FAQ's About Credit Cards

The most typical type of credit card available is a standard, unsecured credit card that is available from most banks and financial institutions. There are generally two types of standard credit cards - balance transfer credit cards and low interest credit cards.

What is a balance transfer credit card?

Balance transfer credit cards allow the holders to transfer balances from a higher-interest rate credit card to the new one, with a lower interest rate that will save them money in interest charges and payments.

What is a low interest credit card?

A low interest credit card offers either a low introductory annual percentage rate (APR) that usually changes to a higher interest rate after a set period of time, or a low, fixed rate APR.

What are the benefits of a low interest credit card?

The chief benefit of a low interest credit card is that you can take advantage of the low APR to make a large purchase and then take several months to pay it off. They also help consumers save money on interest charges.

Are there credit cards with rewards programs?

Yes, there are several types of reward programs associated with credit cards. They reward the card holder with rebates, cash back, points and other incentives for purchases that are made with the credit card. Typically they are airline mile credit cards, cash back and reward credit cards.

What is an airline mile credit card?

An airline mile credit card, also known as frequent flyer credit cards, offer you airline miles when you use your card. In many cases, you will earn points on your purchases, based on the dollar amount of your purchase. You can then redeem points for airline travel. Some other airline mile credit cards offer direct 'miles' for the purchases you make, which are then converted into airline tickets upon your redemption.

What's the catch?

It's important to look at the terms and conditions of your airline miles credit card to find out what the APR is, and how the reward system works. You will want to find out how many points or miles are awarded for your purchases and how many points or miles it will take to get the airline travel reward. You will also want to find out if the points or miles have an expiry date on them - if you don't use your card a lot, having one and never being able to accumulate enough points to obtain a reward, would be useless.

What is a cash back credit card?

A cash back credit card offers a cash reward when you make purchases with the card. The more you use your card, the more reward you get. Most cash back rates are set at one per cent of your total purchase. Some credit cards offer higher cash back rates. Watch out for the annual fees which can vary from $50 to $100 a year.

What is a reward credit card?

Reward credit cards accumulate points much like an airline mile credit card. The points are rewarded based on your purchases, usually one point for every dollar you spend. There are a variety of reward programs and promotional offers, and they often change, so be sure to read the fine print of the terms and conditions, the APR, annual fees, as well as the reward structure to determine if the card is suitable for you.

What are the typical rewards associated with a reward credit card?

The most typical rewards are gasoline rebates, entertainment rewards and store discounts or gift cards for a specific store.

What if I have bad credit or want to repair my credit?

There are credit cards that are specifically designed for people with no credit, bad credit or who want to repair their credit. There are a few options for you, which include: secured credit cards and prepaid credit cards.

What is an instant approval credit card?

These credit cards are targeted to people with excellent credit records. This approval or denial process may only take minutes of filling out an online credit card application. Once you have received your online credit card approval via email, your credit card will be mailed to you.

What is a secured credit card?

A secured credit card requires a security deposit that is equal to or greater than the credit amount of the card. You can use cash to secure a card or other items such as a car, boat, jewelry, stocks or anything of monetary value. These often have low credit lines (under $300) and usually have a higher APR and annual fees.

What is a debit card?

This card takes the place of carrying a checkbook or cash. It is used like a credit card with certain limitations, such as not being able to rent a car. Purchase transactions are contingent upon having enough funds in your checking or savings account to cover the purchase. Verification of funds require entering your Personal Identification Number (PIN) at a point-of-sale terminal.

What are prepaid credit cards?

Prepaid credit cards are not really credit cards but are used just like a credit card. There are no finance charges on the card.

Are there other types of cards that are for specialty use?

Yes, there are specialty credit cards for people who have special needs or need unique service with their credit use. Typically, these cardholders are business users and students.

What is a business credit card?

A business credit card is for business owners, executives and have many of the typical features of standard cards including low introductory rates, cash back rewards, other reward programs and more. They also tend to have other bonuses which may include special business rewards or savings, expense management reports, additional cards for employees, high credit limits and more.

What is a student credit card?

Students usually don't have any credit experience or history which makes it difficult for them to get approved for a credit card. Student credit cards typically have less rewards and bonuses, but when used correctly can help to increase the credit history of the student.

What do I need to look at when applying for a credit card?

Regardless of the type of credit card you choose, you need to compare cards for:
  • Annual Percentage Rate (APR)
  • Annual fees
  • Reward programs
  • Terms of the rewards and card
  • Conditions of the rewards and card
  • Expiry date on reward programs or points

Comparing credit cards isn't that difficult - but can be a little time consuming. However, spending the time can save you hundreds of dollars in interest and fees ensuring that you choose the credit card that is best for you.

What should I do if my credit card is lost or stolen?

Cancel your credit card ASAP. The quicker you cancel your credit card is the less chance your card will be used and the sooner you will receive a new card. Always keep your credit card number, expiration date and credit card phone number in a safe place. This will save you time trying to locate this information.

Should I purchase credit card insurance?

Yes, you should protect your self against credit card theft. This will give you peace of mind knowing that you are protected against any lost.

Can I get a credit card with less than perfect credit?

Yes, you can apply for a secured credit card. This is a guaranteed VISA or MasterCard secured by a deposit of $200 and more. The cardholder may be given a credit line up to 100% of account balance. This is a good way to start rebuilding credit rating.

How do I cancel my credit card account or application?

All cancellations must be addressed to the credit card issuer. creditcardsessential.com does not have access to personal account information. All information goes directly to the credit card issuers and not to creditcardsessential.com

How can I report a mistake on my credit report?

You will need to report all errors to the three credit bureaus namely, Experian, Equifax and Trans Union. You will be provided with instructions on how to go about fixing credit report errors. For additional information on your credit score and ways to improve your credit ratings, contact Credit Bureaus listed below.

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