Different Types of Credit Cards

Learn of the different credit cards used today by shoppers all over the world and of their pros and cons of using them.

Man checking transactions on different types of credit cardsThis is a card that is issued by a bank or a financial institution giving the customer the opportunity to borrow money. The card can be used to buy return tickets to Italy or buying pizzas. Usually, these cards are used at points of sale. If the card holder pays back the borrowed amount within the grace period then he does not have to pay anything. However, if he is unable to pay within the given period then he has to pay some extra money as interest in addition to the borrowed amount. Learn of the pros and cons and different types of credit cards, as follows:

Credit Cards




Pros

1. One can make large purchase now and pay off in smaller amounts.

2. The budgeting process becomes easier as provider sends regular statements.

3. It is easier to carry than take along a bundle of cash when out shopping.

4. If the card holder regularly pays off his dues then he gets good credit score which will be helpful in the future.

Cons

1. If the person is not careful about spending then he can get in debt

2. Usually, people overspend when they are using a credit card as it is easy.

3. If a person fails to pay off the borrowed amount on time then interest is charged. If he still fails to pay the borrowed amount along with the interest then over time it will pile up. As a result of that, small debts seem larger over time.

There are different banks and financial institutions offering credit cards. It is important to get the one that offers maximum benefits. One should ensure that there are no hidden charges involved with the usage of these cards. One should also be determined about paying off the borrowed amount on time to avoid paying interests. It is important to note that withdrawing cash from the credit card will make the person liable to pay higher amount of interest.

The Different Credit Cards

Read here of some of the best cards that banks offer to their customers as follows: