Almost everyone over the age of consent (18 or 21) has or wants a credit card nowadays and they are accepted in almost every establishment. There are three major kinds of credit card in use in America. The first major sort of credit card is travel and entertainment cards such as American Express or Diners Card. These have to be repaid in full at the end of the month and are liberal on spending limits.
The second major type of credit card is the bank card such as Master Cards, Visa, GM, and Ford cards sponsored mostly by the banks. The bank defines the spending limits, which in bank speak, is known as the credit line and each offers different terms and conditions. Banks offer a selection of payment methods: either pay the balance in full with no interest or pay the minimum or some part of the balance with a finance charge.
The other major type of card is the retail store card, such as Sears, J.C. Penney, Shell or Mobil. These store cards and those from gas companies, widely known as fuel cards, are only taken in specific countries. They usually do not have annual fees. There is a large disparity in the terms and conditions for these cards.
Different kinds of credit cards offer different options. Some are designed for individual consumers, while others are designed in ways that work best for small business needs. To know what kind of credit card fits your needs, you should review a few options.
How to Select your Credit Card.
Credit cards have become a part of everyday life for most people living in the western countries. It’s becoming increasingly impossible to avoid them, especially for business men. So, if it is the first time you are thinking of entering into the world of plastic money, here are some of the basic things you should look out for.
First, compare the interest chargeable by all the credit cards for which you are eligible. While the rate will not remain fixed indefinitely, it’s always advisable for first timers to go for the one charging the lowest rates.
Read the small print carefully, especially on the other charges that may be applied, like late-payment fees, annual fees, and whether there is a grace period which is normally given before the finance charges are applied.
You should decide which spending limit is most appropriate for someone of your income level. Furthermore, the fewer credit cards you use, the better placed you will be to understand your spending pattern.
You ought to compare the features such as the cash back incentives, guarantees, rebates and such like and check whether the card is accepted broadly enough to fit in with your needs.
You will do yourself a favour by familiarizing yourself with the following terms: 1] Annual Percentage Rate: this is the measure of the annual cost of the credit. 2] Finance Charges: these are the total charges involving the transaction. 3] Period of Grace: This is the period the issuer gives you before he starts charging you interest on new purchases. (Note that not all credit cards have a grace period).
If you are considering changing or getting a Credit Card, have a look at the free advice on our web site on using Credit Cards wisely.