Are all the credit cards the same? Before you compare the various credit cards offered by different merchants and banks, you need to know a few main types of credit cards. This will assist you in determining which credit card suits you better.
Those who need to entertain clients or travel on short notices may require more funds and it is difficult if you have a fixed spending limit. Without spending limits, charge cards will be suitable for those who need to spend a lot of money on entertaining their clients. They offer short term loans which have no penalties if you pay off the entire amount every month. American Express and Diners Cards are such travel and entertainment cards. American Express has other payments options available for you to make your payments over a longer period of time. There are many schemes available, so a charge card user may have overlapping benefits that credit card users have, so some people may think the two different types of cards are the same.
Many of us should be quite with credit cards, the second type of major cards available in the market. Visa and Master Card work with banks to issue credit cards to the consumer. Based on your income level, the banks will decide the spending limit you are entitled to. Different terms and conditions apply to different types of cards. It is up to you to decide whether to pay the full amount each month, or just pay the minimum amount the bank has asked for, but you have to pay hefty interest charges on the money you rollover. This may add up to quite a large sum due to the high interest rates as these are unsecured loans.
Business Credit Cards are the next type of cards. For those with small businesess, they may apply for business credit cards, even though these cards are not exclusive to them. Such cards may have higher spending limits while charging lower interest rates. Small businesses with cash flow issues will be able to tide over tough times easily because there are extensions to the payments.
Last but not least, various major companies offer retail store cards. Such cards are issued by shopping malls and other retail stores, or we have fleet cards, for various fuel purchases as well. Since there is such a huge variety of retail store cards, the terms and conditions are definitely different. Only certain countries accept such cards.
Since different types of credit cards offer different conditions and payment options, you need to decide what cards such as charge cards, credit cards, business credit cards and retail store cards suit you best.
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