Having a credit card is important because it allows you to increase your credit score, making it possible to make large purchases at a good interest rate. However, many people don’t stop and think about what type of credit card is best for them. Certain credit cards come with different perks, and some are more beneficial depending on how often you use them.
Cash Back Credit Cards
Cashback credit cards incentive users by offering back a certain percentage of their purchases in the form of cash. Usually, this equals out to about 1-5% of the user’s spending. This is not always unlimited; some credit card companies stimulate that the cashback will only apply for certain places such as groceries or drug stores. Other credit card companies place a limit on the amount of money you can get with cashback. It is tempting to keep using cashback credit cards to claim the money back, however, keep in mind that you might be spending more than you regularly would. The best use for a cashback credit card would be people who always pay off their monthly balance on time and only use the card for purchases they would have made anyway, not impulse buys.
Travel Points Credit Cards
Having a travel points credit card will allow you to earn points towards travel purchases. You will get a certain number of points for ever dollar spent on your card. The purchases that you can get include flights, hotels, car rentals, etc. Some travel cards even offer travel insurance, trip cancellation, and coverage in the case that luggage is lost. Often, these purchases will need to be made through a particular airline or hotel, one that is participating in the credit card deal. Travel points credit cards are a good choice for you if you travel at least once every year or two. In this case, the travel points would get used and it would be a worthwhile choice for you.
When you have a credit card, you will need to pay fees on it for a variety of different things. These fees are collected from you and then lent out to other people and businesses. This money could be going to be organizations that you do not support, such as companies that are detrimental to the environment.
Some credit card companies offer alternatives for Americans who are looking to be eco-friendlier and more sustainable. Some green credit cards will take a percentage of the amount that you spend and will donate towards Green America. This is an organization that works towards supporting fair trade, cleaner energy, green businesses, and banning products that harm animals or the environment.
Other green cards will help customers track their carbon footprint. This is achieved by preventing people from spending after they have reached their carbon dioxide limit. These types of credit card companies tend to prioritize equality and have many women and people of color on their boards.