Nearly everyone over the age of consent (18 or 21) has or wants a credit card nowadays and they are taken in nearly every establishment. There are three major sorts of credit card common 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 liberal on spending limits.
The second major sort of credit card is the bank card such as Master Cards, Visa, GM, and Ford cards distributed mostly by the banks. The bank defines the spending limits, which in bank speak, 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 kind of card is the retail store card, such as Sears, J.C. Penney, Shell or Mobil. These store cards and those from gas companies, widely known as fuel cards, are only taken in specific countries. They usually do not carry annual charges. There is a large disparity in the terms and conditions for these cards.
Different types 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 requirements. To know what kind 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 living for most people who live in the west. It’s becoming increasingly impossible to avoid them, especially for business men. So, if it is the first time you are about to enter into the realm of credit cards, here are some of the basics you ought to 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 indefinitely, it’s always advisable for first timers to go for the one charging the lowest rates.
Make sure you read the small print carefully, especially with regard to the other charges that may be made, like late-payment fees, annual fees, and whether there is a grace period.
Choose 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 know your spending.
You ought to compare the services such as the cash back incentives, guarantees, rebates and such like and check whether the card is taken broadly enough to fit in with your requirements.
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 allows you before he starts charging you interest on new buys. (Note that not all credit cards have a grace period).