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Types of Credit Cards

  • December 26, 2016
  • By: Greenpath Financial Wellness

Did you know that there are different credit card types? Here’s a guide to a few of them:

General Credit Cards

  • General-purpose cards are issued by banks and other lenders. You get a bill once a month. If you don’t pay off the whole balance, you are charged interest.
  • Premium cards offer extra perks, like cash back or airline miles. They may have a higher spending limit and lower rates than other cards. But they often require a higher credit score and higher income.
  • Secured cards require a deposit. The spending limit is based on the deposit amount. They can be help you start or improve a credit record.

Specialty Cards

  • Store credit cards can be used only in a certain store or group of stores. In general, they have higher interest rates.
  • Affinity credit cards give a percentage to a charity or nonprofit. These cards usually have fees.

Other Types of Credit Cards

  • Charge cards are the same as credit cards, except they must be paid off every month. They sometimes have a yearly fee.
  • Debit cards are tied to your bank account. Money comes out of your account as soon as you buy something.