Credit cards have become more popular than ever. They can be used to pay for goods or services conveniently and comfortably without cash. Money can also be withdrawn from ATMs with a credit card. There is a wide variety of different types of credit cards. There are different offers at different conditions, so that every need and requirement is covered.

Therefore, it is important to inform yourself in detail before signing a contract to find the right offer. Below is a credit card comparison - what types are there and how do they work?

Advantages of credit cards?

It's hard to imagine traveling without a credit card. There is no need to exchange money and in many countries, such as America, the credit card is indispensable. Cash withdrawals are possible with a credit card at home and abroad. However, the costs incurred should be taken into account. These vary depending on the credit card company, sometimes considerably. The same applies to the annual basic fee, which most credit institutions charge. This can also vary in amount. Online payment with the credit card is also advantageous. It is always important that it is not lost. If it is stolen, for example, purchases can be made with it.

What credit cards are there?

The cards are primarily differentiated according to the functions, the way billing and payment is made, but also according to practical additional services and options they offer. To understand how credit cards work, it is necessary to look closely at the different types.

In addition to the classic credit cards such as Visa, Mastercard or American Express with flexible conditions, there are, for example, charge cards without an installment payment. With these credit cards, an invoice is issued once a month. Now follows the clear credit card comparison - what types are there and how do they work?

Classic credit card

With a traditional credit card, for example, American Express, Visa and Mastercard, which is usually issued by any bank or special credit card companies, the owner is granted credit. The credit limit is calculated according to income or agreed individually.

Purchases can be made with the card within this limit and the amount due is charged to the account only after a few weeks. Once a month, usually at the end of the month, a detailed statement is issued. Then the cardholder can see what expenses he has incurred. The amount due is paid in one lump sum. Depending on the agreement, however, monthly installments are also possible.

The normal credit card is only issued to creditworthy and solvent persons. To check this, a Schufa report is obtained when the application is made. The annual fee depends on what the particular card does or what additional services it offers. Credit cards are classified according to different basic cards as well as the following categories:

• Classic
• Gold
• Platinum

These scales offer individual services such as bonus miles, VIP lounge at the airport, golf card and much more.

Prepaid credit card

Another type of credit card is the prepaid credit card. Here there are no weekly limits. The holder loads the money on the card and can use it for purchases afterwards. This is the difference with the ordinary credit card. The credit card can be used like an ordinary credit card. It is also possible to use it to withdraw cash at home and abroad, as well as to make cashless payments on the Internet, in stores, restaurants, etc.

The prepaid credit card is therefore a credit card on a balance basis. No Schufa information is obtained for approval. This type of credit card offers protection to the banks on the one hand, but also to the credit card holder. The latter is protected from debt, because the card can only be used as long as there is sufficient credit on it. An annual fee is usually charged for use, which varies depending on the credit institution.

Debit card

Debit cards have also become indispensable for cashless payments and ATM withdrawals. "Debit" comes from the English and means debit, debit note or debit. Every transaction made with the debit card is debited promptly from the cardholder's checking account. Thus, there is no monthly billing, as is the case with the conventional credit card. No credit line is provided either. The cardholder can therefore only dispose of the amount of money that is available as credit on the account. The debit card can therefore also be regarded as a type of EC card.

Charge credit card

The charge credit card is characterized by the fixed monthly bill. Here, within a fixed limit credit is granted for purchases and bookings a kind of credit. No debit interest is charged for the payments. Only the amount billed to the paying agent is collected by the bank. However, unlike the classic credit cards, it is not possible to repay the invoice amount in installments. It must be paid at the end of the month or quarter. The corresponding debit is made from the cardholder's checking account.

This avoids possible over-indebtedness, as the credit card account is balanced month after month. Here, too, attention should be paid to the fees. In some cases, account management is free of charge. Charge credit cards offer Mastercard and Visa. The credit is dependent on the balance. The credit limit is agreed in advance with the issuing bank. The monthly income of the applicant plays a decisive role here.

Pay attention to the credit card fees

When choosing a suitable credit card, the fees are always a very important criterion. These include not only the interest that accrues when the credit line is used. There may be other costs as well. These include, for example, the annual fee, fees incurred for using the credit card abroad, for cash withdrawals or for topping up a prepaid credit card. Other possible costs include a foreign currency fee when paying or withdrawing money in other currencies. It is therefore essential to compare offers carefully before signing a contract. A credit card comparison is possible on the Internet easily, quickly, free of charge and without obligation.

Conclusion on credit cards

Payment by credit card is becoming more and more popular all over the world. It is a convenient and good way to make cashless payments. The cards can be purchased through banks or directly through credit card institutions. Which one is the most suitable, everyone has to decide for himself based on his usage behavior and creditworthiness. This article could certainly provide a good decision-making aid. When choosing a credit card, it is always important to pay attention to the interest rates and fees that apply, as these can vary considerably depending on the bank and credit institution. A careful comparison of the providers is indispensable here.