Sorts of Credit Cards and Selecting One
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 in use in America. The first main kind 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 type 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 parlance, is known as the credit line and each bank offers different terms and conditions. Banks offer a selection of payment methods: you can either repay 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 those issued by gas companies, which are usually known as fuel cards, are only accepted in specific countries. They usually do not have annual charges. There is a large disparity in the terms and conditions for these cards.
The various kinds of credit cards offer different opportunities. Some are designed for 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 requirements, you should look over a few options.
How to Select a Credit Card.
Credit cards have become a part of life for most people living in the west. It’s becoming increasingly impossible to avoid them, especially for business men. So, if it is the first time you are seeking to enter 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 may not remain fixed for ever, it’s always best for beginners to go for the one charging the least interest.
Make sure you study the small print carefully, especially regarding 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 what spending limit is most suitable for someone of 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 such like and check whether the card is accepted widely enough to suit your needs.
You should acquaint 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 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).
