Secured credit cards are often considered to be a card that gives opportunities to people to rebuild their credit score by improving their financial habits. However it is not only used by people to rebuild their credit score, but also by those who do not have a credit history yet. Hence such cards are also commonly opted for by someone who has just recently been transferred-in to a new country, and also among students who have just graduated out of school. If these people maintain a good financial behaviour, it would certainly reflect in their high credit score, keeping them in good stead for the future.
A secured card offers benefits to those wanting to build their credit history. However to opt for this type of card surely comes at a price and with other disadvantages. Since the card is a ‘secured’ one, you would need to make a cash deposit when applying for such a credit card. The deposit fee can be quite steep. Apart from paying a hefty deposit amount, the interest rate charged will also be higher than the more common, unsecured cards. Not only that, but certain companies might also charge an annual fee. Hence these disadvantages can really become a burden, and hence should be taken into consideration before choosing a secured card.
One type of credit card that is increasingly becoming popular in recent times is the Rewards Card. It is a perfect choice for those who tend to do most of their purchasing using cards, and who meet their financial obligations diligently. Basically these reward cards give you certain benefits and perks such as cash back on purchases, travel discounts, shopping discounts etc. Hence those who use their cards regularly and pay their interest charges on time, can get a lot more with each dollar spent, in the form of rewards, as compared to those using cash or non-rewards cards to make the payments.
Reward Cards can be quite enticing for customers as it promises to give rewards in return for using the card. However customers should be aware of the disadvantages associated with such a card before falling into the trap and burdening themselves with extra payments. These cards might have a higher interest rate than other cards, hence if you do not meet your financial obligations regularly, such a card can in fact become unrewarding. Also, certain reward cards might charge a relatively high annual fee, which can end up being higher than the rewards you receive in return. Hence it is advisable to weigh your decisions carefully before opting for such a card.
And Then There Are The Low Interest Cards
There are a number of cards available today that tend to fall under the category of ‘low/no interest cards’. Such a card can be extremely appealing to people since it would reduce their interest rate charges. Hence most of your payment for owning a card would go to paying off the balance rather than paying the interest charge. Also, if you opt for a balance transfer card with low or no interest, you can hugely benefit, particularly if your current balance holding cards has a higher interest rate. Hence if used wisely, such a credit card can end up saving you a fortune!
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