Which Credit Card is Right for Your Needs?

(Last Updated On: January 1, 2019)

No matter what kind of credit you have, there is generally at least some type of credit card available to you and it is important to understand the different types of credit cards available to you to make the most informed decision. Credit cards aren’t inherently bad things to have, but must be used wisely. Here are four types of credit cards to help you choose the right one for you and your financial situation.

Secured Credit Card

Secured cards can be a great way of rebuilding or establishing credit, but they also come with some pitfalls. The way you get a secured card is to deposit an amount that is generally equal to your credit limit. So, if you deposit or send in $500, then your credit limit will be $500. One problem with secured cards, however, is that in addition to paying a deposit, many will have both an annual fee and carry a relatively high interest rate. If you need to use a secured card, it’s generally best if you don’t carry a balance and apply for an unsecured card after a few months of making on-time payments.

Unsecured Card

If your credit is not great but not awful, you may qualify for an unsecured card with a high interest rate and sometimes even an annual fee. If you have fair credit, you will most likely be able to find a card with a moderate interest rate and if you have great credit, you can probably find a card with a very low interest rate. Before choosing any card, however, you will want to research carefully so you can choose wisely. A little credit card knowledge can save you a great deal of money.

Airline Miles Card

If you travel often, you may want to look for a card that offers airline miles as a reward for purchases. Be aware, however, that airline miles cards will often carry a higher interest rate and sometimes even charge a substantial annual fee. If it’s going to take you a few years to rack up enough points for one ticket, you might be better off just using a lower interest rate card with no annual fee.

Rewards Card

Like airline miles cards, rewards cards can carry significant benefits, but may also charge a higher interest rate and annual fee. As with all cards, consider carefully just how much you are going to use it and the genuine dollar value of what you are getting versus what it is costing before signing up.

When it comes to credit, knowledge is power. Credit card knowledge can help keep you from spending far more on purchases than you would by just paying cash. Credit cards can be a very useful financial tool, but only if you use them wisely.


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