by Joseph Kenny | 06/25/09

There are four different types of credit cards. Do you know which one is right for you? Each one has its own pros and cons, and each is suited best for a particular type of cardholder. Still, only by examining the pros and cons of each can you decide which type of credit card will serve you and your financial goals best.

Low Interest Rate Cards

These low or zero interest rate cards are best suited to those cardholders who have the ability to pay off their balance shortly after obtaining the card. Its pros include how it offers its special low interest rate for a period. If you transfer your balance from another card then you can stand to save a lot of money on interest.

Unfortunately, this low interest rate only lasts for a time. After this low period, the interest rate usually returns to a high number typically around 14 to 16 percent. It will only take one payment that is late before this higher rate will kick in. If you cannot pay off the balance during the introductory period then you could take a financial hit when the rate jumps back up.

Rewards Cards

Rewards cards are for those who use their credit cards for everything and pay off the balance every month. The bonus is that these cards give you airline miles, cash returns, or points toward predetermined merchandise.

The downside is that some of these cards come with high interest rates as well as annual fees. These costs can undo the good of having the rewards card in the first place. Some even have troublesome rewards reception procedures.

Secured Credit Cards

Secured credit cards are best for those who have experienced financial difficulty before. They usually report to all three credit bureaus and thusly can aid you in fixing a bad credit rating.

You do have to put down a sizeable deposit with an application for most of these cards. It is usually a few hundred dollars. High interest rates and annual fees may also be a part of the deal.

You need to look closely at the specifics so that you know what you are heading into. You do not want to set out to repair your credit rating and accidentally choose a card that will land you in a worse position than when you started.

Student Cards

Student credit cards are obviously for students and especially those students who can manage their money effectively. Students do not typically need prior credit to be approved for these cards. These cards may also include cash back rewards programs or discounts to bookstores which is an ideal benefit for students.

Higher interest rates can often come with these student cards. Because these students may not have any experience in dealing with credit, they may mismanage their credit cards and accumulate a great deal of debt in a very short time.

The key to choosing the right credit card for you is knowing the pros and cons of each and matching the credit card to your personal situation. You cannot just choose a type of credit card though. You need to take each credit card as a separate entity and evaluate it on its unique characteristics so that you are not saddled with a credit card that will work against you.