Understanding Different Types of Credit Cards

When you enter the world of credit cards, you might feel a bit confused about the different types of credit cards offered. For the most part, there are three broad categories to choose from: unsecured platinum or gold cards, unsecured standard cards, and secured cards. Here is a brief explanation of each:

• Unsecured platinum or gold cards – These cards are reserved for people with an above average credit rating. If you are just entering the world of credit cards, you probably will not qualify for one of these cards simply because you have not had the opportunity to establish a credit history. Credit limits on these cards start at $2,000 and can get as high as $100,000
• Unsecured standard cards – These cards have a credit limit of $2,000 or less and are given to people who do not have quite as solid of a credit history as those who qualify for a platinum or gold card.
• Secured cards – Secured credit cards do not actually extend a line of credit. Rather, you send money to them ahead of time and the money you send determines your credit limit. These cards can help you establish credit if your credit has been ruined or if you have no credit history and cannot qualify for an unsecured card.