Financial Literacy 2007 - Credit cards
A cartoon man in red looking through a kaleidoscope with colorful credit cards floating in the sky
credit cards
Which card is right for you?

Find the best card for your lifestyle. Here are four of the most-common types of cards.

4 types of card
  1. Zero-or-low interest rate
  2. Rewards
  3. Secured
  4. Student

1. Zero-or-low interest rate

Best for: Anyone willing and able to pay down existing credit card debt relatively quickly.

Pros: Most cards offer the bargain rate on balance transfers from other cards. The lower rate can save you a bundle on your current interest costs.

Cons: The low rate usually lasts for only six to nine months, then reverts to something higher, usually around 14 percent to 16 percent. One late payment and the card will revert to the higher rate immediately. If you transfer a large balance but don't pay it off during the favorable rate period, you may end up with a higher rate than you had to begin with.

Find the best rate.

2. Rewards

Best for: People who make the majority of their purchases on a credit card and pay off the balance each month.

Pros: Cards offer cash back, airline miles or points toward purchasing select merchandise based on the amount you spend. Some rewards cards, for instance, currently offer as much as 5 percent cash back on select purchases with no annual fee.

Cons: Some cards have high interest rates and annual fees that cancel out the reward benefits. Other have complicated and unfavorable redemption policies. Always read the offer carefully.

Find the best deal.

3. Secured

Best for: Someone with has gotten into trouble with credit cards in the past.

Pros: Most secured cards report to the three credit bureaus, so using one responsibly can be a way to establish or repair your credit rating.

Cons: The secured part means you put down a deposit, usually between $200 and $250, with your application. Many secured cards have high interest rates and annual fees. Read the fine print very carefully.

Find the best rate.

4. Student

Best for: College students who can handle money responsibly.

Pros: Students can qualify for theses cards without an established credit rating. Many offer extra benefits such as cash back or bookstore discounts.

Cons: Some companies charge higher interest rates for students. It's easy for students who are inexperienced with handling credit cards and finances in general to rack up unmanageable debts quickly.

Find the best rate.

Do you have a secret to success with credit cards? Or, are you struggling? Share your story.

« Back to the Table of Contents

advertisement

Show Bankrate's community sharing policy
          Connect with us
Product Rate Change Last week
Balance Transfer Cards 15.71%  0.01 15.70%
Cash Back Cards 16.36% --0.00 16.36%
Low Interest Cards 10.91% --0.00 10.91%
 
Search
advertisement
CREDIT CARD WEEKLY NEWSLETTER

Get advice for managing credit cards, building your credit history and improving your credit score. Delivered weekly.

advertisement

Blog

Allison Ross

BofA to pay $772 million over credit cards

Bank of America is refunding about $738 million to customers in addition to $45 million in penalties.  ... Read more

Partner Center
advertisement

Connect with us