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 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 paid in full 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 distributed 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 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 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 specific countries. They hardly ever have annual fees. There is a wide disparity in the terms and conditions for these cards.

Different types of credit cards offer different options. Some are designed for individual consumers, while others are set up 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 your Credit Card.

Credit cards have become a part of everyday life 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 thinking of entering into the world of plastic money, here are some of the basic things you should 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 least interest.

Make sure you read the fine print carefully, especially regarding 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. Furthermore, the fewer credit cards you have, the better placed you will be to track your spending pattern.

Compare the services and other features such as the cash back incentives, or warranties, rebates and such like. Check whether the card is widely enough accepted to cater for your requirements.

You will help yourself by acquainting 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 new purchases. (NB: not all credit card issuers allow a grace period).

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