So many credit cards!  Which is right for me?

Applying for the right credit card can be difficult and burdensome.  With so many credit cards out there picking the right one can be tricky because you want to be sure you will qualify.  Every time you apply for a credit card, your credit report takes a hit.  So while credit cards can have their benefits, they can also have their pitfalls.  Most banks separate their credit cards into different areas to indicate to the borrower that they should only apply for ones that fit their needs and borrower profile.  When choosing a credit card it is important to know and understand exactly where you credit stands.  Do you have problem credit history or great credit history?

Lenders have separated cards into different groups to make it easier and less painful for you the borrower.  There are so many credit cards out there.  Lenders generally break credit cards into the following areas; credit cards for excellent credit, credit cards for fair credit, credit cards for problem credit, student credit cards, business credit cards, and pre-paid credit cards.

Now understanding the difference between excellent, fair, and problem credit cards is fairly easy.  If you have excellent credit you are better off applying for those cards because you will benefit by enjoying a lower interest rate.  Credit cards for problem credit will have higher rates and often times annual fees associated with them.  It is important to know where you stand on your credit report before you decide to go off and apply for a bunch of cards.

Student credit cards are great for college students.  These credit cards often give additional incentives to the students to apply.  These cards are often times borrower's first credit card ever,therefore the way you use this credit card is important because this is the card that will help you establish the most credit.  Banks know that when you are a student your credit history is minimal.  They will look past this when issuing the cards.  They know you will be determined not to default on any payments, as this would affect your credit for years to come.  These credit cards sometimes offer lower rates when you are a student, this is also important for you to watch out for because when you are finished those rates tend to jump!

Business credit cards offer perks and benefits for many small businesses.  These cards are generally used to help get a small or medium sized business to the next level.  These cards come in useful when your business is unable to get a traditional loan because the company is so young. 

Pre-paid cards offer a way for those without credit to enjoy the benefits of purchasing items with a card instead of cash.  If you have minimal credit and cannot qualify for a standard card then getting a prepaid card will allow you luxury to purchase items online or go on a trip without having to carry large amounts of cash.