Credit cards are issued by a financial organization after a credit account is approved for the applicant. Once the credit card is issued the credit card holder can make purchase on credit at any merchant location accepting that card. There are different kinds of credit cards available in the US market with each type catering to a specific customer need and customer segment. Credit cards are not limited to individuals but also extend to small and medium business houses that may opt for credit cards.
The different types of credit cards available in US market are as follows:
- Business Credit Cards: Business credit cards are issued to business owners to help them keep business expenses and individual expenses separate and for easy tracking of the business expenses. These types of credit cards often provide rewards on business expenses. Business credit also provides the customer with expense management services to keep a track of your expenses. Business owners can ask for additional credit cards for their employees to meet expenditure incurred by them on behalf of the business house.
- Student Credit Cards: Student credit cards are issued to eligible students with a lower credit limit so that the students do not indulge in excessive spending. Most of the student credit cards have additional bonus rewards for purchases made for studies like books, library fees etc. Sometimes the student credit cards are co-branded with an educational institute.
- Prepaid Debit Cards: Prepaid debit cards are not credit cards in true sense. These cards are preloaded with a deposit amount and the card holder can use the card only to the extent of deposit done. The only similarity with a credit card is that these cards are accepted by the merchants as credit cards since the card carries the credit card brand like Maestro, MasterCard, Visa etc. The benefit is that you do not overspend since the limit is already set to the deposit amount.
- Credit Cards for Bad Credits: These kinds of credit cards are issued to meet bad credits. There type of credit cards are mostly secured in nature, meaning, that the credit limit is secured by a savings or deposit amount maintained by the card holder with the card issuing financial institute. The credit limit on such cards are generally low with high rate of interest and these cards also have many built in restrictions to check the card holder from unnecessary spending.
- Cash Back Credit Cards: Most of the credit card companies have come up cash back facility on their credit cards. The cash back is offered on the purchases made by the card holder for a billing cycle or sometimes the cash back is given only purchases made at selected merchants or only for few selected purchase items. However, in most of the cases the cash back is offered only when the outstanding statement balance is up to a minimum limit set. The cash back amount is a percentage of the outstanding balance or a purchase amount with a limit on the maximum amount to be given as cash back.