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 major kinds of credit card common 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 generous 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 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 an interest.
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 variance in the terms and conditions for these cards.
Different kinds of credit cards offer different options. Some are geared toward individual consumers, while others are designed in ways that work best for small business needs. To know what sort of credit card fits your needs, you should review a few options.
How to Choose your Credit Card.
Credit cards are 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 charged on all the credit cards you are interested in. While the rate may not stay fixed for ever, it’s always better for novices to apply for the one charging the least interest.
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 kick in.
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.
Compare the services and other features such as the cash back incentives, or warranties, rebates and the like. Check whether the card is widely enough accepted to cater for your needs.
You will do yourself a favour by familiarizing yourself with the following terms: 1] Annual Percentage Rate: this is the measure of 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 the issuer gives you before he starts charging you interest on new purchases. (Note that not all credit cards have a grace period).
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