Travel Tips

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 accepted almost everywhere. There are three major types of credit card very common in America. The first main kind of credit card is travel and entertainment cards such as American Express or Diners Card. These have to be repaid completely 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 distributed mainly 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 selection 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 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 disparity in the terms and conditions for these cards.

Different types of credit cards offer different options. Some are geared toward individual consumers, while others are designed in ways that work best for small business needs. To know what sort of credit card fits your requirements, you should review 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 charged by all the credit cards you are interested in. While the rate will not remain fixed for ever, it’s always better for beginners to go for the one charging the lowest rates.

Make sure you study the fine print carefully, especially regarding the other charges that may be applied, like late-payment fees, annual fees, and whether there is a grace period, which is normally given before the finance charges are applied.

Decide what spending limit is most appropriate for a person of your income. Also the fewer credit cards you have, the better placed you are to understand your spending.

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 gives you before he starts charging you interest on new purchases. (Note that not all credit cards have a grace period).

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