The Credit Card: Meaning And Types

Basic Understanding About The Credit Card

Basically, a credit card is a debt facility given by the financial institutions to not only raise the credit facility but also make the payment facility easier. One can make online or offline payment through the credit card. In fact, in any emergency situation, having no liquidity in the account, the holder can raise debts up to some limited extent. In consideration, the financial institutions charge some cost to provide the debt facility.

Types Of The Credit Cards

There is the number of categories of cards and this distribution varies from bank to bank too. Following are some card types and ideas to avail the facility of credit card:

• Standard Credit Card

The simplicity and inculcation of all basic features make the card standard card which also known as the plain vanilla credit card. Being easy to understand, this card does not offer any reward. Like other cards, a finance charge is given or taken as per the case on the outstanding balance of the card. A card holder of the card must deposit some fixed amount on the due dates.

• Business Credit Cards

As the name speaks about the card, this credit card is designed to fulfill all business purposes. The owner of the card must be a business holder. Though there are many other classes of the business card, but most of them contain very similar features except one or two ideas. The reward coverage of the card is completely business related like shipping reward, technology reward, etc.

• Secured Credit Cards

The secured credit card demands some deposit named as the security for the card. The deposit amount is one or two times of the credit facility given. The card is mostly issued to the account holder having credit damage or no credit history in the account. The card furnishes many perks to build the interest of the holders so that one gets more and more benefits.

• Student Credit Cards

These cards are specifically designed for the school and college students for their convenience. Having the low-interest rates by making transfers and debts, the card contains many other perks or rewards. It is quite easy to get the student credit card.

• Digital Credit Cards

A digital card is typically an identification card which virtually represents the card-holder electronically with some strict security codes to make the payment or withdraw the amount. Basically, it is a digitized format of the credit card which contains all facilities of the standard card.

• Prepaid Credit Cards

As per card name, one can easily get the idea behind the card. Yes, you need to pay some advance money to use the card. Load money to the card to use the card up to that extent. The important thing about this card is that it neither has any finance charge to put on the balance nor there is the requirement of any minimum payment. The card is similar to the debit card as they do not give you the facility to generate the credits.