A credit card allows you to live now and pay later. When you successfully apply for a credit card, you will be advised of your credit limit. Ensure you stay within it, as exceeding it could result in either your card taken away from you or being charged interest on extra credit you incur.

Charge Card

This is very similar to a credit card, although monthly balance must be paid in full. An example of a type of charge card would be an "American Express" card.

Cheque guarantee card

If you're paying for goods or services with a cheque, you'll probably be asked for a cheque guarantee card. This means bank will normally pay your cheque up to amount guaranteed.

Store Card

A restricted form of credit, store cards act as credit cards in those shops that card is accepted. Purchases are made using card, and then a consolidated bill is sent at month's end, which is then settled in a manner similar to a credit card.

Deciding which plastic card to use can be confusing but it can help you to reach a decision if you know what you want to use card for.

If you just need it as a substitute for carrying cash, rather than use a credit card, you may as well use a debit card, which takes money from your bank account directly.

If you like to pay your balance off each month, a charge card might suit you.

If you want to pay off your debt in instalments, choose a credit card.

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Auto loans can be seen as riskiest of loans from lender's point of view. This is because an auto loan is for an asset that depreciates very quickly. Thus you will find that auto loans have generally a higher rate of interest than any other type of loan.

One of advantages of getting an auto loan is that when you get it before you go to dealer, you can negotiate as a cash buyer. Often you will save money when you negotiate from a cash buying position.

The main disadvantage of an auto loan is that, like any other loan, it must be paid back. Before you get a loan, make sure you are capable of making monthly payments. You can seriously damage your credit if you default on an auto loan.

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