Credit Cards and Choosing One
Almost everyone over the age of consent has or wants a credit card these days and they are accepted almost everywhere. There are three major sorts of credit card very 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 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 Visa, Master Cards, GM, and Ford cards sponsored 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 choice of payment means: you may either repay 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 the ones from gas companies, which are known as fuel cards, are only accepted in specific countries. They usually do not have annual fees. 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 set up in ways that work best for small business needs. To know what type of credit card fits your needs, you should review a few options.
How to Choose your 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 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 remain fixed for ever, it’s always better for beginners to go for the one charging the lowest rates.
Read the small 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. Also the fewer credit cards you have, the better placed you are to track your spending.
You should compare the services and other features such as the cash back incentives, or warranties, rebates and the like and check whether the card is taken widely enough to suit 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 offer a grace period).