Credit and Debit

There are credit cards tailored to fit the deeper needs of virtually everybody: moms, dads, students, businesses, even little blue-haired ladies like Mildred. They all come in the standard shape and size (about 2”x 3”), but the varieties are endless …

• Zero-or-Low Introductory Interest Rate—To entice you to sign up for their card, banks often offer 0% interest for a start-up period, the rate then goes up to a normal rate (which is based on your track record with credit cards). 

Balance transfer cards are low interest cards geared to people who have high credit card debt. Balance transfers are how they “juggle” their credit card balances; they move the money they owe around…pay one credit card off with another then later transfer that balance to a new card, and so on.

• Reward—Some credit cards let you earn “points” when you use the card, or earn cash back on purchases. Convenience users like these. They’re going to be spending the money anyway, so it’s a bonus to earn rewards.

• Travel and Airline—Like a reward card geared to travelling; you can earn frequent flyer miles by using your card, then redeem the points for airfare or free nights at hotels. Business people and others who travel a lot like these cards; sometimes they get special deals or special treatment when traveling.

• Affinity—Rebecca loves pandas. Pandas are endangered, and she wants to help. Then she sees an ad for a new credit card for World Wildlife Fund. She applies immediately and it arrives in the mail a few days later. When she uses her card, she helps in a couple of ways: first, it gets the word out about pandas needing help because when she uses the card, the WWF logo and the gorgeous, cuddly panda on her card catches people’s eyes; and WWF gets the reward points, or a small percent of the price tag for the new purse Rebecca’s buying.

• Secured—Clark Creditless has no credit history; he’s always used cash or his parents’ checks. He wants to start establishing credit, so he applies for a secured credit card. It’s just like a regular ol’ credit card except that he has to deposit some cash at the bank first. The cash is collateral so if he doesn’t pay his bill, the bank can just take the cash instead.

Credit card companies also design card programs for groups with special needs like businesses and students.

• Student cards are often low-limit, no-frills cards. They take into consideration that often students don’t have an income and give the students a chance to build a credit history.

• Cards for businesses often offer lower rates because the bank’s risk is a little lower and benefits like travel rewards or office supply points.

It’s kind of funny that there are so many different credit cards out there, when you consider that 60% of cards are from the top three card issuers (Bank of America, Chase, and Citibank).

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