There are several different types of credit cards in use across the globe. These include cards that serve those with poor credit, no credit, business cards, and those seeking some rewards. In this article, we’ll focus on the major types of credit cards available today.
Secured Credit Cards
In the realm of credit cards, you’ll notice that there are two broad categories: secured and unsecured. However, most of the credit cards that are vigorously advertised tend to be unsecured, meaning that you don’t have to make a refundable deposit to use them. Conversely, secured credit cards require a potential holder to make a security deposit to open an account with the credit card company.
In most cases, secured credit cards have the word “secured” attached to the name. After making a deposit, your account will be evaluated after some duration to assess your credit management.
Unsecured Credit Cards
These are the cards that most people categorize as traditional cards since one doesn’t require any deposit to open an account with the card-issuing company. In this category, you’ll find several types of cards that are generally unsecured, such as:
Student Credit Cards
The student credit card is for college students who have no or limited credit. Typically, the cards come with no or a low annual fee coupled with an educational component in the form of rewards. The credit limit for these cards is often low due to credit history and low incomes of the beneficiaries.
Business Credit Cards
These cards fall under two categories: small business credit cards and corporate credit cards. The qualification for either of the two cards varies with the card issuer. The small business credit card specifically targets young businesses and operates as a personal credit card. It serves owners who lack sufficient credit history and, therefore, uses their names to get the card.
Companies with adequate credit ratings meet the requirements of getting a corporate credit card.
Reward Credit Cards
Reward credit cards offer users valuable rewards. These cards seek to build loyalty by rewarding cardholders whenever they use their cards. The cards include cashback credit cards, travel reward credit cards, and branded credit cards.
Subprime Credit Cards
These cards are intended to serve borrowers with poor credit scores. Generally, the cards come with costly fees and high-interest rates.
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