with small businesess, they may apply for business credit cards, even though these cards are not exclusive to them. Such cards may have higher spending limits while charging lower interest rates. 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. Some are linked to shopping malls or 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 various types of credit cards offer different conditions and payment options, you need to decide what cards such as charge cards, credit cards, business credit cards and retail store cards suit you best.