Two basic types of credit are secured and unsecured. Secured credit means that the product you purchased, such as a car, appliance or furniture, serves as collateral to guarantee the debt. If you do not make a payment, the creditor can legally take possession of the product. Unsecured credit is based on your promise and signature to repay the debt without committing your savings or other collateral as a guarantee. Credit cards can be either secured or unsecured.
Most credit cards are unsecured.
They are usually not available to students because they are used by businesses and consumers for travel and entertainment expenses and have an annual fee. Bank cards, such as MasterCard, Visa, Discover and Optima. These credit cards are sponsored by individual banks and are considered all purpose cards since they can be used to pay for a variety of goods and services. Each bank decides credit limits, annual fees, terms and conditions. Company or Retail Store cards, such as Sears, J.C. Penney, Shell or Mobil.