There are many variations when it comes to those little plastic cards. The common feature is the convenience they provide. But are you aware of the unique differences? Understanding how different cards work will help you use them smarter.

VISA and MasterCard - What comes to mind when you think of a credit card? If you're like most people, you probably think about VISA or MasterCard. If you carry one of these cards, you can charge goods or services anywhere the VISA or MasterCard logo is displayed.

But did you know that your credit card was not issued directly from the VISA or MasterCard company? VISA and MasterCard credit cards, also known as bankcards, are issued by financial institutions and banks that are affiliated with these organizations. VISA and MasterCard are actually organizations that provide credit authorization systems, processing services, and operating guidelines to the issuing financial institutions or banks.

Credit cards are issued to you based on your income and information on your credit report. When you use a credit card, you're borrowing money against a line of credit. You pay it back with interest each month if you haven't paid the balance in full by the payment due date. If you do pay your balance in full before the grace period expires(usually about 25 days) you won't be charged interest. Issuing banks want to be sure you have the ability to pay back the money you borrow. Depending on your situation, you may be eligible for:

• Standard card - This is the basic credit card. It generally has a credit limit of $1,000 to $3,000.
• Gold card - This card usually offers a credit limit of $5,000 or more. The income requirement, generally a minimum of $35,000, is higher than for a Standard card. Gold cards also offer perks or incentives to cardholders, such as emergency medical services while traveling and extended warranties on purchased items.

Platinum and Titanium cards are also available; each with increasing credit limits and incentives.

• Affinity card - This type of credit card is offered by a bank and another sponsoring organization, often a charity group or other non-profit. The sponsor's name or logo is often placed on the card. The bank typically gives a portion of your annual fee and purchases to the sponsor. An example of an affinity card is one that lists your college or perhaps AARP (American Association of Retired Persons) as a sponsor. You may be entitled to discounts or special deals from the sponsoring organization.
• Co-branded card - Similar to an Affinity card, this type of credit card is offered jointly by a bank and a retail organization. The names and logos of both companies are displayed on the card. Typically, you receive points or rebates based on your spending levels. The points or rebates are redeemable for specific goods or services, such as frequent flier miles, meals at restaurants, Internet banking fees, and electronics, to name a few. It's not uncommon for the points or rebates to have an expiration date. Make sure the card you choose meets your needs. You should evaluate not only the terms, but the incentives as well. Discover card is a good example of a rebate card. In fact the cash back program is a very attractive feature of this well-known credit card.

Charge card - Is a credit card the same thing as a charge card? Not necessarily. A charge card, like American Express and Diner's Club, is generally used for purchases during a single billing cycle. It doesn't offer you a revolving line of credit, so you can't carry a balance.

Debit card - Your debit card may have a VISA or MasterCard logo, but that doesn't mean it's a credit card. A debit card is linked directly to your checking or savings account. Money is withdrawn from your account when you make a purchase, so it's more like a check than a credit card. Types of debit cards include:

• Online debit card - With this type of card, money is deducted from your account immediately. It works like an ATM card, so you'll need a PIN (personal identification number).
• Offline debit card - This card can be used like a VISA or MasterCard anywhere bankcards are accepted. The money isn't deducted from your account immediately; it usually takes 2 - 3 days. No PIN is necessary, but you'll have to sign a receipt.

Private label card - This is just a fancy way of referring to a department store card or gas company card. Retailers such as JC Penney's, Sears, and Exxon issue this type of card for use at their locations.

There are many ways for banks and retailers to offer you credit. This article has focused on unsecured credit cards. Depending on your current situation, however, a secured credit card may better suit your circumstances. To learn more about secured credit cards, read our related article on secured credit cards or search the Library for other credit related articles.