Types of Kredittkort (Credit Cards) and Their Uses
In today’s world, several types of credit cards are being advertised to consumers. Because of how many options are available to you, getting overwhelmed and confused is easy.
You can’t just go and get any card without first knowing some important things about it. Luckily, you also do not need to research alle kredittkort (all credit cards) available in the market. You simply need to find out the type that will suit your needs, and then research the cards that fall under this category.
This article is a great place to start your research on which type of kredittkort will suit your needs. Below, we have listed some of the most common types of kredittkort available to consumers.
1. Rewards Cards
Rewards kredittkort offer the holder points according to a percent of how much they spend. Some even give bonus points when the holder spends on popular categories such as dining out, gas, and groceries.
Rewards cards also offer several ways of redeeming the points accumulated. These often include gift cards, merchandise, and statement credits. Therefore, this option is great for daily expenses.
Using this type of card for your daily purchases like household supplies and groceries offers you cash-back, points, and rewards for things you had to buy in the first place.
2. Travel Cards
Just like reward kredittkort, you earn points here too. However, the points earned here are specifically aimed toward travel. These could be points that can get you flexible credits that can be used to make travel purchases; or points that can be transferred to hotel programs and airlines.
Some travel kredittkort even allows their holders to earn rewards within a particular program like a hotel loyalty program or frequent flyer program.
For those that travel often whether for pleasure or business, you can enjoy other benefits when you get a luxury travel kredittkort. With one of these, you can enjoy other perks like TSA PreCheck credits or yearly travel credits.
The best thing about all these is that you do not even need to travel for you to begin earning these rewards. You can accumulate your travel points by using your card to pay for your daily purchases that aren’t travel-related.
3. Balance Transfer
If you’ve gotten indebted by using high-interest kredittkort, then a balance transfer card can be just what you need to pay your debt. How? Let’s give you a concise explanation of how they work.
The best type of these cards allows their holders to get an initial 0% annual percentage rate for a given period. This period is often between 15 to 21 months. Read this article about annual percentage rate to learn more about it.
With a 0% APR, you won’t be burdened with interest charges. This way, you can use the money that would have gone into settling interest charges to pay down the debt you owe.
However, most cards have an upfront requirement of a 3% or 5% balance transfer charge. But even when this fee is taken into account, the money you’d save during the 0% APR period will be significant enough to pay a good deal off your debt.
Plus, you could be lucky enough to find those under this category that do not charge for balance transfer.
4. Low-interest and 0% APR Cards
You will also find several credit cards offering 0% APR for purchases. However, this is usually for a given period, often for about 18 months.
This is a great option for people that want to make one big purchase and then pay back without interest over time.
Some in this category offer low-interest rates. These low rates usually aren’t offered only as an introductory bonus.
5. Student Cards
These are a type of starter kredittkort made specifically for young people because of how limited their credit history is. The requirements for these are not as strict as others; therefore, getting one approved is a lot easier.
The majority of cards in this category do not have annual fees. They also come with several bonuses when the holder makes good grades and rewards for money spent.
Students can develop impressive financial habits and even build their credits if they use their cards responsibly.
A lot of kredittkort out there are unsecured. What this means is that the holder doesn’t need any collateral to own the card.
However, some cards are secured and a money deposit has to be made before the card (often for the same amount that was deposited) can be issued.
For instance, let’s say you get one of these cards with an initial cash deposit of 500 dollars. The card will have a credit limit of 500 dollars as well. So, in this case, the card’s credit limit is usually the same amount as the money deposited. The deposit (hence credit limit) could even be as small as 49 dollars.
Agreed, this idea may not look ideal for something called a credit, however, getting this type of card approved is relatively easy. Hence, if you are looking to build your credit from the scratch, or you need to mend your credit possibly after coming out of a financial challenge, this is a great option for you. You can also visit https://www.cnbc.com/ to learn more tips on boosting your credit score.
7. Business Cards
Business owners can use this card to ensure that their business and personal expenses are kept separate while ensuring they get rewards for their business expenses.
The good thing is that these can also double as travel, cash-back, rewards, and even secured cards. Also, you don’t even need to be a business owner to qualify for one of these.
There are several types of kredittkort because every individual’s financial needs are different. Assessing all the types available can help you figure out which one best suit your needs.
Your credit score, needs, daily purchase, goals, debt are some of the key things to consider before deciding on which ones will be great for you. Once you figure out the best type for you, look for cards under this category with appealing fees, benefits, and carrying costs.