People know of the existence of credit cards. They know how to use these, and how it functions. They also know that there are different kinds of credit cards (and accompanying rewards programs) which can suit the lifestyle of any consumer. People think they know everything about credit cards. But they don’t.

Very few people are aware that there are two different kinds of credit cards, and these are not visas and mastercards. The two types of credit cards are the secured and the regular (or unsecured) credit cards.

Secured credit cards are those wherein the card and the credit limit that is assigned to you is based on the amount of money you have deposited into the savings or deposit account of the card-issuing institution. The credit line given is traditionally between 100 – 200% of the money he has deposited.

Like regular credit cards, the cardholder must pay for whatever purchases he makes. In cases of default payments, the issuer may recover the cost of the items purchased by paying the merchant using the money that has been deposited. This, however, is not done when the card holder misses one or two payments. This is only done as a last recourse, when the account holder requests that the account be closed, or when the account is deemed delinquent.

Secured credit cards are options for those who cannot secure a regular credit card due to their poor credit ratings (or lack of it thereof) as these cards are great ways for you to rebuild your credit history. It is also ideal for those who need to always be within budget. There is no need to worry about universal acceptance. These secured credit cards usually carry either the Visa (and) or the MasterCard logo, thus, these cards will be honored in places that recognize Visa and MasterCard.

Regular credit cards are those that are issued to people, even if they do not have an account in the card issuing establishment. The credit limit that will be given would depend largely on the applicant’s income and his credit rating. Credit limits are usually higher and sometimes, card holders of regular credit cards enjoy more perks, which normally come in the form or rewards programs or bigger rebates, than those holding secured lines of credit.

Apart from these, secured credit cards and regular cards vary in terms of their fees. Regular credit cards just charge an annual fee and may even waive the application fee and the annual fee for the first year for newly approved applicants. This does not necessarily hold true for secured credit cards. Those interested to own a secured credit card are usually asked to pay the application fee and the annual fee upfront (apart from the monetary deposit).

Both kinds of credit cards have their own pros and cons and the choice as to which card would be best for you would depend mostly on your needs and your preferences. Choose the service that best matches your lifestyle. Don’t feel intimated if you hold a secured credit card and your colleagues all carry the regular card. It’s all just labels. What matters is that you are able to use the credit card and that you are completely satisfied with the services they provide. Everything else is insignificant.