Revolvers and Transactors: Two Basic Cardholder Types

09/26/2008
Choosing Credit Card

All people are individuals. We are all equal, but every person has a unique personality, way of thinking and habits. We even have different schemes of managing credit cards. Psychologists single out several types of financial personalities, credit experts divide credit consumers into two big categories: "revolvers" and "transactors".

These two opposite groups have different spending habits. They use plastics in different ways, so they will not equally benefit from the same card deal. Learn what traits are characteristic of these consumer spending categories and find out what type of cardholders you belong to. This will really help you when you decide to choose a new credit card.

There are no definitions for "revolvers" and "transactors" in scientific terminology. But actually it is pretty easy to understand what hides behind these notions. Just think about the two main functions credit cards fulfill. Plastics are designed for you to borrow money and pay them back later.

Revolvers are credit consumers that tend to borrow money and pay off their debts making credit card minimum payments. This type of cardholders is also called borrowers. The borrowing option that plastics give is prior to them. Transactors prefer to pay down their balances within the shortest possible time.

Determining what type of plastic card user you are is easy. Just take a look at your past few credit card statements. Compare the amount of money you borrow and pay back. If your accounts tend to accumulate debts - you are a revolver. In case your balances reduce in leaps and bounds, your credit score goes up, congratulations! You are a transactor.

Transactors, as a rule, have good or excellent credit score. They try to pay off their balances in full every month. This way transactors save on interest and leave lenders' bread without butter. Low interest cards are not the most beneficial deal this type of cardholders can make. Financial experts' advice transactors to apply online or at the bank for rewards plastics. These deals will help frugal card owners make the most of their plastics.

Rewards cards usually come with higher interest rate, it is true. But since transactors are prone to pay off their balance in full every month, they do not accrue any additional interest. Instead they can get extra perks and benefits. Whether it is a miles rewards card, hotel, points, cash back or gasoline rewards card, transactors will take advantage of it.

Revolvers are less reasonable in their expenses, most of them spend more plastic money and carry balance from month to month. But there is a positive side bout being a revolver. They restrict themselves less in making all sorts of purchases, they enjoy life and do not bother to pay down balance in full every month. Besides, credit companies love revolvers. This customer category is their daily bread and milk. It is revolvers who accumulate debts and pay lenders more due to the accrued extra interest.

Revolvers will get maximum benefit from low rate cards. These deals will reduce your interest charges and save your money. Balance transfer cards are also a good option for revolvers who decided it is time to wave a farewell to credit debt.

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