Credit and debit cards look similar, with a 16-digit card number, personal identification number, and expiration dates, and these features make the two-card similar. However, these cards have different usage. A debit card allows the bank account owner to spend money by withdrawing cash. A credit card allows the cardholder to spend funds borrowed from a card issuer up to a set limit to purchase items.
An individual can have both a debit and credit card at the same time. Both cards provide convenience; however, the individual needs to be informed of each user to know the right card to utilize when making a purchase.
Finalizing your Credit Card
Credit cards come with a different kind, before applying you need to know which type of card will suit your financial needs. Here are the most common card type and usage.
• Rewards: This credit card is suitable for the cardholder who pays their balance in full every month and need to take their card experience to the next level. These credit cards will offer miles, cash, and points rewards on your spending. Most of the reward card comes with bonuses when the cardholder reaches the set spending limit within a specified time.
• Introductory 0% APR: For cardholders who don’t wish to pay off their balances immediately, these types of credit cards will offer a 0%interest on each purchase and balance transfers for 12-18 months.
• Secured: This type of credit card is suitable for applicants with a poor credit score. These cards have a cash deposit, which is equal to the credit limit. These cards are not similar to prepaid cards as the cardholder still has to make payments, and the card activity is reported to the credit bureaus.
Once the applicant has determined the credit card that most suit his financial needs, they will need to find any offers for these type of cards. There are many great credit cards, which might not be fit for everyone.
Know your Credit Score
If an applicant applies for a credit card within their score range, the chances of being approved are higher. There are different credit cards available for applicants with bad and good credit scores. Applicants with high credit scores have the opportunity to choose from a variety of cards.
Look through the fine print
Read the credit card terms and conditions for any extra find print. For example, some 0% interest credit cards will apply the interest charges to the balance if the cardholder fails to pay them in full before the introductory rate expires. Some credit cards allow the item to be returned to the seller if the card owner fails to make payment within the set time. It’s advisable to read the fine print to see if there are any unfavorable terms.
Safe Way to Build Credit
Applicants with cad credit score may have difficulties qualifying for a traditional credit card. Without a credit account that is responsibly used, it isn’t easy to get FICO to score up again.
One of the ways you might choose is to get a secured credit card. Unlike with other accounts, the applicant has to pay a deposit that covers the debt and protects the bank. Banks reports payments to the credit bureaus, which allows the cardholder to raise their credit score with time. And because the credit line is linked to the deposit, the risk of overspending is much less.