There are several different types of credit cards to choose from including airline credit cards, low interest, balance transfer, instant approval, cash back, business, pre-paid and student credit cards. Student credit cards are particularly helpful in keeping track of you child's expenses. In determining the best credit card offer for you, consider the following. First, consider the different rates associated with each credit card offer including the APR(Annual Percentage Rate), the Annual Fee if there is one as well as other cardholder benefits.
A low interest credit card has either a low APR or a low introductory APR. Some interest rates are even as low as 0%. A low interest credit card can be a good choice for the individual who tends to either leave an outstanding balance on their credit card or tends to pay their bills late. A low interest credit card can help save you money by reducing your interest and finance charges.
Cash Back Credit Cards pay cash back for making purchases with their card. These credit cards usually offer rewards programs or cash back incentives for purchases made with their card. With airline credit cards you can earn airline mileage and free airline tickets, an ideal way for the business person who travels frequently to save money and earn free tickets.
Business and Corporate Credit Cards offer a number of cardholder benefits including detailed credit card expense reports as well as travel reward programs. Some corporate and business credit card offers even allow you to have your company name on the card itself.
A Student Credit Card is designed for high school and college students. A student credit card is an excellent way for a young adult to start establishing a good credit history.
If you have less than perfect credit, you might want to search for a secured or bad credit credit card. Secured credit cards for people with bad or no credit can help re-establish your credit.
Variable Vs Fixed Rate Credit Cards
One of the first things you should always look out for in a credit card is the low APR and the low annual fees. Now, it is evident that you can’t have the best of both worlds thus you’ll just have to do with a balance between the two. You can either pay high annual fees year in and year out but save up on interest rates, or you can save on the fees but risk being charged a higher interest. Apparently, the best way out of this is just to clear your outstanding balances each month. However, many of us are not masters of our finances. Lucky for us though, there exists another way to get around the system and that is to obtain cards with variable rates.
Unlike fixed rate credit cards, variable rate credit cards impose APR that fluctuate according to indices such as the Prime rate. The prime rate is dependent on the amount of money that can be borrowed by banks in the United States from the Federal Reserve. Cuts made to these reserves will bring down the rate and thereby affecting the interest rate they charge upon your card. However, great care is taken against the rates falling too low and making the company suffer major losses. Thus, there is usually a floor-rate implemented on these cards. Unfortunately, when prime rates escalate, there are no ceiling-rates to protect card users. Customers have to literally go with the flow if they decide on variable rate credit cards.
On the other hand, it should not be assumed that a fixed rate card will impose APRs that will never change. The term ‘fixed rate’ here would be better explained as a rate that is stable for a longer period of time as compared to variable rate cards. Companies can merely issue you a 30-day notice in writing and your APR can suddenly jump a percentage or two, with or without your consent. One such example is the introductory low APR promotions that companies use to enlist new credit card users. After 6 to 12 months of 0% APR, card companies can immediately change your fixed rate credit card APR to a figure that is higher than most cards without the introductory 0% APR.