The commencement of the electronic age made almost everything more possible. Diagnosing and curing previously terminal illnesses became widespread; reaching uncharted territories became a possibility and above of all, people's everyday lives was made easier by technology. We now have more convenient stores, easier means of transportation and a range of labour-saving gadgets that makes work and pleasure almost effortless.
When it comes to the technology of finance, an efficient banking system and efficient services have given people better alternatives and options with which to manage their finances. Among the so many financial management schemes that emerged, one stands out above the rest - the credit card.
Credit cards, especially to working people and those who lead very busy lives, have become the ultimate financial God send. More than being an important status symbol or an accoutrement of expensive purses and wallets, credit cards have revolutionized the methods people have to spend their money.
However, apart from the glamour and the convenience that credit cards bring, there is a lot more to these bank cards than most people could ever imagine.
Credit Card 101: Before entering into the never-ending list of the advantages and disadvantages of having credit cards, it is very important for people to have a brief understanding of what a credit card really is, in order for them to maximize its potential.
In simple terms, a credit card is a device that allows a person to make purchases up to the limit set by the card issuer. One must then pay off the balance in installments with interest. Usually, credit card payments are per month and range from the minimum amount set by the bank to the entire outstanding balance. And since it is a form of business, the longer the credit card holder waits to pay off his or her entire balance, the more interest piles up.
Since having a credit card is a 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. Actually, most of the adults in the U.S. use credit cards, because it is safer and very convenient to do so compared to carrying cash or checks every time they have to make a purchase.
It is equally important to be familiar with the different types of credit cards before you begin to build up credit card debt in order to avoid having a nightmare of debt. Since credit cards are indispensable to most of their users, it is a must that they understand the types of card that include charge cards, bankcards, retail cards, gold cards and secured cards. All of these types come in one of two interest rate options: fixed and variable.
If you decide to have a fixed-rate credit card, the interest rate remains the same, compared to variable rate cards where the rate is subject to change depending on the credit card issuer's discretion. Fixed-rate cards usually carry higher interest rates.
Basically, credit card suppliers usually offer three types of accounts with basic account agreements such as the 'revolving agreement' also called the 'Typical Credit Card Account' which allows the user to pay either in full monthly or prefer to have partial payments based on the outstanding balance.
Whereas the 'Charge Agreement' requires the credit card users to pay back the complete balance every month so that they won't have to pay any interest charges. The Installment Agreement, on the other hand, asks the payer to sign a contract to repay a fixed amount of credit in equal payments over definite periods of time.
Another category of credit card account includes the individual and joint accounts where the former asks the individual alone to repay the debt while the latter requires the partners to pay.
Now that you have some understanding of how many types of credit cards there exist, it is time to review your goals before applying for one. Some of the facts you should think about is how you will use the credit card. 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 if your credit in need of rehabilitation.
Once you have an understanding of what you are looking for, pick the right credit card for you by researching the information you need. You may also check the credit cards you've checked out and compare them.
Are you shopping for a credit card? Regardless of the type of credit card you decide on, be certain to discuss your specific financial requirements with your financial advisor or accountant before applying for any credit card. It is necessary that you know the benefits of using a credit card like safety, valuable consumer protections under the law, support and the accessibility and availability of services.
Although having a credit card is perceived as being synonymous with financial security, this can also trigger a person's thirst for material things and may lead to the temptation to buy something they don't really want. A credit card bearer should always have in mind that having a credit card is a big responsibility. If they don't use it carefully, these may owe more than they can repay. It can also damage their credit status report, and create credit repair problems that are quite difficult to put right.
When it comes to the technology of finance, an efficient banking system and efficient services have given people better alternatives and options with which to manage their finances. Among the so many financial management schemes that emerged, one stands out above the rest - the credit card.
Credit cards, especially to working people and those who lead very busy lives, have become the ultimate financial God send. More than being an important status symbol or an accoutrement of expensive purses and wallets, credit cards have revolutionized the methods people have to spend their money.
However, apart from the glamour and the convenience that credit cards bring, there is a lot more to these bank cards than most people could ever imagine.
Credit Card 101: Before entering into the never-ending list of the advantages and disadvantages of having credit cards, it is very important for people to have a brief understanding of what a credit card really is, in order for them to maximize its potential.
In simple terms, a credit card is a device that allows a person to make purchases up to the limit set by the card issuer. One must then pay off the balance in installments with interest. Usually, credit card payments are per month and range from the minimum amount set by the bank to the entire outstanding balance. And since it is a form of business, the longer the credit card holder waits to pay off his or her entire balance, the more interest piles up.
Since having a credit card is a 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. Actually, most of the adults in the U.S. use credit cards, because it is safer and very convenient to do so compared to carrying cash or checks every time they have to make a purchase.
It is equally important to be familiar with the different types of credit cards before you begin to build up credit card debt in order to avoid having a nightmare of debt. Since credit cards are indispensable to most of their users, it is a must that they understand the types of card that include charge cards, bankcards, retail cards, gold cards and secured cards. All of these types come in one of two interest rate options: fixed and variable.
If you decide to have a fixed-rate credit card, the interest rate remains the same, compared to variable rate cards where the rate is subject to change depending on the credit card issuer's discretion. Fixed-rate cards usually carry higher interest rates.
Basically, credit card suppliers usually offer three types of accounts with basic account agreements such as the 'revolving agreement' also called the 'Typical Credit Card Account' which allows the user to pay either in full monthly or prefer to have partial payments based on the outstanding balance.
Whereas the 'Charge Agreement' requires the credit card users to pay back the complete balance every month so that they won't have to pay any interest charges. The Installment Agreement, on the other hand, asks the payer to sign a contract to repay a fixed amount of credit in equal payments over definite periods of time.
Another category of credit card account includes the individual and joint accounts where the former asks the individual alone to repay the debt while the latter requires the partners to pay.
Now that you have some understanding of how many types of credit cards there exist, it is time to review your goals before applying for one. Some of the facts you should think about is how you will use the credit card. 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 if your credit in need of rehabilitation.
Once you have an understanding of what you are looking for, pick the right credit card for you by researching the information you need. You may also check the credit cards you've checked out and compare them.
Are you shopping for a credit card? Regardless of the type of credit card you decide on, be certain to discuss your specific financial requirements with your financial advisor or accountant before applying for any credit card. It is necessary that you know the benefits of using a credit card like safety, valuable consumer protections under the law, support and the accessibility and availability of services.
Although having a credit card is perceived as being synonymous with financial security, this can also trigger a person's thirst for material things and may lead to the temptation to buy something they don't really want. A credit card bearer should always have in mind that having a credit card is a big responsibility. If they don't use it carefully, these may owe more than they can repay. It can also damage their credit status report, and create credit repair problems that are quite difficult to put right.
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