The credit card market is, to say the least, a wide open market with a multitude of choices available to the consumer. If you are a first time card shopper then you will probably find the choices overwhelming at first, and even the more experienced suffer a similar fate. With the myriad of choices that face you it is important that you make the correct decision because it can be the difference between paying reasonable rates on the money you borrow and paying a lot more than you should.
What Are Cash Back Credit Cards?
As the name suggests, cash back credit cards reward you with cash back on purchases and cash withdrawals you make using your credit card. Some cards offer certain levels of cash back on certain items and actions. For instance, you may receive 3% against gasoline purchases and 2% against all other purchases. There are many different variants on the cash back theme. You may, for instance, receive cash back against purchases of airline tickets or even baby products.
Cash Back Credit Card Ideal Users.
If you use your credit card regularly then cash back credit cards could be the perfect option for you. You should consider your spending pattern carefully and determine whether you buy any particular item or if you use your card to buy different things on a regular basis.
The Pick Of The Cash Back Credit Cards.
The Chase Cash Plus Visa Card rewards spenders with 5% cash back on groceries, drug store purchases and gasoline. You also receive 1% on all other purchases made with your credit card.
What Are Reward Cards?
In principle reward cards work in the same way as a cash back card except you don’t receive cash back for purchases you make and instead you usually receive loyalty points. They may be given one of any of different guises but the principle is always the same. For each dollar you spend you receive a certain number of points. These points are then redeemable against certain products or for use in certain shops. Some cards may not allow the withdrawal of your reward points until you reach a certain level, but this level is usually easily attainable.
Reward Card Ideal Users.
People who specifically use their credit cards on certain types of items may find it beneficial to use reward cards although in many cases it is preferable to use cash back credit cards so that you aren’t limited to how you use the money, or gasoline or air miles cards for extra benefits.
The Pick Of The Reward Cards.
The Discover Platinum Gas Card is quite unique. It is a combination of a cash back card and a reward card. 5% on gasoline purchases and 1% on all other purchases means that the card can be beaten for rates; however, if you take gift certificates for the brand name stores on their list then you will receive double the amount. If you regularly or solely use your card for purchasing gasoline this essentially means that you are offered 10% cash back that can be spent in up to 40 stores.
What Are Low Interest Credit Cards?
You will have undoubtedly seen the credit cards that offer a 0% interest on balance transfers or on cash purchases for a number of months after you receive your card. A 0% balance transfer means you can transfer the balance of one card to another and not have to repay a single cent until the offer expires. Alternatively, 0% interest for cash purchases means you won’t have to pay any interest when you use your card to make a purchase.
Low Interest Card Ideal Users.
The ideal user for a low interest card will depend on the type of 0% on offer. 0% on cash purchases is perfect for big spenders who repay the minimum balance or only a small amount of the balance on a monthly basis. Conversely, a 0% balance transfer card is ideal if you already have a credit card with a reasonable amount of debt on. You will get a good amount of time to repay the outstanding balance before you are charged interest.
The Pick Of The Low Interest Cards.
The Citi Platinum Select Card not only offers a 0% balance transfer for 12 months and 0% interest on cash purchases for 12 months but it also has one of the lowest annual APRs around once these deals expire. Because it’s a Platinum card, your credit rating will need to be very good but if you do have an unblemished credit history it is a deal well worth considering.
What Are Airline Credit Cards?
In a way Airline Credit Cards fall under the same bracket as reward program cards. With many cards you are rewarded for any purchases you make at a rate of one mile for between $1 and $2 spent. These miles are then redeemable against flights and in some cases even car rental, accommodation and travel expenses. Be aware that a majority of these cards charge an annual fee and their will normally be a minimum limit you must attain before you can use the miles you have earned as well as a limit on the number of miles you can earn in a given year.
Airline Card Ideal Users.
An airline card is perfect for many people that fly. Even if you only go on one family vacation a year then the Airline card could prove beneficial when it comes time to book your vacation. If you are a regular flyer then these cards will undoubtedly help out on a fairly regular basis.
The Pick Of The Airline Credit Cards.
The Miles Card from Discover seems to offer just about the whole package. A 0% introductory interest rate for 12 months is certainly a deal sweetener that is worth taking into consideration and the APR after this date is an impressively low 9.99% (although please check this, because the Interest rates for credit cards can change very quickly indeed). Discover have just done away with the annual fees on this card, which is also a bonus. When you make your first purchase you will receive 5,000 bonus air miles and you will receive 1 mile for every $1 that you spend.
Determining The Type Of Credit Card You Should Choose.
There are other types of credit cards on the market although these are the major types of personal credit card that you will probably want to consider. It really is important that you look at how you spend money. Consider the things you purchase most often and, if you already have a credit card, which items you pay for using your card. If you see an immediate pattern that indicates you would benefit from one particular card type then try to find the card that best suits your specific needs.
A Final Word On Credit Card Choice And Introductory Offers.
While a 0% introductory interest rate will seem immediately appealing you need to think about the type of credit card shopper you are. If you shop around for a new card every 12 months then the introductory offer will be perfect, although you should check the terms and conditions to make sure that you won’t get penalized if you cancel the card in a certain amount of time. However, if you are more likely to stick with a card for a longer period then you must consider the APR once the introductory offer expires to ensure you don’t end up paying high interest rates 12 months down the line. By considering all of the options you should be able to make an informed decision on the best type of card for you and, subsequently, the best credit card for you.