Credit Cards and Choosing One
Almost everyone over the age of consent has or wants a credit card these days and they are accepted in almost every establishment. There are three major sorts of credit card common in America. The first major type 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 mostly 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 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 an interest.
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 taken in specific countries. They hardly ever have annual charges. There is a wide disparity in the terms and conditions for these cards.
The various kinds of credit cards present different opportunities. Some are geared toward individual consumers, while others are designed in ways that work best for small business requirements. To know what type of credit card fits your needs, you should review a few options.
How to Choose a 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 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 may not remain fixed indefinitely, it’s always better 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 made, like late-payment fees, annual fees, and whether there is a grace period.
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 such like. Check whether the card is widely enough accepted to cater for your needs.
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 gives you before they commence charging you interest on new purchases. (NB: not all credit card issuers give a grace period).