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When you apply for a credit card, you’ll want to take many factors into consideration. They include types of credit cards, limits, rewards, finance charges and fees and interest rate.

Credit Card Types

There are many different kinds of credit cards. They can range from a general purpose credit card like a Visa which can almost anywhere to a retail card like Sears which can just be used in stores affiliated with that brand.

Credit cards can be obtained with a revolving limit (where you can carry over the balance by making payments each month) or where you have to pay the balance off each month.

Following are the five types of credit cards you can apply for:

Secured Credit Cards: These tend get be used by individuals with poor or insufficient credit. Collateral, usually in the form of a pre-paid amount, has to be provided by the user.

(Other collateral can be cash, jewelry or property owned by the borrower)

If the payments aren’t made, the collateral is accessed and collected for the amount of the missed payment. The credit limit is usually very low on these cards.

Retailer Credit Cards: These are offered by retailers. They include cards for fuel oil providers like Shell or Mobil. Others include establishments like Best Buy, Sears, J.C. Penney’s, Nordstrom, Macy’s etc.

Membership Cards- American Express and Diners Club are examples of this type of card. You’re a member of their card system. You usually have to pay off the balance every month. However, depending on your situation, you can usually make some purchases as revolving balances.

General Credit Cards- These include Visa and MasterCard. General use means there are few or no restriction for where they can be used.

Premium Cards- Often, premium credit cards are called platinum, gold, silver, etc. They come with a higher limit. They usually offer other services like identity theft protection, travel insurance, rental car insurance, product warranties and emergency services.

There are other factors that may influence you decision on which credit card to apply for.

Cards with Rewards Programs

Many cards have come with reward programs. This allows the card holder to reap a reward tied into on-time payments and frequency of use. There are three main types of these programs:

• Rewards Points- This is where credit card companies allow their best customers to accumulate rewards points. The points are them redeemed for a selection of items offered by the company.  The items come in a print or online catalog. For example; once you have 1000 points, you might be able to redeem them for a $25 gift card for a restaurant, a pen and pencil set or a clock.

The gifts can become quite substantial as you accumulate points.

• Cash Back- Credit card companies who offer this reward give their customers cash back depending on what they’ve paid off and what they spent on the card

• Airline Miles- Again, depending on how often the card is used, your payment history and what the balance situation is, miles are provided to use to purchase plane tickets. This might even work as an enticement to get a card. For example; if you apply for and receive a card with a $10,000 limit, it might come with 500 airline miles.

Other Credit Card Tips

Following are some other credit card characteristics you will want to factor into your decision:

• Pay off Existing Balances- You can transfer a card balance with a higher interest rate to one with a lower or no interest rate (usually for an introductory period). If you pay the balance off during that time period, you will save money on that interest.

• Cash Advances- Most general use cards will allow cash advances up to a limited amount. Advances are usually subject to a higher interest rate.

• Annual Percentage Rate (APR)- This is the interest rate you will pay on outstanding balances. You obviously want to select the lowest one possible.

• Finance Charges and Fees- When you use a card, you’ll be subject to these charges. They include an over- the-limit fee, a charge for having the card, cash advance fees, late payment fees and other charges.

• Credit Limits- Select a limit that fits your situation. To high of a limit could impact your total finances if you spend too much and too low of one will not be worth the interest and fees you’ll pay on it

So, apply for credit cards prudently. The due diligence you perform now, could save you money later.