Almost everyone over the age of consent has or wants a credit card these days and they are accepted almost everywhere. There are three main types of credit card very common in America. The first main 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 generous on spending limits.

The second major type of credit card is the bank card such as Visa, Master Cards, GM, and Ford cards distributed 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 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 kind 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 disparity 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 designed in ways that work best for small business requirements. To know what sort of credit card fits your needs, you should look over a few options.

How to Choose your Credit Card.

Credit cards have become 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 by all the credit cards for which you are eligible. While the rate will not remain fixed for ever, 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.

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 features such as the cash back incentives, guarantees, rebates and such like and check whether the card is accepted broadly enough to fit in with your needs.

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 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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Just ask yourself: is the credit card work for me or am I working for the credit card? Most people’s response to this question will depend on how they use their “plastic pal” as credit cards are often known. As many people with huge credit card debts will tell you, they didn’t realize that things were so bad until too late, because most credit card companies try so hard to make themselves seem like a charity. Well, take it from me, they aren’t.

However, this is not an anti credit card campaign. They have their uses – in America, for example, if you want to hire a vehicle, you must have a (major) credit card. But, think about this situation:

You get an offer in the post that sounds good, perhaps it’s a new TV or fridge. But it costs $2,000. You have a credit card with a $5,000 limit, so you go out and buy the item right away. Often, this is how your repayment schedule will work out. Most credit cards charge a minimum percentage of the total balance (usually 2 percent) per month. Assuming the interest rate is 18 percent and you choose to repay the minimum amount of $40, $30 of that will go towards interest and only $10 will come off the $2,000!

Does it sound worrying? Well, it doesn’t have to be. The moral of the illustration is to use the credit card very, very carefully.

Credit Cards Dos and Don’ts

There is a lot of truth in the saying that credit cards are not a substitute for not having money. Every time you use a credit card this should be the theme song playing in your mind. Moreover, you would be wise to remember the following as well:

Dos.

1] Always plan for the purchases that you need and those that you just want. You need the essentials, but you only want everything else. The ability to make a distinction might assist you plan more wisely.

2] If you are caught up in financial difficulties, it’s always a good idea to talk to the credit card issuer who might re-schedule your repayments. If you just default, that only builds up an unfavourable credit history for you and you could find yourself being refused credit in the future.

3] Unless it is an emergency, staying within your credit limits will help you a lot. If you must spend over the limit, ensure you are within manageable levels, say within 30 percent.

4] If your letterbox is full to the brim with details on credit cards that have better deals than you are currently receiving, you can always approach your issuer for a better deal. They want to keep your business, so they will hear you out.

Don’ts

1] Do not use your credit card to purchase household items. It is very expensive in the long term.

2] Do not only pay the minimum amount necessary. You will end up paying exorbitant amounts of interest. The more quickly you can pay off the debt the better.

3] Do not use the credit card to buy things you can’t afford.

If you are thinking onswapping or applying for a Credit Card, check out the free advice on our website on using Credit Cards wisely. You are welcome to reprint this article – but get your own unique content version here.

categories: credit cards,credit,finance,loans,mortgage,money,self help,advice,banking,funds,debt,shopping,auto,other

Almost everyone over the age of consent has or wants a credit card these days and they are accepted almost everywhere. There are three main kinds of credit card very common in America. The first main kind 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 liberal on spending limits.

The second major type 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 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 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 needs. To know what sort of credit card fits your needs, you should look over a few options.

How to Select a Credit Card.

Credit cards have become 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 this 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.

Make sure you study the fine print carefully, especially on 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.

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 requirements.

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).