Credit cards are financial tools that we have all come to rely on over recent years, with more and more of us enjoying the flexibility, ease and convenience that these cards are able to offer. Of course, in order to get the best from your credit card it is important to choose the right card for your needs, as this could ultimately give you far better value for money on your borrowing.
There are many different types of credit cards around these days, and amongst the most popular credit card types are interest free purchase credit cards and rewards based credit cards. These two different types of card are designed to meet different needs and are suited to people with different spending and repayments habits. By choosing the right credit card for your needs you can enjoy far better value on your borrowing and you will be able to enjoy saving on interest or earning something back for your spending.
Interest free purchase credit card
The interest free purchase credit card is ideal for people who want to have a credit card to use for convenience and ease but also want to spread the repayments on their purchases. Whilst all credit cards offer a short interest free period within which to repay the money that you have spent without being charged interest, these interest free purchase cards offer a far more generous interest free period such as six months or twelve months – sometimes even longer.
For those planning to make an expensive purchase or spend a lot of money within a short space of time, such as during Christmas, these cards provide a great way to spread the repayments over a longer period without being charged any interest, which means that you get the convenience, flexibility and ease of using a credit card without having to pay the price.
Rewards credit cards
These credit cards offer a variety of rewards for those that use the card to make purchases. The rewards can vary from one card to another, including rewards such as cash back, loyalty points, air miles, discounts, travel rewards and more. Whilst you only earn back a small percentage of the amount you spend per transaction this can quickly add up, particularly if you use your card regularly.
These cards are well suited to those who use their credit cards to make purchases but who tend to pay the full amount on their card off within the standard interest free period. If you tend to repay your credit card debt of in full each month you won’t be charged any interest anyway, which means that there is no point going for an interest free purchase card. With a rewards card you can get a little something back for using your card whilst continuing to avoid interest by repaying your balance in full each month. You should not use these cards if you are planning to spread your repayments over a longer period as the interest that you pay on your borrowing will by far outweigh the value of the rewards you receive.
Alex is a consumer finance journalist and blogger. He blogs about everything from interest only mortgages to payday loans and from the best savings accounts to how to set up an umbrella company.