Pre-paid Debit Cards
These are actually not credit cards, but they are a good starting point for people who are not familiar with the intricate details that often make credit card management difficult or for people who might need to repair their damaged credit. You don’t need to be approved to get one of these cards. In fact, if you have an account with a large local or national bank, you probably already have one of this. That’s right the card that is currently attached to your checking account is exactly the same thing as a pre-paid debit card. You put money into an account and then you can access it using the card. Sometimes, though, these accounts have added benefits like reporting your activity to the credit bureaus, which will definitely help you in the long run.
Secured Credit Cards
If you really want a credit card so you can take advantage of the rewards programs they provide, but are still concerned about your credit score, then you might also want to consider a secured card. These are credit cards that also require you to make a deposit, but instead of accessing the money you deposit, you get access to a credit line that could be larger than your original deposit. You continue to treat the card like a credit card by making payments and charging as you need to and eventually you will rebuild your credit and be able to apply for other cards. The security deposit acts as the bank’s retainer just in case something happens and you are unable to make your payments. Like any other security deposit, you get it back when you close your account.
Low Interest Credit Cards
Everybody wants a credit card with low interest rates. Well, everyone would prefer a card with no interest rates at all, but those do not exist. Instead, you can take advantage of cards that offer low interest rates on one or all of the balances your card may carry. This is the trick to low interest cards; that you might get a rate as low as even 0% on balance transfers but the standard purchases rate and cash advance balances will probably also be higher too. Most of the time, this low rate is an introductory variable rate that will change over time. Introductory periods can last from 3 to 12 months depending on the bank.
No Annual Fee Credit Cards
Credit cards with no annual fee are also very desirable, for obvious reasons. These cards are great for emergencies because it costs you nothing to carry one. However, you often have to be careful because the interest rates might be higher to compensate for the lack of annual fee. This is not always the case, and sometimes the rates are within a decent range. Either way, though, carrying one of these cards for emergencies or in the event you find a big ticket item usually benefits you in the long run.
Balance Transfer Credit Cards
These cards can be very tricky to handle. Although the ploy is attractive, you need to have a plan of attack for how you will exactly use this card to your benefit. These cards are designed to consolidate your other cards’ balances so that all of your debt is in one place. They pull you in by promising rates as low as 0% for a term of 6 to 12 months. This can benefit you because you pay less every month for credit that already existed, which saves you money. However, if you don’t pay attention, your interest rate can shoot up after the introductory period ends. It is usually recommended that if you apply for one of these cards, you execute a plan that will pay off the entire transfer balance before the introductory period ends so you can truly take advantage of the otter.
Store Loyalty Credit Cards
Many retailers offer in-store credit cards that reward you for your loyal business. Typically, the more you shop with their store and use their credit card, the more benefits you reap. Sometimes this comes in the form of periodic discounts, while other times it might be cash rebates. Sometimes it is simply invitations to exclusive events or sales that only card holders have access to. The most common type of loyalty program is Frequent Flyer miles, but many companies operate similar programs without credit cards, like the punch card you might have for the place where you buy coffee.
