What Type of Credit Card User are You?

When it comes to credit cards, most people seem to have their own idea of what they should be used for and how they should be used. There are so many different types of credit cards and they all have their unique advantages.

Following on from Financial Experts’ recent post “Who needs a credit card?” this article looks at the different types of credit card users.


Are you Attracted by Shiny new Objects?

Some people may be attracted to a credit card by the initial rewards on offer. Many credit card providers offer special introductory offers like cashback or loyalty points and many people will be enticed enough to apply for their card.

This type of user will always be looking for the next credit card so that they can take advantage of new special offers once their initial introductory period ends.


Are You a Shopaholic?

If you’re a shopaholic and you regularly part ways with your cash then you may be interested in credit cards that reward you for your spending. To be rewarded when you spend your hard-earned money you could consider either a rewards or cashback credit card.

Cashback credit cards reward you by giving you a percentage of all your spending back each month, this percentage is normally between 1-3% which can be quite lucrative. Also, they may offer you an introductory period of higher cashback.

If you do decide a cashback credit card is the right card for you, make sure that you try to pay off your balance in full every month as you always want to be in control of your spending.

Just like the cashback credit cards, rewards cards reward you every time you spend, however, the rewards vary depending on the specific card. The main advantage with rewards cards is that you can choose the card that better suits your wants and needs.

The rewards you can earn are normally in the form of points, but many card providers will offer special offers. One provider may offer one point per £1 spent using their card, others may offer 2 points. The points you earn can later be redeemed at your leisure.


Are you Planning on Making that Special Purchase?

If you’re planning on making a special purchase, whether it’s a new car or a wedding ring, you may want to use a purchase credit card.

Purchase credit cards are great if you can’t afford to pay off a big purchase in one go, you can also avoid paying any interest. The interest-free period on purchase credit cards typically ranges between 12 and 15 months.


Want to use your Card to Manage your Debts?

If you’re looking for a credit card to help you manage your debts then a balance transfer credit card might be the card for you.

A balance transfer credit cards is useful if you have debts built upon one or more credit cards, and you can save money by transferring your balance to a card that offers 0% interest.

As long as you pay off the amount you borrowed before your 0% interest-free period expires then you’ve effectively borrowed money for free. This can provide some temporary breathing space without needing to see a financial adviser.


Are you trying to recover from bad credit?

Trying to recover from bad credit can be a long and hard process but using a bad credit credit card can help. Also looking at advice such as the Citizens Advice service.

Struggling to qualify for the credit can be incredibly frustrating but bad-credit credit cards are designed specifically for this reason. They give people with bad credit the ability to show that they can handle managing repayments and it will give their credit rating a boost.

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