Credit Card Traps, And How To Avoid Them
Buy it now but pay later. It became the American way. Without any hesitations we can say that a credit card is very useful and powerful tool. However, with the rising amount of American people using credit card or even cards, too much of a good thing can lead to big trouble. Read more... 
From Wikipedia, the free encyclopedia.
A credit card system is a type of retail transaction settlement and
credit system, named after the small plastic card issued to users of the system. A
credit card is different from a debit card in that the credit card issuer lends the
consumer money rather than having the money removed from an account. It is also different
from a charge card (though this name is often used to describe credit cards by the public)
in that charge cards do not extend the user credit -- the charges must be paid each month
in full. In contrast, a credit card allows the consumer to 'revolve' their balance, at the
cost of having interest charged. Most credit cards are the same shape and size, as specified by the ISO 7810 standard.
Apply For Student Credit Card
Before a college students make decision to apply for student credit card, they better know the basic information about credit and how credit card system works. Credit should be taken very seriously and not applied because somebody at college campus is offering Frisbee or T-shirt after you apply for credit card. Read more... How they work
A user is issued a credit card after approval from the provider (often
a general bank, but sometimes from a captive bank created to issue a particular brand
of credit card, such as American Express Centurion Bank), in which they will be able
to make purchases from merchants supporting that credit card up to a prenegotiated credit
limit. When a purchase is made, the credit card user indicates his/her consent to pay,
usually by signing a receipt with a record of the card details and indicating the amount
to be paid. More recently, electronic verification systems have allowed merchants (using a
strip of magnetized material on the card holding information in a similar manner to magnetic
tape or a floppy disk) to verify that the card is valid and the credit card customer has
sufficient credit to cover the purchase in a few seconds, allowing the verification to
happen at time of purchase. Some services can be paid for over the telephone by credit
card merely by quoting the number embossed onto the card (the credit card number ), and
they can be used in a similar manner to pay for purchases from online vendors.
Each month, the credit card user is sent a statement indicating the purchases
undertaken with the card, and the total amount owed. The cardholder must then pay a
minimum proportion of the bill by a due date, and may choose to pay more or indeed pay
the entire amount owed. The credit provider charges interest on the amount owed (typically
at a much higher rate than most other forms of debt). Credit card issuers usually waive
interest charges if the balance is paid in full each month, which allows the credit card
to serve as a form of revolving credit, or they may choose to apply any payments toward
recent rather than previous debt. Interest rates can vary considerably from card to card,
and the interest rate on a particular card may jump dramatically if the card user is late
with a payment on that card or any other credit instrument . As the rates and
terms vary, services have been set up allowing users to calculate savings available by
switching cards, which can be considerable if there is a large outstanding balance (see
external links for some on-line services).
Choosing Student Credit Card
Credit card terms and conditions vary among different issuers. While shopping for credit card online, think about how you are going to use it. You expect to pay the bills in full every month, or you plan to pay the balance over time? Consider card`s Interest Rate, Finance Charges, Annual Fee, Grace Period for purchases, balance calculation method, etc. Read more... Because profit margins in the credit card industry can be quite high, credit
providers often offer incentives such as frequent flier miles, gift certificates, or cash back
(typically 1 percent) to try attract customers to their program.
Secured credit cards
A secured credit card is a type of credit card in which you must
first put down a deposit between 100% and 200% of the total amount of credit you
desire. Thus if the holder puts down $1000, he or she will be given credit in the
range of $500–$1000. This deposit is held in a special savings account. The owner of
the secured credit card is still expected to make regular payment, as he or she would
with a regular credit card, but should he or she default on a payment, the card issuer
can deduct payments on the card out of the deposit. However, if the card holder is unable
to pay, many issuers of secured credit cards consider that the account must be paid before
the security is released rather than using the security to cover the balance due, will not
cancel the card or set off the deposit, and will continue to charge interest on an unpaid
balance for considerable periods of time, in such cases causing charges in total to far exceed
the original deposit. Secured credit cards are an advantage to anyone with a poor credit
history or no credit history. They are often offered as a means of rebuilding one's credit.
Secured credit cards are available with both Visa and MasterCard logos on them. Many of them
charge exorbitant fees and service charges, far beyond those of ordinary non-secured credit
cards.
Manage Credit Debt
Buy it now but pay later. It became the American way. Without any hesitations we can say that a credit card is very useful and powerful tool. However, with the rising amount of American people using credit card or even cards, too much of a good thing can lead to big trouble. Read more... Features
As well as convenient, accessible credit, the cards offer consumers an easy way
to track expenses, which is necessary both for monitoring personal expenditures and the
tracking of work-related expenses for taxation and reimbursement purposes. They have now
spread worldwide, and are offered in a huge variety of permutations with differing credit limits,
repayment arrangements (some cards offer interest-free periods, while others do not but compensate
with much lower interest rates), and other perks (such as rewards schemes in which points
"earned" for purchasing goods with the card can be reclaimed for further goods and services).
Some countries such as the United States limit the amount that a consumer can be
held liable for due to fraudulent transactions as a result of a consumer's credit card being l
ost or stolen.
Tips for managing your credit cards
Today`s credit cards always offer a wide range of different features, including frequent flier miles or programs that earn points toward a hotel or car, and cards that make donations for charity organizations. Other cards worth include extended warranty coverage, car-rental insurance coverage, trip cancellation coverage, etc. Read more... |
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