Types of Credit Cards

Credit cards can be classified broadly as --

Unsecured, Platinum and Gold Cards. To qualify for a platinum or gold credit card, you must have an excellent credit rating.  Many credit card issuers do not distinguish between gold and platinum cards in interest rates and fees; however, platinum cards have higher credit limits and more benefits and perks, such as reward programs, shopping, dining and travel discounts.  Credit limits associated with gold and platinum cards vary from $2,000 up to $100,000.

Unsecured, Standard and Classic Credit Cards.  Standard and classic credit cards have higher interest rates and less favorable terms than platinum and gold cards.  There isn't a difference between a standard and classic card. The term "classic" is the Visa brand name for its standard credit card.   Some standard cards have annual fees, but most do not. Credit lines associated with standard cards usually do not exceed $2,000 and do not normally have the perks and benefits that come with platinum and gold credit cards.

Secured Credit Cards.  Secured credit cards are issued to those who have no credit history or a poor credit history.  The interest rate is higher than that charged for other types of cards, and the issuer requires a security deposit to guarantee repayment.   The security deposit and the credit line are usually equal hence the term "secured". 

Some companies are now offering credit cards for those with bad or no credit that do not require a security deposit. The application fees, annual fees, and interest rates associated with these unsecured cards are higher than standard cards.  These cards should be used only to re-establish a good credit history only, if at all, and not to run up a big balance.  Read the terms and conditions of these credit cards very carefully as they are extremely high and often not worth signing up for. 

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