If you’re on the lookout for a new credit card, it may be a good time to familiarize yourself with the different types of credit cards that are available. From low interest cards to no interest cards, cards with airline mile rewards, cards that reward you a percentage of your purchases back, cards that reward you a percentage of certain purchases back, guaranteed approval cards, prepaid cards, student credit cards… the list goes on, and it can feel overwhelming when trying to decide what is best for you.
Low interest credit cards are a good choice for most people (who wants the high interest option if you have a low interest one?). Low interest credit cards generally have a rate below 15%. That may sound high still, but consider that some cards go well above 20%, and 15% is a huge break. Some low interest cards offer a 0% interest rate for new card holders that lasts for a short period of time – their way to entice you over to their card. Don’t let that convince you to go nuts with purchasing on the card! The rate will go up to normal, and if you haven’t paid off your 0% interest purchases, they will start accruing interest at the higher rate. Watch for variable interest rates, as this can make your payments change monthly.
If you work for a company that has the option, or you own your own business, a business credit card may be best for your business purchases. Although they may require you to have a very good credit score, they come with benefits such as low interest rates, and they make it easier to track your business expenses. If you have your own business and have employees, you can get additional cards for them to make purchases for the company, and monitoring their spending is as easy as monitoring your own.
When opening a new line of credit, make sure to do your research on the type of card, and read the fine print when it comes to the terms and conditions. Good luck!