Types of Credit Cards and Choosing One
Almost everyone over the age of consent (18 or 21) has or wants a credit card nowadays and they are accepted 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 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 mostly 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 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 those issued by gas companies, which are usually known as fuel cards, are only accepted in some countries. They hardly ever have annual charges. There is a large disparity in the terms and conditions for these cards.
The various kinds of credit cards present 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 look over a few options.
How to Choose a Credit Card.
Credit cards are a part of everyday life 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 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 can 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. Also the fewer credit cards you have, the better placed you are to track your spending.
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 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 begin charging you interest on your purchases. (Not all credit card issuers offer a grace period).