Using a credit card is a very convenient way to buy virtually anything under the sun, from clothes to a holiday vacation for the whole family. But keep in mind that a credit card won’t work like a debit card. If you’re using a credit card, it means you are borrowing money. But if it’s not used wisely, you could incur a bad debt. To determine what type of credit card suits you best, be knowledgeable about the common types of credit cards:

1. Zero or Low Interest Rate Credit Cards: This is ideal for those who are capable of and willing to pay card debt quickly. Most providers of such type of credit card offer bargain interest rate on balance transfers from other credit cards. A lower rate can save you a decent amount of money on interest costs. But the low rate usually lasts for 6-9 months only, then immediately becomes higher, usually about 14-16 per cent when one late payment is made. If you transfer a big balance but do not pay it within the grace period, you may have a higher interest rate compared to what you had at the beginning.

2. Rewards Credit Cards: This type is recommended for users who make most of their purchases using a credit card and pay off the balance every month. Issuers of credit cards offer airline miles, cash back, and other points upon purchase of certain items based on how much you spend. Some reward credit cards, for example, offer as high as 5 per cent cash back on selected purchases without an annual fee. Some credit cards have high rates and annual fees but excluding the reward benefits. Other cards have disadvantageous and complicated redemption rules. So it’s essential to read offers carefully.

3. Secured: This type of credit card is best for those who have gotten into some trouble with credit cards before. Using a secured card wisely can help repair or build a bad credit rating. But as you apply you should give a deposit which usually ranges from $200-$250. Many of these cards have high interest rates and annual charges so you should read the fine print carefully.

4. Student Credit Card: This is best for college students who are able to manage money wisely. Students can acquire this type of credit card even if they have not built a credit rating yet. Many issuers of this type of card offer more benefits like bookstore discounts and/or cash back. But some student cards have higher rates. It’s quite easy for college students who aren’t that experienced at handling credit cards to quickly acquire unmanageable debts.

If you want to get free legal advice on credit, finance, and banking, you can simply visit Consumer Credit Legal Service (WA) Inc by checking out the link provided.