Choosing your credit card wisely can mean the difference between not getting what you want to paying too much. There are a few different types of credit cards aimed at people with different expectation and financial situations. So the credit card you choose or the credit card which is best for your purpose will be based on the amount your comfortable paying for in return for features and benefits.

The types of credit cards

• Low interest credit cards
• Rewards credit cards
• Frequent Flyers credit cards
• Gold or Platinum credit cards

Higher income earners can afford to pay for the top benefits credit cards offer because the interest rate and annual fees tend to be higher, high income earnings can opt for a gold or platinum credit card with the benefits of insurance, rewards and frequent flyer points, better support in exchange for higher annual fees and higher interest rates.

Budget wise people who can manage their money well enough to repay the credit cards debt in full every month would not be subject to interest rates so can opt for rewards or frequent flyer type credit cards. You would only have to cover the annual fees components of the card but can take advantage of the benefits they provide.

If you leave a debt on your credit card from month to month then a lower interest rate would suit your needs better because of the reduced interest charges and fees and no benefits like rewards. Although you will have to repay your credit card debt, many people operate their credit cards with a revolving debt and the lower interests charges help reduce the cost of having a credit card.

Low income earners and even the unemployed on benefits will not be accepted for a credit card but can still use credit cards payment facilities if they open up a debit card bank account. A debt card is not a credit application so you won’t need to prove your capable of making credit card repayments, a debt card is used just like an eftpos card, using your own money in the bank account when making purchases.

If you have not applied for a credit card before and you do not have a credit history with any loan companies, you will need to provide satisfactory information that you’re capable of meeting the repayments for a card. If you can supply employment and asset information in the application process and your situation is deemed an acceptable risk to the credit card lender, you will have a better chance for approval. So if this sounds like you then you might want to start off with a basic credit card with a lower interest rate and low annual fee.

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This entry was posted on Thursday, June 2nd, 2011 at 5:57 am and is filed under Credit Card Tips. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.