What Types of Credit Cards Do Banks Offer?

What Types of Credit Cards Do Banks Offer?

Types of credit cards that banks offer include secured credit cards, business credit cards, subprime credit cards and prepaid credit cards, according to About.com. If the cardholder chooses to pay with a credit card, the purchase is added to his credit account, notes Forbes.

Secured credit cards are mainly used by individuals who have damaged credit or do not have a credit history, states About.com. The cardholder has to make a deposit against the card’s credit limit, which can be equal to the deposit the cardholder made on the card or a percentage of the security deposit. Any purchase with the card reduces the available credit, and the cardholder has to make some payments on the balance on a monthly basis.

Business credit cards are mainly for business use, and they allow merchants to separate personal transactions from business transactions, according to About.com.

Subprime credit cards are designed specifically for individuals with bad credit histories and usually carry high fees and interest rates, explains About.com. They are often approved quickly, making them a good choice for people who cannot get credit elsewhere.

To use a prepaid card, the card holder first has to load money onto the card. Since purchases withdraw the balance from the deposit, these cards do not have minimum payments or finance charges, states About.com.