Types Of Credit Cards And Choosing One
April 9th, 2010 by Bob JonesAlmost 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 sorts of credit card in use 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 completely by 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 sponsored 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 choice 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 issued by gas companies, which are usually known as fuel cards, are only accepted in specific countries. They usually do not carry annual fees. There is a large disparity 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 a Credit Card.
Credit cards are 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 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 charged on all the credit cards you are interested in. While the rate will not remain fixed indefinitely, it's always best for beginners to go for the one charging the lowest rates.
Make sure you read the fine print carefully, especially on 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 what spending limit is most appropriate for a person of your income. Also the fewer credit cards you have, the better placed you are to track your spending.
You ought to compare the services such as the cash back incentives, guarantees, rebates and the like and check whether the card is taken broadly enough to fit in with your needs.
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 of the transaction. 3] Period of Grace: This is the period of time the card issuer allows you before they commence charging you interest on your purchases. (Not all credit card issuers offer a grace period).
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