Credit Card Basics
Before you apply for a credit card it is always a good idea to know what types of cards are available and which one will work best for your specific needs. Most banks and financial institutions offer a wide variety of credit cards so do take time to check the market before going ahead with your application.
Here is a guide detailing the most common types of credit cards available.
Standard credit cards - Standard credit cards are the most typical type of credit cards and are unsecured credit cards readily available from most banks and financial groups. These types of cards vary in how the annual percentage rate (APR) is offered or calculated.
0% balance transfer - this type of card offers customers a 0% interest on balance transfers generally up to a period of 12 months after which the normal APR applies. A fee ranging from 2-3% is however charged for the initial transfer. They allow people to consolidate their credit card debts onto one single card saving money on interest charges.
0% purchases - give customers a little help with their cash flow by offering introductory rates that are interest-free for any new purchases. This introductory rate is usually for a specified term only, ranging anywhere between 3-12 months, after which the standard rate applies.
Low interest credit cards - feature either a low fixed rate APR or a low introductory APR, this may be set for a limited period only.
Credit cards with Rewards Programs - these cards reward the cardholder with incentives, rebates and even cash back for any purchases they make on their card. They are similar to cash back cards in the sense that you can accumulate points towards a reward structure. Many high street stores now offer their own in-house store cards to regular customers with similar point reward schemes.
Cash back credit cards - give you cash rewards for making purchases with the card. Obviously the more the card is used the more cash rewards you benefit from. In general the cash back rate stands at 1-2% of your total purchases. However these cards are a good option only for those who regularly pay off their balances in full each month.
Use www.moneyoutlet.co.uk to help you search and compare the cheapest deals in the UK credit card market. Find the best deals available all by a simple click of a button.
Published on September 29, 2007
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