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Types of credit card

Basic credit cards

With most types of credit card you can settle the amount owing in full within a given period of time without incurring interest on purchases, or pay-off a portion of the outstanding amount and carry the remaining balance forward with interest.

However, some credit card companies offer a basic, no frills credit card that has no interest free period, but provides a means by which you can borrow up to a given credit limit. These cards usually have a lower APR than would otherwise apply but begin charging interest on purchases and other transaction types immediately.

Standard credit cards

Any credit card that isn’t a gold, platinum or black card (i.e. a premium card) is likely to be a standard card (also known as Classic Cards). Standard cards are available to anyone over 18, subject to a credit check and the application being accepted.

Premium credit cards (Gold, Platinum and Black Cards)

Premium cards usually offer higher credit limits and have lower interest rates. Many also have extra benefits such as travel insurance, product guarantees and preferential loan rates. Credit card companies offer premium cards to people they consider to be a better credit risk. They are often available only to people whose income is higher than a specific level. The more exclusive cards tend to have annual fees.

Charity/Affinity credit cards

Some credit cards are issued on behalf of charities and other organisations such as football clubs and universities. For this type of card the credit card company will generally make a donation to the charity or affinity group when the card is issued and/or each time that the card is subsequently used – at no additional cost to you.

Charge cards

These cards are similar to credit cards. They allow you to pay for goods and services using interest-free credit. However, the balance must be paid in full each month or you may incur additional fees. Additionally, charge cards normally have an annual fee.

The two largest charge card companies are American Express and Diners Club International, but there are banks and financial organisations that also issue Visa or MasterCard charge cards.

Store cards

Store cards are a type of credit card. They can be used in fewer places, often only in the individual shop or chain that issued it. These cards (issued by stores) are typically not scheme badged. Historically, the interest rates on these cards tend to be higher than on standard credit cards and credit limits tend to be lower. However, many shops provide special offers to their cardholders.

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