by Gary Bunn

A credit card can be a very useful asset if you use it right. They can be used in a variety of situations right from buying goods and paying fees to withdrawing emergency cash loans or renting an apartment. In addition, managing your card responsibly and making your payments regularly can build you a strong credit rating. They also provide you with security in an emergency situation should you ever find yourself in difficulty. Finally they offer an alternative to carrying large amounts of cash on your person, so many people feel more comfortable and secure using a credit card for bigger purchases. Having said that, you do have to be careful when choosing a credit card as an unsuitable card may not offer the benefits to suit you.

Now, choosing a credit card can be made easy if you know what types of credit cards exist in the market, so here's a brief explanation of the various types to help you choose the one that's right for your needs.

Balance Transfer Cards

Go in for one of these if you are getting charged a high rate of interest on your existing credit card. They generally offer an interest free period between 6-18 months on your balance transfer. Although these cards are ideal for people who want to save some money on interest, you need to read the terms and conditions to be clear on the particulars such as the length of the interest free period and any annual fee.

Low APR (Annual Percentage Rate) Cards

These cards can come in the form of an introductory low APR rate that goes up slightly after a certain time period, or cards that carry a lifetime low APR. These cards are just right for people who are trying to reduce their monthly outgoings.

Frequent Flyer Cards

These are known also as airline credit cards or airmiles cards and reward the holder with points whenever they make a purchase on the card. These points are accumulated as airmiles and can then be exchanged for flights to the equivalent of the miles they have collected. Foe example the more airmiles you collect, the further you can fly for free! These cards are great for frequent flyers, but do checked for how many miles can be accumulated for every dollar spent, how many minimum miles are required to make a redemption, and finally the time frame within which the miles have to be redeemed.

Rewards Credit Cards: These too enable the cardholder to accumulate points for each purchase on the card, which then can be redeemed. Dependent on the card type this can be a discount on gasoline, entertainment, specified stores etc. Credit card companies team up with product manufacturers for these goodies and the offers keep changing, making this card suited well to those who shop regularly.