These days, one of the most popular topics in the personal finance industry is credit cards. They seem to be the center of discussion on blogs, financial T.V. shows and even in newspapers! This should come as no surprise knowing the the vast majority of consumers in the United States use credit cards and use them option. As this financial option has evolved, more and more different types of credit cards have become available to consumers. Today, we are going to go over the top 3 most popular types of credit cards, who they are designed for and, what has made them so popular. So, without further ado, here they are…
#1 Most Popular – Balance Transfer Credit Cards
If you are looking for a credit card, chances are, you are looking for one that offers balance transfers. Balance transfer credit cards have really become a household name in the past few years. This is because these cards allow you to use them to pay off other, higher interest rate accounts at lower short and long term interest rates. Balance transfer credit cards also come with promotional interest rates in most cases. These are low, often times 0% short term interest rates that will last from the day you open the new card to the end of the promotional period. These cards are designed for consumers with good to excellent credit scores who have a debt to income ratio of less than 15% who would like to reduce interest rates or consolidate debts into 1 easy to manage account.
#2 Most Popular – Secured Credit Cards
Another very popular type of credit card these days is the secured credit card. The reason this option is called “Secured” is because before consumers can use a new secured credit card, they will need to place a security deposit with the lender. In most cases, the security deposit will be refunded after 12 months. These credit cards are designed for consumers who have bad credit scores or little to no credit at all who would like to start improving their credit scores. Therefore, the security deposit is there to alleviate the lender of the added risk associated with loaning to consumers with poor credit scores. Secured credit cards are great for showing credit reporting agencies that you are a worthy borrower because they generally report to all 3 major reporting agencies every month. The key is, keeping your card in good standings!
#3 Most Popular – Cash Back Credit Cards
When it comes to cash back credit cards, the name really says it all. These are credit cards that offer consumers cash back on purchases that they make using it. In most cases, this will happen through a point system. Every time consumers use their cash back credit cards for qualifying purchases, they will be given points. As their points accumulate, these consumers will be able to redeem them for cash back rewards. With that said, it’s easy to see why cash back credit cards have become so popular…who doesn’t like cash back?
About The Author – Joshua Rodriguez
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