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Today, you would find hardly any person who doesn't know about the credit cards. Credit cards are fast replacing those paper currencies. Nowadays, you need not carry cash with you. By keeping the slim and slender plastic cards in your wallet you can ask for anything you want. Credit cards give you the power to make a purchase even if you don't have money in your account. But there is a limit of how much money you can take out on credit. At the present time there are a lot of banks, credit unions and financial institutes that are issuing credit cards to consumers. If you apply for a credit card today, you would get it within one week, sometimes just after two or three days. Online application for credit cards has made the process easier and comfortable. Sitting in front of your personal computer you can now apply for your credit card right from the comfort of your home. All credit card issuers charge an annual fee which is payable at the start of the year. The start of the year, of course, is your membership year, and not the calendar year. So, if you got yourself a card in April, you can expect to be billed the annual fee every April until you cancel your card. As a privilege, this fee is sometimes waived the first time. When the time comes for renewal of your card, you can even use the reward points you have accumulated from using the credit card over the year to settle your annual fee. But do you know about the interest rates on these credit cards? The banks and other financial institutes that issue credit cards charge high interest rates on them. And if you are unable to repay them immediately, you might simply be in danger. In America, millions of consumers reel under credit card debts every year only because of their irregular repayment habits. On average the Americans keep 11 credit cards with them. Most of them use the cards for every purpose--be it for buying something from the department store or for filling petrol for their cars. And of course, a good number of users fail to repay the interest rates and as a result end up in paying more and thus lowering their credit score. So, it's very much necessary to deal with your credit cards in a proper manner. Credit card interests should be paid back on time. It not only saves thousands of your dollars but also increases your credit rating and gives you a chance to apply for other types of loans. Most economists and financial researchers of the country suggest consumers to reduce the numbers of their credit cards. According to them debit cards are a better option for consumers than the credit cards. Debit cards are the plastic cards that have direct access to your bank account. Your bank issues these cards. Whenever you use your debit cards, your bank account is debited immediately. Unlike credit cards, you don't enjoy any credit period and therefore the debit card does not have a minimum income eligibility criterion. But with these cards you can keep a vigil on your budget. If you don't have sufficient money in your account, you can't buy the product. It saves you from the habit of going on a spending spree with your credit cards. Some of the salient features of a debit card are mentioned below: --A debit card is a combination of a check and ATM card. Therefore, there are no fees for using the ATM for cash withdrawal, or as a debit card for purchase. --A debit card is more affordable than a credit card. You just use your bank account for all your transactions. --No credit period. Your bank account is debited immediately. --Spending is limited to your bank balance. So, debit cards carry less risk for consumers as compared to the credit cards. Debit cards may not give you the opportunity to buy a commodity if you don't have balance in your bank account, but it definitely saves you from the clutches of higher interest rates. |
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