Credit cards explained

There are a large number of credit card companies on the market today, and each offers a wide range of different services. With so much to choose from, it can be a little difficult to know what type of credit card is right for you. However, once you understand the differences between them, you should be able to make an informed decision.

Standard credit cards
With a standard credit card, you’ll be given a fixed credit limit that can only be extended if you make your repayments on time and always pay at least the minimum amount. As long as you clear the balance every month, you won’t be charged any interest. Standard credit cards can be great for purchasing things online, booking movie or theatre tickets or buying groceries in a safe and convenient way. Some standard credit cards also come with a package of other benefits, including insurance deals and reward schemes.

Charge cards
Charge cards are similar to credit cards but don’t have a credit limit as this is based on your spending patterns. They are designed to have the balance cleared every month.

The Amex Platinum card is one example of an excellent charge card package. Platinum cards offer a wealth of exclusive benefits, and a membership rewards program that can help save you money on a variety of products and services. However, platinum cards are not as easily accessible as standard cards as there are salary minimums for applicants which vary between providers.

Travel reward cards
A travel reward card is much like a credit card with a package of benefits that is geared towards air travel. Some travel reward cards are linked to an international frequent flyer scheme, while some are affiliated to a single airline. Generally speaking, airline-specific cards offer better bonuses than generic travel reward cards. However, you can only redeem the rewards with the relevant airline and its partner organisations.

Once you have taken account of the pros and cons of each type of credit card, you’ll be able to choose one that best suits your lifestyle.