Beneath all the small print and subtle differences from card to card, the idea of a credit card is simple. You receive a card in the mail to use for any transaction, much as you would with your debit card. At the end of the month, your statement details all of your charges and any rates or fees you’re required to pay, and you make your payment to the creditor. Instead of paying directly from your checking account in the moment, you pay for your purchases later.
While credit cards work simply enough, it’s still important to pay attention to the details. For example, different companies charge higher interest rates than others, so you should ask for the lowest interest rate you qualify for. Some cards offer benefits, such as rewards for using your card for certain transactions. By comparing different cards before filling out your credit card applications, you can choose the perfect card for your needs.
There are several different types of credit cards. Here are some of the most popular options: