Types of 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 main type of credit card is travel and entertainment cards such as American Express or Diners Card. These have to be repaid completely at the end of the month and are generous on spending limits.
The second major type of credit card is the bank card such as Master Cards, Visa, GM, and Ford cards sponsored mainly 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 selection 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 type 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 carry annual charges. There is a wide variance in the terms and conditions for these cards.
Different sorts of credit cards present 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 requirements, you should review a few options.
How to Select a Credit Card.
Credit cards are 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 by all the credit cards you are interested in. While the rate may not stay fixed for ever, it's always better for novices to apply for the one charging the least interest.
Make sure you study the small print carefully, especially with regard to the other charges that can be made, like late-payment fees, annual fees, and whether there is a grace period.
Decide which spending limit is most appropriate for a person of your income. Furthermore, the fewer credit cards you use, the better placed you will be to understand your spending pattern.
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 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 involving the transaction. 3] Period of Grace: This is the period the issuer gives you before he starts charging you interest on new purchases. (Note that not all credit cards have a grace period).
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