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 main types of credit card very common 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 generous on spending limits.
The second major sort 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 parlance, 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 those from gas companies, widely 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 types 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 review a few options.
How to Select your Credit Card.
Credit cards are a part of everyday living for most people living 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 on 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.
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.
Decide what spending limit is most suitable 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 features 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 should acquaint 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 of the transaction. 3] Period of Grace: This is the length of time the card issuer allows you before they commence charging you interest on your purchases. (Not all credit card issuers allow a grace period).