Friday, June 15, 2018

All You Need To Know About Credit Cards.

By Adele Lehrain

A credit card simply put is a card given by a financial institution to a bank customer (also known as borrower) to make purchases by borrowing funds. The funds borrowed can be employed to a plethora of uses such as the payment of goods and services. The premise upon which a credit card is issued is that the cardholder has the liquidity to pay back to the bank not only the original sum borrowed, but also any other additional charges that may be incurred on the use of the card.

This is usually based on the premise that the consumers would have the means to honor their payment obligations on the credit extended to them in the not distant future. In light of this the credit card was invented to enable bank customers meet their liquidity needs

There are many types of credit cards, and often times a customer is confused as to which would best suit his needs. There are several factors one must take into consideration before choosing a credit card, of which the most notable is the type of credit the customer intends to have. In the following paragraphs, we will be examining the various types of credit cards their uses.

1. Standard Credit Card. This is the most basic credit card and has as its major advantage, ease of usage. It is important for those who do not desire to have any rewards. It works by providing you with a revolving balance, and also a certain balance. Once that balance is used up, your credit is withdrawn until payment is made.

1. Standard Credit Card. With this credit card,you get no additional rewards. The major perk of using the standard credit card is that it is relatively easy to understand, so if you are not big on high rewards and love simplicity. It works by providing you with a revolving balance which is up to a certain limit.

Cashback cards are the most popular type of reward cards though people prefer to have points awarded to them which can be redeemed at a further date.

4. Student Credit Card. College students are not left out when it comes to credit cards as there are special credit cards formulated for university students. Student credit cards are granted on the premise that college students have little or no credit ratings. It would work more for students who are first time applicants of credit cards. Student credit cards come with a whole lot of added benefits such as low interest rates, but to be entitled for a student credit card, a student should have obtained admission to study a four year course at a recognized university.

4. Co-branded Credit Cards. These are special cards issued jointly by a financial institution and a retail merchant. It is used as a means to encourage consumer spending at the partner retailer's outlets. The major benefit of having a co-branded credit card is that it offers rewards to loyal customers at selected intervals.

5. Student Credit Card. This is a special type of credit card that is offered to college students. It is issued bearing in mind that young people may not have credit history, and as such they may have very little difficulty in getting a credit card issued to them. In order to be eligible for a student credit card, an applicant must show that he is enrolled in a University for a four year course.

6. Subprime Credit Cards. This form of credit card is offered to applicants with bad credit history, whose interest rates are also high. The fact that it is approved quickly shouldn't belie the fact that the terms surrounding this type of credit card is often vague.

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