Different Types of Credit Cards
Contributed by Amanda Wood
Traditional Credit Cards
There are many different types of credit cards. The traditional credit card is the one where you carry a balance. Basically the credit card company gives you money that you don't have. You then have to pay it back according to their schedule, along with their interest and any fees that come with their credit card. The amount that they give you, called your credit limit, is determined by many factors. Mainly its determined by your credit report, and whether or not you've had past or previous credit cards, and how well you've managed them.
Spendy Credit Cards
Another type of credit card is a charge card. Charge cards are a little bit different then credit cards though. They are also known as travel and entertainment cards. For these cards, you do not have a credit limit. You can just use your card as much as you want, and spend as much as you want. The only downfall of this scenario is that you are required to pay off your entire balance when you receive your bill.
Although if you have an American Express card and you use it to charge air fare, cruise fees, or for booking hotel rooms, you can pay off your balance over 36 months. The downside to this is that you'll be charged between 19% and 21% interest, while still making minimum monthly payments. Your minimum monthly payment would be $20, or 1/36 of your balance owed, whichever is greater.
