Credit cards are continuing to grow in popularity, with more people opting for plastic than ever before. This is understandable, as they allow users to borrow money over a short or long-term period. Whether this is for purchases, debt or just to enjoy the many benefits that some cards offer, the attraction is easy to see. However, there are many options to choose from and there’s no one credit card that can suit everyone. Factors such as your age, credit score, salary and the reason for wanting a card all have an effect on the decision-making process.

The best way to approach applying for a credit card is to find out which types are available and which one would best fit your needs. With this in mind, what is available?

Purchase Card

When we think of a credit card, we often think of a purchase card. These allow you to make purchases and then pay this debt back, over a set period. As well as allowing you to make larger purchases immediately, purchase cards will also often offer an interest-free period for paying the amount back. Therefore, you’ll be able to pay back what you owe, without being charged by the provider.

Those who apply for this type of credit card will often require a good credit score. It’s worth approaching purchase cards with caution as it’s very easy to overspend and not think of the consequences. Plan purchases ahead of time and ensure you make minimum payments, in full and on time.

Balance Transfer Card

Those who have existing debt, may notice that their interest rates are increasing and costs are piling up. It’s for this reason that many people opt for a balance transfer card. This allows you to move debt from one credit card, to another, with a set period of interest-free time in which you can pay off the balance. This time period can vary, from a few months to a few years.

Balance transfer cards can provide a lifeline for those struggling with debt, however the application process can be tough. Moving your debt will often come with a fee, which will be added to your outstanding balance. Also, many providers will look for a good credit score and if you’re already struggling with debt, this may not be possible.

Again, those with a balance transfer credit card should attempt to meet every minimum payment, on time. As well as keeping a close eye on when the interest-free period ends, as this could lead to more debt spiralling.

Balance Transfer and Purchase Card

For those who are looking for a credit card that offers both balance transfers and purchasing power, there are options available. As both facilities are located on a single account- it can streamline the process and reduce any costly mistakes. However, it can be easy to run up large amounts of debt using these types of credit cards. Therefore, plan ahead of time, avoid spontaneous purchases and ensure that you’re reducing your debt.

Credit Building Card

As we have established, the majority of credit cards will require an applicant with a good credit score. Unfortunately, for many people, this just isn’t possible- for a whole host of reasons. This can be a problem as a poor credit score won’t just affect card applications but also loans and mortgages. Therefore, many people will use a credit building credit card in order to slowly improve their credit score, allowing them to gain access to other types of credit. As these cards are suitable for those with lower credit scores, the downside is that they tend to offer smaller credit limits and face higher interest rates. However, when used sensibly for small, regular purchases, which are then paid back on time, they can be a powerful tool for improving finances.

Rewards Card

Some credit cards will offer a variety of rewards, ranging from cashback to instore vouchers or even airline miles. Whilst the potential rewards can be attractive, it’s worth noting that rewards cards will often come with a yearly fee and higher than normal interest rates. Therefore, you need to think carefully before choosing this type of credit. It’s also likely that these cards will require a particularly good credit score- which is something to keep in mind.

Credit cards can offer unparalleled access to credit that you can’t get anywhere else. However, they can also be dangerous, with the potential to needlessly build debt. Therefore, researching options ahead of time and using comparison sites can be paramount to finding the best card for you.

Whether it’s finding the best credit card or any other queries, the team at U-Deliver provide complete financial solutions. Don’t hesitate to visit their website for more information.