Worldwide, there are many types of bank cards. Each is designed based on the different needs that customers may have. However, many people are confused among so many options.
So I’ve thought about doing this post, as a guide to help us choose.
Bank Cards by Type
The first thing you need to do is to understand what type of card we want. There are only two options:
1. bank debit cards
These credit cards offer us a means of access to the resources we have available in our bank account. Debit called because we use our own money.
2. Banking Credit Cards
These credit cards are a tool to access a line of credit that gives the bank. We get flexibility, but we have to be careful and handle them correctly, responsibly, because they are usually the most expensive credit that exists in the formal financial sector.
On the other hand, they give us a great advantage if we pay the full balance each month, before the payment deadline (which is the best way to use them) will not pay interest. They can also offer promotions to make purchases on credit, often without interest.
These posts are essential reading for proper operation: the trap of credit cards and how to avoid it , and trap the minimum payment on credit cards . In this post I compared from a personal standpoint, debit vs credit and why I prefer to use credit cards.
Once you have chosen the type of card you want, then we must choose the level of benefits.
Bank Cards by Benefit Level
There are classic bank cards, gold, platinum or even higher level, both debit and credit. The higher the level, often include wider access to safe and personalized services. Also in the case of credit cards , at higher levels the interest rate may be significantly lower.
Obviously, a higher level implies a higher cost. Accessibility is also limited. In the case of debit cards, the highest levels correspond to “premium” accounts that require a certain minimum balance are either available only for certain types of customers.
In the case of credit cards, for higher levels higher revenues are usually required, and payment of a higher annual fee. The most exclusive and most expensive cards are usually available by invitation only to selected customers, who have a very high level of spending. Therefore, they tend to get exclusive benefits such as access to golf courses or preferential prices on air tickets business class or higher.
In this sense, to choose must first consider our income level, it will cost the product and the benefits they would get. It is a balance. In addition there are cards that emphasize benefits for people who travel frequently, while other people who have a different lifestyle target.
The insurance can be important, for example some cards include an extended warranty for most of our purchases, which can save a lot of money if required. Others include insurance rental cars which, although not travel much, can be very useful because it avoids paying the insurance that the rental charges, which can be expensive.
Then we compare the various bank cards and keep in mind the cost – benefit.
Bank Cards by type of Rewards Programs
Reward programs are usually exclusive of bank credit cards. There are also several types also meet different needs. The main ones are:
Rewards for Travelers (Miles)
A variety of cards that offer miles for certain airlines or hotel chains which can be attractive to frequent travelers who have such loyalty programs because they can boost profits. Of course these bank cards will not be attractive for people who travel constantly.
There are other bank credit cards that offer points that can be exchanged for a variety of rewards. These are perhaps the most difficult to assess because the points can have a very different value. We look for the best: the difference is very significant.
Compare the amount of points we get for our purchases, but also how much each point in fact, that is how much each reward points.
Cash Rewards (Cash Back)
There are credit cards that return us cash: it is usually 1% of the value of our purchases but the best programs offer double: 2% of our total purchases, plus an additional percentage for those in certain kinds of establishments, as supermarkets or gas stations.
In the following link, as an example, we can find various types of bank cards. Although we must focus on the supply available in our country, it has always seemed interesting to see what exists in other countries too.