There are – generally speaking – two different credit card types. The most desirable and most common of the credit card types is the unsecured credit card, while the somewhat less desirable kind is the secured card. Within these two classifications there are a whole host of other subcategories. For example, within the unsecured category there are the charge cards, merchant account cards, as well as the commonly known and used credit cards. Within the realm of the secured variety fall gift charge cards, gift cards in general, and to a lesser extent debit cards as well as charge cards that display the Visa or MasterCard logo.

Credit card types that are offered to consumers are based on the consumer’s perceived credit worthiness. Thus, and individual with a high credit rating will almost always qualify for a credit card, while a consumer with a less than good credit rating may have to use a secured card so as to build up her or his credit and evidence a good credit history that may then be considered when the consumer once again seeks to apply for other credit card types.

The unsecured credit card is more or less a calculated risk a bank will take on you. The bank will permit you to charge up to and including a certain dollar amount against your account, in return for which you promise to pay not only the money you charged but also the interest that will accumulate on the account. Failure to adhere to the unsecured credit card agreement will cause the customer’s credit rating to suffer, may result in the raising of the interest rates and accumulation of late fees and fines, as well as the subsequent cancellation of the card altogether.

For those who find themselves in financial hot water, the second of the credit card types is oftentimes their only means of carrying a card at all. A secured credit card is directly tied to an account that you must fund before you may use the card to charge. It is important to understand that this kind of card does not operate like a debit card, except that it can help you to re-establish your good credit in the process. Since your credit is impaired, banks will be hesitant to take a risk on your, but will permit you to keep money in a special account against which they can draw, should you decide not to pay off your purchases. While the money will remain untouched and provide safety to the bank, they will still charge you a number of fees simply for permitting you to use a credit card from their bank.