Sorts Of Credit Cards And Selecting One

By Bob Jones | December 28, 2009

Almost everyone over the age of consent (18 or 21) has or wants a credit card nowadays and they are taken in almost every establishment. There are three main sorts of credit card in use 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 paid in full by 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 methods: you can either repay 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 those from gas companies, widely known as fuel cards, are only taken in specific countries. They usually do not carry annual fees. There is a wide variance in the terms and conditions for these cards.

The various kinds 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 sort of credit card fits your requirements, you should look over a few options.

How to Choose a Credit Card.

Credit cards have become a part of everyday living for most people living 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 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 may not remain fixed indefinitely, it’s always better for beginners to go for the one charging the lowest rates.

Make sure you study the fine print carefully, especially with regard to the other charges that can 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 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 yearly cost of the credit. 2] Finance Charges: these are the total charges involving the transaction. 3] Period of Grace: This is the period of time the card issuer gives you before they commence charging you interest on your purchases. (Not all credit card issuers allow a grace period).

If you are considering swapping or applying for a Credit Card, have a look at the free advice on our website on using Credit Cards wisely.

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