What are the various types of Credit Cards? Read on…

In ancient times there was no concept of money. And what existed in its place was exchange of material possessions, commonly called as the barter system. Gradually different forms of exchange were introduced including salt, shells, animals, coins and notes. Slowly, with increasing wealth, it was deemed necessary to contract the carriers of money. Thus the concept of banks was introduced, and instruments like drafts and cheque’s started to be used. With modern technology, and innovation in techniques, nowadays money can be carried more compactly. This new method is called plastic money, which can carry millions sitting snugly in your wallet.

Credit cards are small plastic instruments which can make transactions with a simple swipe on the machine. Sounds fascinating? There’s more.

There are different types of credit cards which you should know about before getting the one best suiting your requirements.

The different types of credit cards are:

Standard Credit Cards

This is the most common type of credit card. It allows a revolving balance up to a certain credit limit. Credit is used up at purchase and made available again once payment is made. A finance charge is applied to outstanding balances at the end of each month. Credit cards also offer minimum payment facilities that must be paid by a certain due date to avoid late-payment penalties.

Premium Credit Cards

These cards are custom designed for the benefit of customers who seek value added service. For example Gold and Platinum cards which offer facilities like cash back, reward points and travel upgrades to customers according to their usage. Premium cards can have higher fees and usually have minimum income and credit score requirements.

Limited Purpose Cards

Limited purpose credit cards can be used only at specific locations. They have minimum payment and finance charges. Store credit cards and gas credit cards are examples of limited purpose credit cards.

Secured Credit Cards

Secured credit cards are designed for people without a credit history or those with blemished credit. Secured cards require a security deposit on the card, where in the credit limit is equal to the amount of the deposit made. Secured credit cards have revolving balances depending on the purchases and payments made.

Take your pick and enjoy your credit cards responsibly.

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