Types of Credit Cards
Credit cards are issued by a credit card company (or issuer bank) that sends you a monthly statement of your transactions. You then pay all or part of your balance to the credit card company each month. Credit cards allow you to carry part of your balance into the next statement period. There are 5 common types of credit cards:
General Credit Cards: This is the most common type. These are the credit cards that do not require a security deposit and can be used in most stores. The general credit cards do not have a “special relationship” with a particular organization or retailer.
Co-branded credit cards: Same as the general credit cards, but they have a “special relationship” with a particular organization / retailer (e.g. the Amazon.com credit card). As a result, even though they can be used in most stores they provide extra rewards and benefits in connection with that particular organization / retailer (i.e. Amazon.com, in this example).
Charge Cards:Charge cards are identical to general credit cards, except that you must pay your total balance in full every month.
Secured Cards:Secured cards are often the only credit option for people with bad credit history or no prior credit history. They are identical to general credit cards. The only difference is that before you can get a secured card, you must make a fully refundable deposit, either in cash or by sending a check. This deposit usually becomes the amount of your credit line. Because of the deposit associated with them, most secured cards offer guaranteed approval.
Store Cards: Store cards are identical to credit cards, except that you can only use them to make purchases at the store that gave you the card (e.g. the Macy’s Credit Card).
If you are not sure which credit card is right for you, you can also get credit card advice by our proprietary 'Credit Card Advisor' tool.
Source: Card Hub Education
