I'm sure that anyone who has been on the planet for at
least eighteen years, has received an offer to apply for a
credit card. Television advertisements, internet
advertisements, and credit card applications sent through
the mail, are a constant reminder of just how embedded our
society has become with the use of credit. I personally
don't know any adult who doesn't have at least one active
credit card. Not to mention the numerous car loans, home
loans, personal loans, and business loans, that are all
available to consumers. Let's take a look at three
different types of credit cards.
First, let's take a look at the personal credit card.
There are many different companies that offer personal
credit cards. The rates usually range from nine to twenty
percent. Many companies these days, are now offering zero
percent balance transfers. This ranges from the life of
the credit card balance transferred, down to a few months,
or maybe even two years. Many credit card companies will
offer low introductory rates, and then raise the rate after
a certain period of time. What many consumers don't know
about personal credit cards, is that many times, the credit
card company will give a low introductory rate, and then
raise the rate, if a customer's credit score changes. This
is a very common practice, so one must read over the terms
of the personal credit card very carefully.
Second, let's take a look at the small business credit
card. The rates are usually higher than the personal lines
of credit, due to the substantially higher credit limits.
These rates usually range from twelve to twenty-five
percent. The small business credit card also has limits
that are substantially higher than the personal lines of
credit. The limits usually range anywhere from fifty
thousand dollars, up to several hundred thousand dollars.
This type of card also allows for balance transfers, but
makes it substantially more difficult to transfer larger
balances. These cards have a more flexible cash advance
feature, and a less stringent repayment policy. Many small
business cards can allow the business to pay not just
monthly, but also bi-monthly, or even quarterly. This can
be a tremendous advantage to the small business owner, who
usually operates as a sole proprietorship or a partnership.
The credit limits are usually based on the personal credit
scores of the owners and the amount of income that the
business generates yearly, or quarterly.
The third type of credit card that we will take a look at,
is the corporate credit card. These type of credit cards
are extremely difficult to obtain. One of the reasons, is
that the corporation has to establish a long credit
history. This means that the corporation has to take out
loans, credit accounts, and maintain a good credit history
for a longer period of time, unlike individuals or small
businesses. Another reason that it is difficult to get a
corporate credit card, is that the corporation has to have
a substantial amount of assets, and be profitable for
anywhere from two to five years, before applying for the
line of credit.
The limits on corporate credit accounts are anywhere from
fifty thousand dollars to the infinite millions of dollars.
As the corporation expands, the credit card company will
usually raise the limits. This type of card also allows
for balance transfers, but makes it substantially more
difficult to transfer larger balances. The repayment terms
are very similar to the small business credit card account
holder. The payments aren't necessarily monthly, but may
be bi-monthly and sometimes quarterly. The interest rates
can be substantially higher than the small business, or
personal lines of credit, but this is due to the high
credit limits. The interest rates range anywhere from
twelve to twenty-nine percent. Some credit card companies
have even been known to charge flat rates on credit lines
to corporations. This usually occurs when a very large
corporation wants to borrow a substantial amount of money
against its line of credit.
So there you have it. Personal credit cards usually have
lower limits and lower interest rates, and are paid
monthly. This is in contrast to small business and
corporate cards, which usually have higher limits with
higher interest rates, and can be payed bi-monthly or even
quarterly.
----------------------------------------------------
Bryan Pringle, Ph.D., has written many articles on the
credit industry, and is the webmaster of websites offering
news and information regarding credit cards. For more
information, please visit:
http://www.apply-forcreditcards-online.com
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