Types of Credit Cards and Choosing One

Almost everyone over the age of consent (18 or 21) has or wants a credit card nowadays and they are accepted in almost every establishment. There are three major types of credit card 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 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 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 an interest.

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 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 type of credit card fits your needs, you should review a few options.

How to Select a Credit Card.

Credit cards have become a part of 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 seeking to enter 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 may not remain fixed indefinitely, it’s always best for beginners to go for the one charging the lowest rates.

Make sure you read 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.

You should decide what spending limit is most appropriate for someone on your income level. Furthermore, the fewer credit cards you use, the better placed you will be to track 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 taken broadly enough to fit in with your requirements.

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 period of time the card issuer allows you before they commence charging you interest on your purchases. (Not all credit card issuers give a grace period).