A 4- Point Guide in Choosing the Appropriate Credit Card

Tuesday, June 2, 2015, 6:00 AM | Leave Comment

Gold, silver, platinum, prestige, travel, cash back; you have to give it to credit card issuers because the terms they use to label their products are ingenious. However, they have also managed to befuddle their customers.

A study by the National Foundation for Credit Counseling (NFCC) in 2012 showed that only a meager 26% of customers fully understand what their cards offer.

Considering the Federal Reserve reckons credit card debt today stands at $15, 609, it is imperative as a household owner to take a step back and understand what you need to know when choosing one of these plastics.

So, which card suits your lifestyle? Take a look:

  1. Credit Repair Cards

    Truth be told, the situation in the economy is still frightening. As such, you might find that your debt accruing from your previous cards is just too much to handle.

    Formulation of these bad credit cards is done with you in mind; they are aimed at helping you repair your credit card store while at the same time enabling you to transact day-to-day financial needs.

    Options include secured credit cards or prepaid cards but both come with low-credit lines to avoid plunging you into more debt.

  2. Standard Cards

    If your financial situation is stable you can opt for the myriad standard cards available from different companies in the U.S. These are unsecured and you do not require any security deposits.

    In today’s market, you can opt for a balance transfer card that allows you to enjoy lower rates on another card.

    You can also buy a low interest card directly which allows you to enjoy lower rates before such an introductory offer ends.

  3. Reward Program Cards

    They are the hottest item on the financial market with almost all brands offering rewards when you buy goods and services from them.

    Points keep accumulating for every dollar you spend and after a year or more, you will redeem rewards based on accumulated points.

    While some cards offer general rewards, others offer cash back on your points to encourage you to use them even more.

    Other credit card companies have co-branded their cards with hotels and retail chains to enable you to earn points and rewards from such facilities.

    There is also a growing trend of cards offering gas rewards, from either a specific outlet or a brand-specific outlet.

  4. Business Credit Cards

    This is another unique product in the marketing targeting business owners. While the cards have the same benefits and features as traditional cards, they come with executive perks that are targeted at the business world only.

    They also come with higher credit limits making them even more alluring for the business executive.

Well, there are many other specialties including student cards, airline frequent flier cards and many others. The question you should ask before anything else is your ability to pay for the interest given.

What’s more, consider offers and benefits such as interest-free periods, transfer fees, reward points on ordinary cards, minimum repayments and any other feature that helps you save and pay less.

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