Types Of Credit Cards And Choosing One

Almost everyone over the age of 18 (or 21) 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 kind of credit card is travel and entertainment cards such as American Express or Diners Card. These have to be paid completely 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 parlance, is known as the credit line and each bank offers different terms and conditions. Banks offer a selection of payment methods: you may either pay 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 type 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 variance in the terms and conditions for these cards.

Different kinds of credit cards present different opportunities. Some are designed for 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 look over a few options.

How to Choose a Credit Card.

Credit cards are a part of everyday life for most people living in the western countries. It’s becoming increasingly impossible to avoid them, especially for business men. So, if this 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 will not stay fixed for ever, it’s always better for novices to apply for the one charging the lowest interest 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.

Decide which spending limit is most appropriate for a person of your income. Also the fewer credit cards you have, the better placed you are to understand your spending.

You ought to compare the services such as the cash back incentives, guarantees, rebates and the like and check whether the card is taken broadly enough to fit in with your needs.

You should acquaint yourself with the following terms: 1] Annual Percentage Rate: this is 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 of time the card issuer gives you before they begin charging you interest on your purchases. (Not all credit card issuers give a grace period).

Owen Jones, the author of this piece, writes on a variety of topics, but is now involved with Credit Card Application for Beginners. Please go to our website Using Credit Cards.