credit cards

Know the types of credit cards and their Features

The use of credit cards increases every year, positioning this type of financial product as one of the most common payment methods in the country. That is why it is very important that you know everything related to them, so that you can use that learning as a tool in your favor and get the most out of your credit card.

credit cards

What types of credit cards are there?

If the use of credit cards grows every year, the number of options offered increases and they are as varied as the customers who use them. However, as you can imagine, the same client can have different cards, so choosing a card has become a task that requires good analysis.

  • The four according to the color of the plastic:the Classic, the Gold, the Platinum and the Premium
  • The low-cost ones:No Annual Fees, No Fees, Low Rate, Balance Transfer and Service Cards
  • The cards that offer Rewards:Those of traveler miles and those of points
  • College cardsand cards that offer exemptions to those who cannot prove income

 

The differences between the types of cards according to the color of the plastic are given by the hierarchy of the product. For example, the Classics are the most basic offered to people with low income levels. Gold cards are for those customers with higher income levels and are focused on giving rewards. The Platinum seeks to provide rewards and services to attract customers with high income levels. Finally, the Premium cards are for the most exclusive clients with services superior to all the others.

Low-cost credit cards are those that seek to attract customers who want to pay less interest and commissions, even if they have to sacrifice the benefits. These plastics offer what their name indicates: zero annuity, without commissions or low rates. It is common to find, together with these products, those that are aimed exclusively at university students or those that contemplate a line of credit with process exemptions.

Finally, rewards credit cards  are those that give specific additional benefits, such as traveler miles or points that can be exchanged for products at participating merchants.

What are the main credit card details?

Credit card data follows certain logics. On the one hand, there is the data that is related to the security of the line of credit and the others are those that identify the products.

Among those of identification are the name of the holder, the expiration date, the bank or the issuing entity and the company that makes the acceptance possible. The security data is the magnetic strip that, like the chip, contains the receipt of the credit line information, the card number, the signature and the CVV.

Before, it was very common for the card information to be on the magnetic stripe, but for security reasons the infrastructure has changed to the chip, as it is safer. The cards still have the magnetic stripe in case the customer needs to use a terminal that does not have the latest technology or the chip is damaged.

The card number is not a random one. It is a globally unique number made up of 16 digits. The number follows the ISO standard (for its acronym in English) they are separated by groups of four numbers and each group gives information related to that particular line of credit.

The signature is to demonstrate the consent of the holder and the CVV is data that is required in online purchases as a validation method that the card is physically held at the time of purchase.

How is interest calculated on credit cards?

Finally, it only remains to tell you how the interest on credit cards is calculated since this can help you. It’s very simple, you just have to have the average monthly balance indicated on  your account statement , multiply it by the monthly interest rate expressed as a percentage associated with that card and add the result to the initial amount.

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