Travel Tips

Sorts Of Credit Cards And Selecting 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 main kinds of credit card common in America. The first major 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 sort of credit card is the bank card such as Visa, Master Cards, GM, and Ford cards distributed mostly 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 a finance charge.

The other major kind 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 disparity in the terms and conditions for these cards.

Different sorts 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 kind of credit card fits your needs, you should look over a few options.

How to Choose a Credit Card.

Credit cards are a part of everyday life 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 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 chargeable by all the credit cards for which you are eligible. While the rate may not remain fixed indefinitely, it’s always advisable for first timers to go for the one charging the lowest rates.

Make sure you read the small print carefully, especially regarding 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 suitable for someone on your income level. 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 accepted broadly enough to fit in with your requirements.

You will help yourself by acquainting yourself with the following terms: 1] Annual Percentage Rate: this is the annual 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 begin charging you interest on new purchases. (NB: not all credit card issuers give a grace period).

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

© 2010 Travel Oversea.