Contents

• What are the different types of plastic cards?
• Do all credit cards offer the same service?
• Standard (Unsecured)
• Secured
• Prepaid
• Specialty
• How do I get a credit card?
• Am I obligated to accept the offer if I apply?
• What if my application is rejected?
• I've had credit problems. Can I still qualify for a credit card?

What are the different types of plastic cards?

The various types of plastic cards in the market are:

• Debit Card - when you pay with a debit card, the payment is automatically taken from your bank account within a few days of your purchase. Think of it as an 'electronic cheque'. There is no form of credit facility involved.
• Credit Card - a credit card represents a loan agreement where you are offered credit, providing you pay off a minimum amount each month - the usual minimum payment is approximately 3% - 5% of the balance. You can charge purchases up to the amount of your credit limit and pay for them later. You can sign for purchases or you can purchase by telephone or the Internet. There are many different card issuers, but most operate through two worldwide credit card networks - VISA and MasterCard.
• Charge Card - a payment card enabling the holder to obtain goods and services without the requirement to pay cash. Accounts are normally submitted to the card holder monthly and must be settled in full. In addition to obtaining goods, the charge card can be used to obtain cash. Well-known examples are American Express and Diners Club.

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Do all credit cards offer the same service?

No, there are huge differences in the services provided by credit card issuers. In general, there are four categories of credit cards

• Standard (Unsecured)
• Secured
• Prepaid
• Specialty

and within each category; there is a wide variation of offerings.

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STANDARD CREDIT CARDS

Standard credit cards are the most typical type of credit cards. These are unsecured credit cards that are readily available from most banks and financial groups. These types of cards vary in how the annual percentage rate (APR) is offered or calculated. Here are several examples:

• Balance Transfer Credit Cards
  Balance Transfer Credit Cards are designed to allow consumers to transfer a higher interest credit card balance onto a credit card with a lower interest rate, thus saving them money in interest charges.
• Low Interest Credit Cards
  Low Interest Credit Cards offer either a low introductory APR that changes to a higher rate after a certain period of time or a low fixed rate APR. Many people take advantage introductory APRs to make larger purchases, so that they can take several months to pay them off. Low APR Credit Cards can help save consumers a lot of money on interest charges.
• Credit Cards with Rewards Programs
  Credit Cards with Rewards Programs usually "reward" the card holder incentives, rebates and even cashback rewards for purchases they make on their credit card. Rewards Cards usually require better than average credit for approval.
• Airline Mile Credit Cards
  Put simply, airline mile credit cards or frequent flyer credit cards give you airline miles credits (or frequent flyer miles) whenever you use your card. Typically, you as the cardholder accumulate "points" based on the dollar amount of your credit card purchases over a period of time. Based on a predetermined point level, you can then redeem those points for airline travel (much like frequent flyer miles).
• Cash Back Credit Cards
  Cash back credit cards give you cash rewards for making purchases with the card. The more the card is used, the more cash rewards you usually get. Most cash back rates are around 1% of your total purchases, excluding interest and finance charges. However, some cards offer a higher cashback percentage with increased usage while still others offer a higher cash back percentage at select merchants or for particular types of purchases. Since cash back programs are costly to the credit card companies, some cash back credit cards also have an annual fee. This type of card is particularly good for people who are faithful about paying off their balances each month. If used appropriately a cash back credit card can earn the cardholder a significant amount of money over time.
• Reward Credit Cards
  Reward credit cards are similar to cash back cards in that you can accumulate points towards a reward structure, which is based on how much you use the card over a period of time. Credit cards offer different reward programs and promotional offers often change, so be sure to thoroughly look over the card's terms and conditions of each specific card before applying.
  
  Typical rewards include:
  1. Petrol rebates
  2. Entertainment rewards
  3. Store discounts for specialty store cards
  Reward programs are costly to the credit card companies; therefore, many reward credit cards also require an annual fee. This card is particularly good for people who are faithful about paying off their balances each month. By minimizing their finance charges, such individuals will reap greater benefits from the associated rewards credit card.
• Bad Credit and/or Credit Repair
  Credit can easily go from good to bad with poor judgment, mismanagement of credit cards or simply a change in job or financial situation. This does not mean you cannot get a credit card. There are several options available for people who have had bad credit in the past and for those who are currently trying to repair their credit.
  
