There are 5 Credit Card Types, image from Mortgagefit.comAccording to Mortgagefit.com administrator’s blog, there are 5 credit card types. The image to the left illustrates them. They include:
5. co-branded credit
4. store credit
3. charge credit
2. general credit
1. secured credit
In addition, the following describes what they are. This is also according to their blog administrator. Keep in mind that the blog post is from 2011.
There are five types of credit cards according to Mortgagefit.com
5 TYPES OF CREDIT CARDS REDUCED TO THEIR ESSENTIAL 2 PLUS
In my opinion, the administrator’s blog post uses generic definitions. By today’s standards, they are not technical or simple. In addition, the post is dated. As a result, it is not exactly accurate by today’s standards. Therefore, I have attempted to clarify the types of credit cards that exist. In my blog post series written about credit cards, these are the types of credit cards:
1. network
2. co-branded
3. secured and unsecured
In my blog post, Different Types of Credit Cards And Their Best Uses, Part One – July 2019, network and co-branded are explained. Part Two in that series reviews network and co-branded cards as well as explores secure versus unsecured cards. To compare accurately, I want to explain each type individually, mine versus the Mortgagefit.com definitions.
#5.Co-branded
There is some agreement of terms between mine and Mortgagefit.com. #5.co-branded: #Co-branded credit cards: These cards are the same as general credit cards. But these cards have a “special relationship” with a particular organization or retailer. So, if you purchase goods/items from those particular organization or retailers, then you will be able to extra rewards and benefits. However, these cards can be used in other stores as well. A good example of such a card is Amazon.com credit card.”
#1.Secured Cards
“People who have a bad credit history or no credit history at all can take help of these secured cards. These secured cards are similar to that of general credit cards. However, in case of these cards, you must make a fully refundable deposit, either by cash or by sending a check. This deposited amount is considered as your credit line. As a result of this deposit, all the secured cards offer guaranteed approval.” This standard seems to work about the same today. So this card’s name and description are still solid. Here’s one card in both blog post comparisons.
But I find #4.store credit, #3.charge credit, and #2.general credit somewhat confusing. Therefore, I wish to simplify them to be more accurate by today’s standards. Otherwise, they should be eliminated.
#4.store credit, #3.charge credit, and #2.general credit
“General Credit Cards: A very common type of credit card is the general credit cards. Such credit cards don’t require any kind of security deposit and can be used in most stores/shopping malls or to make any kind of purchases.” This seems to describe both network and co-branded cards.
#Charge Cards: These cards are very similar to general credit cards. However, the major difference lies in that fact that unlike general credit cards, you will have to pay your total balance in full every month.” What does this remind you of by today’s standards? The only one, in my opinion, is what is called a store credit card. I find them to be minor players in the credit card count either way. I still find them confusing.
#Store Cards: These cards are similar to that of credit cards. However, these cards can only be used to buy goods at the store that has given you the card. Macy’s Credit Card is a good example of a store card.” These sound like store cards that are not backed by any banks. Therefore, I would combine charge cards and store cards into one kind of credit card. That reduces the number to four kinds of kinds from 5. In addition, I am still confused by charge cards today. I have about five of them. The only reason I got them is for the 5% discount when I charge merchandise in their stores.
CONCLUSION: A FINAL TALLY
What then is really the number of types of credit cards? Let’s look at each category.
1. Secured cards are definitely relevant today especially with people starting out to establish credit. But since they are offered by large banks, and can be upgraded, I do not give them their own category. Total of 0.
2. Somewhere in-store card, charge card, and a general credit card are what we call, the network and co-branding cards. They are unsecured cards and do not need their own category. Total of 2.
3. Charge cards are fazing out overshadowed by the above cards. In my opinion, they rate a total of 0.
WHAT DO YOU THINK? Please go to the comment box and share your thoughts with the world
COMMENTS AND QUESTIONS
This is only a SAMPLE of the comment box that can be found and filled in at the bottom of this page as well as each blog post page.
Readers are welcome to comment on this blog post by scrolling down to the VERY bottom of the page. That is where you will find the comment form where the words ‘start the discussion’ are. Questions are also welcome. But it is best to contact me for Q&A on The Credit Card Maven Facebook Page.
In Part Two, I explore two areas of focus in Credit Card differences. They are network versus co-branded credit cards in addition to secured versus unsecured credit cards.
THE FIRST FOCUS AREA OF CREDIT CARD DIFFERENCES: NETWORK VERSUS CO-BRANDED CARDS
I will answer Credit Card differences in Part Two of Different Types of CreditCards and Their Best Uses. The first question I will answer is, ‘Why get network cards’? Then, ‘Why get store co-branded cards’? And finally, ‘What is the difference’?
NETWORK CREDIT CARDS
Referring back to Part One, it was explained that there are four types of major network credit cards, AMERICAN EXPRESS, DISCOVER, VISA, and MASTERCARD. Purchases can be charged just about anywhere with these cards. But there are no interest-free payment plans available.
There are four major credit card types or networks: American Express, Discover Cards, VISA, and MasterCard. Image from Cardrates.com
COBRANDED CREDIT CARDS
In contrast, co-branded credit cards offer interest-free payment plans. This is what makes them an essential part of credit card differences. The banks that these cards cobrand with are rarely major banks. That is because their primary purpose is cobranding not checking, savings, etc.
Co-branded credit cards from The EXtravel.comHere is an example of special interest free financing with Shop Your Way (Sears/Kmart) cobranded by Citibank
CONCLUSION TO NETWORK VERSUS COBRANDED CREDIT CARDS
Thus a prudent mix of both types of cards is the optimal way to benefiting from credit card differences, the best percentages of cash rewards available combined with interest-free, overtime purchase payments. The blog post A Two-Pronged Credit Card Rating System (Part 2 – June 2019) reviews the reason to get a straight flush scenario with the major network cards.
A straight flush compared to a winning hand of cash reward cards. Image from Dreamline.
THE SECOND FOCUS AREA IN CREDIT CARDS: SECURED VERSUS UNSECURED CARDS
The above questions about network versus cobranded cards will be followed by an explanation of the difference between secured versus unsecured credit cards. On top of that, information about more cobranding banks that were mentioned in the last post will be discussed. Links will be provided in the SOURCES & RESOURCES area, as well.
Quoted from 5 Types of Credit Cards, “People who have a bad credit history or no credit history at all can take help of these secured cards. These secured cards are similar to that of general credit cards. However, in case of these cards, you must make a fully refundable deposit, either by cash or by sending a check. This deposited amount is considered as your credit line. As a result of this deposit, all the secured cards offer guaranteed approval.”
Quoted from the ‘General Credit Cards’ section from the same post, “General Credit Cards: A very common type of credit card is the general credit card. Such credit cards don’t require any kind of security deposit and can be used in most stores/shopping malls or to make any kind of purchases.” This definition would include what we call an unsecured, network credit card or co-branded card.
IN CONCLUSION
As stated earlier, there are really only two kinds of cashback credit cards, network and cobranded. In fact, the secured or unsecured featured is really just a qualification. But it is not its own category as the post 5 Different Types of Credit Cards states.
COMMENTS AND QUESTIONS
This is only a SAMPLE of the comment box that can be found and filled in at the bottom of this page as well as each blog post page.
Readers are welcome to comment on this blog post by scrolling down to the VERY bottom of the page. That is where you will find the comment form with the words ‘start the discussion’. Questions are also welcome. But it is best to contact me for Q&A on The Credit Card Maven Facebook Page.
