Credit Cards and Choosing One
Almost everyone over the age of consent has or wants a credit card these days and they are accepted almost everywhere. There are three main kinds of credit card very common in America. The first main sort of credit card is travel and entertainment cards such as American Express or Diners Card. These have to be paid in full at the end of the month and are generous on spending limits.
The second major sort 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 choice 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 kind 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.
Different types of credit cards offer different options. 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 Choose your Credit Card.
Credit cards have become a part of everyday life for most people who live 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 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.
Read the fine 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 suitable for someone of your income level. Furthermore, the fewer credit cards you use, 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 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 involving the transaction. 3] Period of Grace: This is the length of time the card issuer allows you before they begin charging you interest on new purchases. (NB: not all credit card issuers give a grace period).