Types Of Credit Cards And Choosing One

by Owen Jones on December 15, 2011

Almost everyone over the age of consent has or wants a credit card these days and they are taken in almost every establishment. There are three main sorts of credit card in use in America. The first main sort of credit card is travel and entertainment cards such as American Express or Diners Card. These have to be repaid in full at the end of the month and are generous on spending limits.

The second major kind of credit card is the bank card such as Visa, Master Cards, GM, and Ford cards sponsored mostly by the banks. The bank defines the spending limit, which in bank speak, is known as the credit line and each bank offers different terms and conditions. Banks offer a choice of payment methods: you may 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 sort of card is the retail store card, such as Sears, J.C. Penney, Shell or Mobil. These store cards and those issued by gas companies, which are usually known as fuel cards, are only taken in some countries. They usually do not carry annual fees. There is a large variance in the terms and conditions for these cards.

Different kinds of credit cards offer different options. Some are designed for individual consumers, while others are designed in ways that work best for small business needs. To know what kind of credit card fits your needs, you should review a few options.

How to Select your Credit Card.

Credit cards have become a part of everyday life for most people living 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 stay fixed indefinitely, it’s always better for novices to apply for the one charging the least interest.

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 which spending limit is most suitable for someone of your income level. Furthermore, the fewer credit cards you have, the better placed you will be to track your spending pattern.

You should compare the services and other features such as the cash back incentives, or warranties, rebates and such like and check whether the card is taken widely enough to suit your requirements.

You will do yourself a favour by familiarizing yourself with the following terms: 1] Annual Percentage Rate: this is the measure of 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 the issuer allows you before he starts charging you interest on new purchases. (Note that not all credit cards have a grace period).

Owen Jones, the writer 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.. Unique version for reprint here: Types Of Credit Cards And Choosing One.

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