The Three Different Credit Cards and Basic Difference amongst Them
As you cross the age of eighteen and are approved to be an
adult you, you must have received calls or emails offering you credit cards.
From the commercials on the television and the internet, it is quite obvious
that use of a credit card has become a very normal thing in present society. To
own assets like cars, houses it is not possible for all to pay in a lump sum
and people usually use the option of credit to buy them. Since credit cards are
a part and parcel of our lives in this modern era it is important to know about
them.
In this article, we shall discuss the three types of credit
cards available.
Personal
Credit Card
These credit cards are offered by many companies. The rates
mostly start from nine percent to twenty percent. Though nowadays many companies
also offer zero percent balance transfers. This can range from the duration of
the balance transferred. It may be two months or even two years. The usual
practice of the companies is to introduce with low rates and eventually
increase it. It is a very common thing but many users don't have any idea about
this as they do not go through the terms and conditions of the personal card.
Small
Business Credit Card
In these credit cards, the rates are higher in comparison to
personal credit cards. The reason for this is the higher limits. Usually, these
rates range from twelve percent to twenty-five percent. The range of limits in
these cards ranges from fifty thousand dollars and can range up to hundred
thousand dollars. Balance transfers are also allowed in these cards, though
transferring large balances can be difficult. The payment policies are less
stringent on small business credit cards and the cash advance feature is much
more flexible in comparison to personal credit cards. The best feature of these
cards to a small business is that the business owner is not restricted to pay
monthly. The payment can be done bi-monthly or even quarterly.
The
Corporate Card
The third and the most
difficult type of card to obtain is the corporate credit card. They are given
on the basis of a long credit history of a company. This comprises of loans
taken by the organization, credit accounts, and clean credit history for a long
term. This is not the case with small business credit cards and personal credit
cards. To get a corporate credit card the organization also need to show its
assets and has to prove that it has been profitable for minimum two years and
up to five years.
The corporate credit lines range from fifty thousand dollars and can range up to millions of dollars.
With the company's expansion, the credit limit is also increased. Repayment
terms are quite similar to small business credit cards, though the rates are
substantially higher. The reason for high rates is high limits offered. The
rate of interest can range from twelve percent to twenty-nine percent. In case
a huge corporation is borrowing a big amount, a flat rate may be charged.
The basic difference between the three cards is the limit,
the interest rate and time duration for the payment. Higher the credit limit,
higher the rate of interest would be.
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