Almost everyone over the age of 18 (or 21) has or wants a credit card these days and they are taken in almost every establishment. There are three major sorts of credit card in use 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 repaid 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 Visa, Master Cards, GM, and Ford cards distributed mainly by the banks. The bank defines the spending limit, which in bank speak, is known as the credit line and each bank offers different terms and conditions. Banks offer a selection of payment means: you may either pay the balance in full with no interest charges or pay the minimum or some part of the balance with a finance charge.
The other major sort 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 carry annual charges. There is a wide disparity in the terms and conditions for these cards.
The various 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 type of credit card fits your needs, you should review a few options.
How to Choose a Credit Card.
Credit cards are a part of everyday living for most people living in the west. It’s becoming increasingly impossible to avoid them, especially for business men. So, if this is the first time you are about to enter into the realm of credit cards, here are some of the basics you ought to look out for.
First, compare the interest charged by all the credit cards you are interested in. While the rate may not stay fixed for ever, it’s always best for novices to apply for the one charging the least interest.
Make sure you read the small print carefully, especially regarding the other charges that can be made, like late-payment fees, annual fees, and whether there is a grace period.
Decide what spending limit is most appropriate for a person of your income. Furthermore, the fewer credit cards you have, the better placed you will be to understand your spending pattern.
You should compare the services and other features such as the cash back incentives, or warranties, rebates and such like and check whether the card is accepted widely enough to suit your requirements.
You will help yourself by acquainting 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 of the transaction. 3] Period of Grace: This is the period of time the card issuer gives you before they commence charging you interest on new purchases. (NB: not all credit card issuers give a grace period).
