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 main types of credit card in use in America. The first major sort 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 kind of credit card is the bank card such as Visa, Master Cards, GM, and Ford cards sponsored 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 sort 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 accepted in specific countries. They usually do not have annual charges. There is a wide disparity in the terms and conditions for these cards.
The various 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 look over a few options.
How to Select your Credit Card.
Credit cards are a part of everyday life 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 charged by all the credit cards you are interested in. While the rate will not stay fixed indefinitely, it’s always better for novices to apply for the one charging the lowest interest rates.
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.
You should decide which spending limit is most appropriate for someone on your income level. Furthermore, the fewer credit cards you use, the better placed you will be to track your spending pattern.
You ought to compare the services such as the cash back incentives, guarantees, rebates and the like and check whether the card is accepted broadly enough to fit in with 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 period 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).
