The emergence of the electronic age has made almost everything possible. Diagnosing and curing previously deadly illnesses became widespread; reaching uncharted territories became a possibility and most of all, people's everyday lives was made easier by technology. We now have more convenient stores, more comfortable means of transportation and a variety of 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 saviour. More than just being a status symbol or an accoutrement to expensive purses and wallets, credit cards have revolutionized the way people spend their money.
However, besides the glamour and the convenience that credit cards bring, there is much more to these bank cards than most people could ever imagine.
Credit Card 101: Before entering into the very long list of the pros and cons of using a credit card, it is very important for people to realize just what a credit card really is, in order for them to maximize its potential.
In layman's terms, a credit card is something that allows a person to make purchases up to the limit set by the card issuer. One has then to pay off the balance in installments with interest. Usually, credit card repayments are monthly 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 so convenient compared with carrying cash or cheques every time they have to purchase something.
It is just as important to be cognizant of the various kinds of credit cards before you begin to build up credit card debt in order to avoid having huge debt. Since credit cards are indispensable to most consumers, it is necessary that they understand the types of card that include charge cards, bankcards, retail cards, gold cards and secured cards. All of these kinds of cards come with one or two interest rate options: fixed and variable rates.
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 issuers offer three types of accounts with basic account agreements like 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.
While the Charge Agreement requires the payer to repay the full 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 agree to 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 requires the individual alone to repay the debt and the latter requires the partners to pay together.
Now that you have an idea of how many types of credit cards there are, it is time to review your goals before applying for one. Some of the things you should consider 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 a reasonable idea of what you are looking for choose the right credit card for you by researching the information that will fit your needs. You can also review the credit cards you've researched and compare them.
Are you shopping for a credit card? Regardless of the type of credit card you choose, be sure to discuss your specific financial needs with your financial advisor or accountant before applying for any credit card. It is necessary that you understand 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 may 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 holder 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 report, and create credit problems that are very difficult to repair.
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 saviour. More than just being a status symbol or an accoutrement to expensive purses and wallets, credit cards have revolutionized the way people spend their money.
However, besides the glamour and the convenience that credit cards bring, there is much more to these bank cards than most people could ever imagine.
Credit Card 101: Before entering into the very long list of the pros and cons of using a credit card, it is very important for people to realize just what a credit card really is, in order for them to maximize its potential.
In layman's terms, a credit card is something that allows a person to make purchases up to the limit set by the card issuer. One has then to pay off the balance in installments with interest. Usually, credit card repayments are monthly 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 so convenient compared with carrying cash or cheques every time they have to purchase something.
It is just as important to be cognizant of the various kinds of credit cards before you begin to build up credit card debt in order to avoid having huge debt. Since credit cards are indispensable to most consumers, it is necessary that they understand the types of card that include charge cards, bankcards, retail cards, gold cards and secured cards. All of these kinds of cards come with one or two interest rate options: fixed and variable rates.
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 issuers offer three types of accounts with basic account agreements like 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.
While the Charge Agreement requires the payer to repay the full 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 agree to 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 requires the individual alone to repay the debt and the latter requires the partners to pay together.
Now that you have an idea of how many types of credit cards there are, it is time to review your goals before applying for one. Some of the things you should consider 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 a reasonable idea of what you are looking for choose the right credit card for you by researching the information that will fit your needs. You can also review the credit cards you've researched and compare them.
Are you shopping for a credit card? Regardless of the type of credit card you choose, be sure to discuss your specific financial needs with your financial advisor or accountant before applying for any credit card. It is necessary that you understand 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 may 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 holder 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 report, and create credit problems that are very difficult to repair.
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