Types of Credit Cards Flashcards
What are the six types of credit cards?
- Standard unsecured credit cards
- Secured credit cards
- Credit cards for students
- Small business credit cards
- Store credit cards
- Charge cards
What are the 3 types of credit cards by user category?
- General Consumer Credit Cards
- Student Credit Cards
- Business Credit Cards
What are the 3 factors that determine your creditworthiness?
- Credit History
- Income and Assets
- Debts and Liabilities
What are the 3 types of credit cards by product terms?
- Rewards Structure
- APR Structure
- Fee Structure
What are the 5 types of credit cards by special characteristics?
- Secured Cards
- Organizational Affiliation
- Merchant Affiliation
- No Pre-Set Spending Limit
- Charge Cards
What are the 3 types of cash back credit cards?
- Flat-rate cash back credit cards
- Tiered cash back credit cards
- Bonus category cash back credit cards
What are the 3 credit card type hierarchies?
- Type of User
- Underwriting Qualifications
- Terms & Features
What are general consumer credit cards?
What most people consider “normal credit cards,” general-consumer cards comprise the largest segment of the market. Their overall value varies widely, based on issuer, card network, credit standing requirements, and a number of other factors. The CARD Act applies to general-consumer credit cards, which means users are eligible for all available rights and consumer protections.
What are business credit cards?
The small business community has unique financial needs, which merit a unique type of credit card. Business credit cards tend to offer higher credit lines than their general-consumer and student counterparts. They also give you special expense tracking features, the ability to customize spending limits for employee authorized users, and rewards targeted to common company expenses such as office supplies and telecommunications services.
What are the requirements to obtain a business credit card?
To get a business credit card, you must be the owner or principal of the business AND be able to provide a Tax ID Number (TIN) or Employer ID Number (EIN), along with your personal Social Security number (SSN). The need to provide your personal SSN is evidence of the fact that you will be held personally liable for business credit card debt.
Are small business credit cards covered by the CARD Act?
Small business credit cards are not covered by the CARD Act, which means users are not eligible for a number of important consumer protections. This includes the rule against arbitrary interest rate increases. However, certain issuers have voluntarily extended key parts of the CARD Act to their small business customers.
What is a rewards structure?
Credit cards offer spending-based rewards in terms of cash back, points, and miles. Some cards offer the same per-dollar “earning rate” across all purchase types, while others provide extra rewards in certain specific categories, such as gas, groceries, or travel. In addition, it’s common for cards to offer initial rewards “bonuses,” whereby the user is awarded a lump-sum allotment of rewards after their first purchase or as a result of meeting an initial spending requirement.
What is an APR structure?
All credit cards charge interest. And if you don’t pay off your full balance at the end of each billing period or you make the unwise decision to do a cash advance, you’re going to get hit. More specifically, credit cards generally have three different types of interest rates that are relevant when shopping for a credit card offer: an introductory rate for balance transfers, an intro rate for new purchases, and a regular APR. Sometimes they’re the same. Sometimes they’re not.
What is a fee structure?
Like most financial products, credit cards are known to charge a number of different fees, ranging from annual membership fees and balance transfer fees to foreign transaction fees and cash advance fees.
What are secured cards?
Secured cards often represent the best credit card option for people with bad, limited, or no credit history. They are practically identical to general-purpose credit cards, with the sole exception being that a security deposit is required to open a secured credit card. This deposit is fully refundable and will be returned to you upon closing your account with no outstanding balance. You can fund this deposit in multiple ways, including via checking account, money order or cash (in the event that the bank offering the secured card has a branch in your area). Given that the security deposit typically serves as a secured card’s credit line, most issuers offer nearly guaranteed approval, as there is no threat of a consumer not paying back what he owes.
