Credit cards used to be simple.  There was one rate, one feature and really only a handful of issuing companies.  Those days are long gone and now you need to know about the different types to determine which is right for your lifestyle.

Standard credit cards are the most common and are available in most financial institutions.  They are unsecured, which means you do not have to put down a security deposit.  There are several different interest rates handled by these cards.  There’s the balance transfer rate, which allows you to transfer a balance from another card to a lower rate on the credit card.  There is the regular interest rate for purchases, which usually starts at zero percent for a set amount of time.  And the cash advance rate, which is used when you use the card at an ATM to get cash.

There are credit cards with rewards programs. Finding a good credit card guide can help  Typically these have a slightly higher interest rate than standard credit cards but only by about a percentage point or two.  These cards allow you to earn incentives by using the card.  Some credit cards will offer a certain percentage of your purchases and give you cash back for it.  Some cards use reward points, usually at one point per dollar spent, and these points can then be redeemed for other prizes.  Other cards earn rewards that can specifically be redeemed for discounts on airline tickets or hotel reservations.

Bad credit or credit repair cards are a good solution for those who cannot qualify for a standard credit card.  Most often the interest rate is a few percentage points higher than any other card.  These come in two types: secured credit cards and prepaid credit cards.  Secured credit cards require collateral in order to be used.  Typically this means putting a security deposit on the card as proof that you can pay the money back, this is usually an amount equal or greater to the credit limit.  Prepaid credit cards are technically not credit cards but they are accepted and used like them.  The biggest advantage of them is the lack of finance charges and the lack of any debt.  With these cards you determine your own credit line by paying for any purchases beforehand.

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