How to Choose the credit cards for your needs

Not all credit cards are the same. Understanding the different types of cards available can help you decide which card is best for you.

  • Traditional credit cards for general use. These are the most basic type of unsecured line of credit available. You can buy items up to a set credit limit. The credit card company applies a standard interest rate based on your credit score.
  • Reward / point reward credit cards. These give you something back for shopping, like points to redeem for things like air travel, groceries, and special events. You earn points for purchases and once you reach a certain level of points, you can exchange them. These credit cards always have higher interest rates than traditional cards!
  • Credit cards with cash back. These give you a cash back percentage for some or all of the purchases you make. You usually receive the money in a lump sum at the end of the year. Like the rewards cards, these cards have higher interest rates.
  • Secured credit cards. You can use a credit card like these to build credit if you have bad credit or no history. Just make a deposit with a creditor. The amount you deposit (minus the fees) will become your credit limit. Pay your bill like you would with any other credit card. However, if you don’t pay, the creditor can take your deposit.
  • Store credit cards. These are cards issued at a specific store. Retailers offer points and rewards programs for users of their cards. These cards are generally easier to obtain with bad or no credit. Just be sure to read the terms carefully. Store cards tend to have higher rates and restrictive terms. For example, some cards have deferred interest , which can lead to big bills and challenges down the road.

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