Almost everyone over the age of 18 (or 21) has or wants a credit card these days and they are accepted in almost every establishment. There are three major types of credit card common in America. The first main type of credit card is travel and entertainment cards such as American Express or Diners Card. These have to be paid completely by the end of the month and are liberal on spending limits.
The second major sort of credit card is the bank card such as Master Cards, Visa, GM, and Ford cards distributed 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 the ones from gas companies, which are known as fuel cards, are only accepted in specific countries. They usually do not have annual fees. There is a wide disparity in the terms and conditions for these cards.
The various sorts of credit cards present different options. Some are designed for individual consumers, while others are set up in ways that work best for small business requirements. To know what sort of credit card fits your requirements, you should review a few options.
How to Choose a Credit Card.
Credit cards have become a part of everyday life for most people who live in the west. 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 on all the credit cards for which you are eligible. While the rate will not remain fixed for ever, it’s always advisable for first timers to go for the one charging the lowest rates.
Make sure you read the fine print carefully, especially with regard to the other charges that can 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.
Decide which spending limit is most suitable for a person of your income. 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 requirements.
You will help yourself by acquainting yourself with the following terms: 1] Annual Percentage Rate: this is the yearly cost of the credit. 2] Finance Charges: these are the total charges of the transaction. 3] Period of Grace: This is the period of time the card issuer allows you before they begin charging you interest on new purchases. (NB: not all credit card issuers allow a grace period).
If you are thinking onchanging or applying for a Credit Card, have a look at the free advice on our web site on using Credit Cards wisely. Click here to get your own unique version of this article with free reprint rights.