It is important to decide which type of credit card is right for you. Here are some tips.

Secured Credit Cards Most credit cards are unsecured. You promise to pay the credit card company back and they give you a line of credit based upon on your past credit card history. However if you have no credit history or have a poor credit card history, secured credit cards are a great way to establish good credit. You usually open a bank account with the secured credit card company and depending on your account they will give you a credit card with a specific limit. This way, if you deposit $500 in the bank account and have a credit line of $500, the company does not have to worry if you default on the bill or not. They have your money in the account.

Rewards Programs Some credit cards reward you for using their credit card with perks such as free miles, points for cash back, etc. These cards are a great way to save up miles or get cash back. However, before you sign up make sure you can use the rewards and make sure that the rewards are in a ratio that is acceptable for you to spend. You don’t want to spend $1,000 only to get back $10 in cash.

Secured Credit Cards

One of the best ways to start your credit history or rebound from poor credit history is to apply for a secured credit card. Secured credit cards are different from unsecured credit cards which is what most consumers use today. Here are some tips on how secured credit cards can help you.

Secured credit cards are not for everyone. For instance, if you have decent credit, you do not need a secured credit card. Secured credit cards are a great tool for people trying to create a credit history or improve their credit history.

Secured credit cards require that the consumer open up a bank account with the credit card company and deposit an amount of money in order to start their credit line. For instance, if you want a $500 credit line, you will usually have to deposit $500 into the account.

Unfortunately, you will pay interest for the credit line that you use plus any other fees that the card company has. Make sure the fees are reasonable. You should not have to pay more than $100 to have a secured credit card, anymore and it is probably not a good deal for the consumer. However for people looking to start out or for people that have a very poor credit history, secured credit cards are a great product.

Store Credit Cards

Many people that like to shop often apply for their favorite store credit cards. Store credit cards are big business and no matter where you shop, you can usually find a store credit card that is available. Here are some tips.

Store credit cards are usually only good for purchasing items at the store that issues them. For instance, you can find store credit cards for most big department stores and national discount chains. Some of the more popular credit cards are Sears, JC Penny, Macy’s and Target.

While store credit cards are very convenient and sometimes give you discounts as a store credit card member, most store credit cards can be extremely costly in the long run. Many store credit cards have extremely high interest rates. Some store credit cards approach interest rates of almost 25%. These rates are usually 100% more than a regular credit card and can mean that you pay lots more for the items that you purchase with the store credit card over time.

When signing up for a store credit card, make sure you read the fine print and acknowledge the interest rate they give you for in store purchases. While store credit cards are convenient, make sure you pay them off quickly to avoid large finance and interest rate charges.

Business Credit Cards

If you are a small business owner and sometimes require some short term funding, one of the best ways to accomplish this goal is with a business credit card. Business credit cards are extremely convenient for small businesses and in many cases essential for them to do business.

Many small businesses need to buy thousands of dollars worth of goods or services which will be reimbursed either in the next few days or within a months time, having the money to purchase inventory is extremely important and business credit cards are an easy way to accomplish this goal.

Most business credit cards work differently than unsecured consumer credit cards. For instance, instead of having a rotating credit limit which can be paid off over the course of a few months, most business credit cards such as American Express requires the business to pay off the entire balance at the end of the month. For most consumers, this would be a nightmare, but since many businesses have a different type of cash flow, it usually works out fine.

Many business credit cards usually cost the business an annual fee, plus other fees including interest. Besides the use of the card, many business credit cards come with lots of great services, such as concierge services, B2B directories and help locating legal advice or small business advice.

College Student Credit Cards

If you have ever been on a college campus, there are plenty of offers for college student credit cards. Most students have never had a credit card and banks line up in droves in order to make them life long customers. Here are some tips on college student credit cards.

Credit is an important tool in a consumer’s tool box these days. A good credit history is necessary to buy a car or to be approved for a mortgage. While starting a credit history is important, don’t be blind to the details of using your credit card.

For instance, make sure you educate yourself on how credit cards work. Many students think that credit cards are money in the bank, when they are really loans that need to be repaid. Make sure you know about all the fees and how the interest works on your credit cards. Buying an item on a credit card can cost many times over what you paid for it originally if you just pay the minimum payment each month.

While credit cards can be helpful, make sure you are ready for a credit card and financially responsible enough to pay off your credit card debt once the bill arrives.