Sorts of Credit Cards and Selecting One
October 18th, 2009 by Owen Jones, under Travel and Leisure. No Comments
Almost everyone over the age of consent (18 or 21) has or wants a credit card nowadays and they are taken in almost every establishment. There are three main sorts of credit card common in America. The first major kind of credit card is travel and entertainment cards such as American Express or Diners Card. These have to be paid completely at the end of the month and are liberal on spending limits.
The second major kind 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 parlance, 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 accepted in specific countries. They usually do not carry annual charges. There is a large variance in the terms and conditions for these cards.
Different sorts of credit cards offer different options. Some are geared toward individual consumers, while others are set up in ways that work best for small business needs. To know what type 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 this 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 charged on all the credit cards you are interested in. While the rate will not stay fixed for ever, it’s always best for novices to apply for the one charging the least interest.
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 kick in.
You should decide which spending limit is most appropriate for someone on your income level. Furthermore, the fewer credit cards you have, the better placed you will be to track your spending pattern.
You should compare the services and other features such as the cash back incentives, or warranties, rebates and the like and check whether the card is accepted widely enough to suit your requirements.
You should acquaint yourself with the following terms: 1] Annual Percentage Rate: this is the annual cost of the credit. 2] Finance Charges: these are the total charges involving the transaction. 3] Period of Grace: This is the length of time the card issuer gives you before they commence charging you interest on your purchases. (Not all credit card issuers allow a grace period).
If you are thinking aboutchanging or applying for a Credit Card, check out the free advice on our web site about using Credit Cards wisely.
