Home > Credit Cards > Credit Cards: What Type Of Credit Card You Will Opt?
Credit Cards: What Type Of Credit Card You Will Opt? |
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Credit cards are a widely used source of convenient credit for restaurants, hotels, mail order, on-line shopping, gasoline stations, grocery stores, dental and medical care, church bazaars, as well as telephone and television advertised products. Credit cards are a convenient method of obtaining credit and, despite
some bad press, when used properly they can provide flexibility and a range of useful benefits for the cardholder. To get the most out of your credit cards, it's important to decide whether it's actually suited to the purpose you use them for. It's surprising how many people use a card that doesn't fit with their spending or repayment habits, and as a result pay more for the privilege. You should know first how many types of credit cards there are before applying for a credit card. Types Of Credit Cards There are four major types of credit cards: bank cards, travel and entertainment cards (T & E cards), retail store cards, and oil company cards. Applications and interest rates for each type of card may be different. When using a credit card, the consumer agrees to the terms of the credit card company. Read these terms carefully and understand them before using the card. Bank Credit Cards - The two major bank credit cards are MasterCard and VISA. You may use bank credit cards to charge motel and restaurant bills, merchandise, airline tickets, services, and some cards allow cash advances. Interest on a cash advance starts the day you get the money and continues until you pay back this loan. Some credit cards are offered without fees, some are included in a total banking package, and others charge a yearly membership fee. You are granted a bank credit card based on your credit record. Your credit record also determines the maximum amount you can charge. You may request to have this limit raised if you establish a good credit history while using the bank credit card. The interest charges for bank credit cards range widely, so it's worth shopping for a low interest rate if you don't pay your bill in full each month. If you fail to make the monthly-required minimum payment, this is reported and shows up on your credit report. You can have your account cancelled. Some companies use banks to sponsor their own MasterCard and VISA cards for their customers. For example, the American Automobile Association offers a AAA/VISA card that can be used to charge no-fee travelers checks, and obtain a 30-day, interest-free $300 emergency cash loan and emergency airline tickets if needed while traveling. More and more universities, organizations, travel clubs, and even political parties are sponsoring credit cards. If you support their goals, you can make a contribution to them when you make a purchase by using an affiliated (affinity) credit card. Travel And Entertainment Cards (T & E) - Consumers must apply for travel and entertainment credit cards such as American Express, Diners Club, and Carte Blanche and are charged an annual membership fee. Credit card holders are billed for purchases every 30 to 60 days. They are expected to pay each bill in full. Failure to pay promptly may result in a poor credit report, interest charges, and eventual cancellation of the account. Some T & E cards offer cardholders additional services such as group life and accident-and-health insurance, cash advances and gift catalogues. Free travel insurance is frequently provided when T & E credit cards are used and they may offer to stretch payments for large bills over a three- to six-month period. Retail Store Cards - Retail credit cards are issued by department stores and other companies. If you have a retail store card, you may be notified of special sales before the general public. These cards offer revolving credit at a preestablished credit limit. Finance charges are added to your bill if you do not pay in full each month. Most retail stores also accept bank credit cards. Oil Company Credit Cards - Oil companies offer their own credit cards and most accept VISA and MasterCard. Credit cards aren't as bad as you make them out to be, choose the credit card that suits you most. So decide what type of credit cards you want to apply for, just contact the concerned company and fulfill your dreams to purchase anything. |
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