Different Types of Credit Cards

Topics: Credit card, Credit history, Credit score Pages: 6 (1551 words) Published: February 5, 2013

1. Introduction
2. Credit cards
* Standard credit cards
* Premium Credit Card:
* Secured Credit Card
* Limited Purpose Credit Card
* Charge Credit Card
* Specialty Credit Card
* Prepaid Credit Card:
* Business Credit Cards
* Gold Credit Card:
* Platinum or Titanium Card:
* Silver Credit Card:
* Rewards Credit Card:
* Balance Transfer Credit Card ]
3. Conclusion
4. Reference

In this assignment, I am doing a particular study about the different types of credit cards. A credit card is a payment card issued to users as a system of payment. It allows the cardholder to pay for goods and services based on the holder's promise to pay for them. The issuer of the card creates a revolving account and grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user.

A credit card is different from a charge card: a charge card requires the balance to be paid in full each month. In contrast, credit cards allow the consumers a continuing balance of debt, subject to interest being charged. A credit card also differs from a cash card, which can be used like currency by the owner of the card. A credit card differs from a charge card also in that a credit card typically involves a third-party entity that pays the seller and is reimbursed by the buyer, whereas a charge card simply defers payment by the buyer until a later date. The size of most credit cards is 85.60 × 53.98 mm (33/8 × 21/8 in), conforming to the ISO/IEC 7810 ID-1 standard. Credit cards have an embossed bank card number complying with the ISO/IEC 7812 numbering standard.

Credit cards
Credit cards now are of various types with different fees, interest rates and rewarding programs. When applying for a credit card, it is important to learn of their diverse types to know the one best suited to their lifestyle and financial status. Different types of credit cards available by banks and other companies/organizations are briefly described below.

Standard Credit Card: 
This is the most commonly used. One is allowed to use money up to a certain limit. The account holder has to top up the amount once the level of the balance goes down. An outstanding balance gets a penalty charge.

Premium Credit Card: 
This has a much higher bank account and fees. Incentives are offered in this over and above that in a standard card. Credit card holders are offered travel incentives, reward points, cask back and other rewards on the use of this card. This is also called the Reward Credit Card. Some examples are: airlines frequent flier credit card, cash back credit card, automobile manufacturers' rewards credit card. Platinum and Gold, MasterCard and Visa card fall into this category .

Secured Credit Card: 
People without credit history or with tarnished credit can avail this card. A security deposit is required amounting to the same as the credit limit. Revolving balance is required according to the 'buying and selling' done. The cardholder of a secured credit card is still expected to make regular payments, as with a regular credit card, but should they default on a payment, the card issuer has the option of recovering the cost of the purchases paid to the merchants out of the deposit. The advantage of the secured card for an individual with negative or no credit history is that most companies report regularly to the major credit bureaus. This allows building a positive credit history. Although the deposit is in the hands of the credit card issuer as security in the event of default by the consumer, the deposit will not be debited simply for missing one or two payments. Usually the deposit is only used as an offset when the account is closed, either at the request of the customer or due to...
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