  Depending on your specific situation, debt consolidation, use of introductory APRs on balance transfers or other options may be the best choice. However, if you still need credit or want to start repairing your credit by proof of action, there are several credit cards designed to help "rebuild" poor credit histories.

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SECURED CREDIT CARDS

Secured credit cards require collateral for approval. With secured credit cards, a security deposit of a predetermined amount is needed in order to secure the credit card. Generally, the security deposit needs to be of equal or greater value to the credit amount. Collateral can come in the form of a car, a boat, jewelry, stocks or anything else of monetary value. Secured credit cards are for people with either no credit or poor credit who are trying to build or rebuild their credit history.

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PREPAID CREDIT CARDS

Prepaid cards are, in fact, not credit cards at all BUT rather are used just like credit cards, wherever credit cards are accepted. The advantages of prepaid cards is that there are no finance charges and they help you avoid debt, in that all purchases are paid for beforehand. With prepaid cards you determine the credit line. Generally speaking, a cardholder's credit line depends on how much money he/she transfers to the card. Therefore, there is little risk of running up credit card debt, while budgeting is made easier.

Although most prepaid cards do not charge finance fees, other fees may apply, including: monthly fees, startup or application fees, overlimit fees, ATM fees and more. Be sure to thoroughly look over the terms and conditions for each specific card before applying.

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SPECIALTY CREDIT CARDS

Specialty credit cards are for individuals with unique and special needs for their credit use. Examples of these types of cardholders include business users and students. These credit card programs are designed specifically to meet the needs of these particular groups.

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• Business Credit Cards
  Business credit cards are available for business owners and executives and have many of the same features as traditional credit cards: low introductory rates, cashback rewards, airline rewards, etc. However, business credit cards can also have many additional benefits in comparison to traditional credit cards.
  
  Some of these bonuses include:
  1. Business expenses kept separate from personal expenses
  2. Special business rewards and/or savings
  3. Expense management reports
  4. Additional cards for employees
  5. Higher credit limits
• Student Credit Cards
  Students generally have little or no credit history. Because of this quandary, students may often find it difficult to get approved for a traditional credit card. Luckily, student credit cards are set up to help students build up the credit history that most of them don't already have.
  
  Student credit cards are often scaled back in terms of rewards, features and other benefits, but they can still be a valuable commodity. If used wisely, a student can take the first step towards building a solid credit history with a student credit card.

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How do I get a credit card?

1. Through our Credit Card Wizard, you can interactively search for a credit card based on the features most valuable to you. You can compare using your own personalised criteria, whether its price, brand or reward programmes.
2. The results of this comparison will be presented in graphical format together with the relative importance in percentage of the most valued features to you.
3. After comparing your most valuable features, you will be presented with a list of ten suitable credit cards. Each card is given a percentage so you can see how close each product matches your preferences. You can view the details for each of the credit cards in the list to help make a decision.
4. For our on-line partners, you can complete the application form for their products on this site and send it off. All aspects of your application are assessed by the product provider, and a decision is provided within 24 hours. For all other product providers listed, you can apply either through their own website, or by telephone.

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Am I obligated to accept the offer if I apply?

If you apply and are approved for a credit card, you are under no obligation to accept the offer. An offer will be sent to your listed address and you choose to accept by returning the signed document to the product provider.

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What if my application is rejected?

If your application is rejected, you can ask your credit card provider to review the application. If a credit reporting agency has been used, you can ask for the agency name and address. Write to them requesting any details held on you (see FAQ: How do I check my credit rating?). Remember that you can apply for more than one card - however for credit rating reasons it is not advisable to apply for more than five cards within a 6-month period.

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I've had credit problems. Can I still qualify for a credit card?

If you are trying to re-establish credit, it is likely that you will be issued with a 'secured' card, which means that your credit agreement may have to be guaranteed or "secured" with a cash deposit up front. This deposit guarantees you will repay money borrowed using your credit card. The limit on the card is usually the same as the guaranteed deposit.

Otherwise, you may be issued an 'unsecured' card - where no money guarantee is required. However, the card charges may be higher because you are considered a higher risk. Once a good credit history has been established you will qualify for more credit card privileges.

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