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Credit Cards

by Chris Green
July 02, 2009
There are different types of credit cards. All of them have one thing in common though: they will lead you into debt if you are not careful.

Popularly known as plastic, there are four different types of credit cards.

Types of Credit Cards


This is the common type and is usually issued by your bank. Each one will have either a Visa or Mastercard logo stamped somewhere on the card.


This type of card is often given to company employees to cover business expenses. This card type has no credit and the charges must be paid in full at the end of the month.


A Store credit card is issued by a certain store but may be used to purchase items outside of the store that issued the said card. If you use the card to purchase items from the issuing store, loyalty points or other special offers may be applied. A disadvantage of a store issued card is the fact that these often carry higher interest rates than traditional credit cards.


An Affinity type of credit card is offered by an organization like a charity or club. Many assume that they are dealing directly with the issuing charity or club. This is not correct. You are actually dealing with a credit issuer that then gives a percentage to the charity. Overall, this type of credit card is not recommended.

The Smart Card is a new type but is still in the testing stage. Instead of the standard magnetic strip, a chip is embedded in the card. The chip can contain information for several credit cards.

Smart cards can offer you better protection against fraud. There is also no need to swipe the card as the chip will simply beam the information to a receiver at the cashierâ€TMs counter.

However, as previously mentioned, the Smart card is still in the experimental stage.

Advantages of a Credit Card


Well, not totally free. Credit cards are free to use if you repay the charges you make in full. No interest will be charged. However, interest will be charged if you are unable to pay the total amount due in full.

An annual fee may be applicable to certain cards while other cards do not charge an annual fee.

Protect your Purchase

Normally, goods you purchase will be insured a hundred percent within a certain timeframe. Insurance will also protect you and your purchased item in case of loss or theft.

Know your options. Some companies offer purchase protection, others do not.

Protect your Card

If you lose your credit card through theft or other circumstances, you can simply call your provider to cancel the card. You then ask for a new one to be issued.

Rebuild your Credit

If your credit rating has taken a hit recently, you can use a credit card to slowly rebuild your history. Your credit rating will affect your loan applications, insurance premiums and other financial options and opportunities. A good credit rating will give you lower interest rates on your loans and other credit related transactions.

These are but a few of the advantages that a credit card can offer you. There are more advantages than those already mentioned. Once you start using your credit card, you will quickly discover these other advantages.

While there are disadvantages to a credit card, most of these are related to how well you handle your personal finances. Keep your spending in check so you can maximize all the benefits that a credit card can offer. If you control your spending impulses, you will experience all the benefits that a credit card can give you without experiencing any of the disadvantages that debt can bring about.

Remember, spend responsibly.

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Credit Cards




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