Credit Card 101
The evolution of electronic technology had made almost everything achievable –determining and curing terminal diseases was made easier, reaching unexplored territories become a possibility, and above all, it made everyday life of people easier. Because of technology, can find convenient stores in almost every corners of the street, we have easier means of transportation and we have a wider choice on the variety of gadget available in the market today that make work faster, that bring in pleasure and leisure in our everyday life.
Almost all fields of life were served by the development of technology- transportation, communication, health, leisure, finances and more. When it comes to finances, technology—through efficient banking system and services—has given people superior alternatives and options in managing fiscal maters. Among the so many financial management schemes that are made possible by technology, one shows superiority—the credit card.
Credit card has become an ultimate financial rescuer to working people whose lives are very busy. Credit card has transformed the way people spend their funds, it’s far more than just an add-on to expensive purses and wallets. Possessing credit cards had been a status symbol for people but more than the glamour and the convenience credit cards bring, there is much more to this card than most people could ever imagine.
As what is said in the previous article Useful Insights in Applying for a Credit Card, a long list of pros and cons can be sited when you apply for a credit card. But before indulging much into these never-ending lists, it is very important for people to first have a thorough understanding of what a credit card really is in order to maximize its potential.
In a straightforward explanation, credit card is a card that let a person to make purchases up, without having cash, to the limit set by the card issuer. A pay off in the balance in installment basis must then be made with interest payments. Credit card payment per month varies from the least amount set by the bank to entire outstanding balance. The longer the credit card holder waits to pay off the entire amount of credit, the more interest is charged to his or her account.
In layman’s term having credit card is simple as lending money and paying it off with interest, and it means a responsibility. Since it’s a legal responsibility, only those people who are of legal age and have the capability to pay off the amount they are going to spend through their credit card, is allowed to have one. In fact, most of the adults in Europe and in the United States use credit card because of its convenience, rather than to carry cash or checks every time they have to purchase something they used credits cards for this purpose.
To avoid having a nightmare of debt, it’s very important to be acquainted with the different types of credit cards before beginning to build up credit card balances. Since credit cards are vital to most consumers, it is a must that they understand the types of card that include retail cards, charge cards, gold cards , bankcards, and secured cards. It is wise to note that whatever type of credit card it is, it always come in one of two interest rate options—the fixed and variable. The truth is it doesn’t really matter if you decide to have a fixed-rate credit card because the interest rate remains the same. Fixed-rate carry higher interest rate compared to variable rate cards where rate may be subject to change depends upon the credit card issuer’s discretion. Normally, credit card grantors issue three types of accounts with basic account agreements like the “revolving agreement” a.k.a. Typical Credit Card Account which allows the payer to pay in full monthly or prefer to have partial payments based on outstanding balance. On the other hand, the Charge Agreement requires the payer to pay the full balance monthly so they won’t have to pay the interest charges, while the Installment Agreement asks the payer to sign a contract to repay a fixed amount of credit in equal payments in definite period of time. Another category of credit card accounts includes the individual and joint accounts where the former asks the individual alone to repay the debt while the latter requires the partners responsible to pay. The familiar types of credit cards available through banks and other financial institutions also include Standard Credit Cards like Balance Transfer Credit Cards and Low Interest Credit Cards; Credit Cards for Bad Credit like Secured Credit Cards and Prepaid Debit Cards; Credit Cards with Rewards Programs like Airline Miles Credit Cards, Cash Back Credit Cards and Rewards Credit Cards; and Specialty Credit Cards like Business Credit Cards and Student Credit Cards.
Indeed there are various types of credit card and now that you have an idea how many types of credit card there is, it is now time to review your goals before applying for one. As what was discussed the previous article that one must have reasons in applying for a credit card. These goals and reasons must be your basis in choosing the type of credit card you will be availing. There are things you should considers in choosing the right credit card, one important aspect is how will you spend with the credit card monthly, if you plan to carry a balance at the end of the month, how much are you willing to pay in annual fees, if you have a strong credit history and is does your credit in need of rehabilitation. Once you have an idea of what you are looking for select the right credit card for you by doing an in-depth research on the information you need that will fit your basic needs. It’s an advantage to review the credit cards you have research and compare them. These will allow you to way the pros and cons of the different credit card types and will give you more chances of getting the right credit card for you.
Regardless of the type of credit card you choose, it is a must that you realize the benefits of having a credit card like safety, valuable consumer protections under the law, and the accessibility and availability of services. It’s best to discuss your specific financial needs with your financial advisor or accountant before applying for any credit card. The most popular credit cards include First Premier Bank, Chase Manhattan Bank, Citibank, Bank of America, BankOne, Visa Credit Cards, American Express, Discover® Card, Advanta, HSBC Bank, and MasterCard Credit Cards.
Credit card holders must be aware that credit card may trigger a person’s thirst for material things and may lead into the temptation of buying something that is not of necessity. A credit card owner should always bear in mind that having a credit card is a big responsibility. If it’s not use carefully, one may have debt more than what he/she could really pay. It damages credit report, which, create credit problems that are quite difficult to repair. Just a tip of advice: be always vigilant and wise in using your credit card if you have one or if you are planning to have one.
If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader.
Comments
[...] Spunder LLC. Blog wrote an interesting post today onHere’s a quick excerpt The evolution of electronic technology had made almost everything achievable –determining and curing terminal diseases was made easier, reaching unexplored territories become a possibility, and above all, it made everyday life of people easier. Because of technology, can find convenient stores in almost every corners of the street, we have easier means of transportation and we have a wider choice on the variety of gadget available in the market today that make work faster, that bring in pleas [...]
I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog.
Tim Ramsey