A credit card is essentially a payment card issued by credit companies to consumers to enable the consumer to pay a retailer for goods and services on a monthly basis, plus the agreed fees, if any. Most credit cards also provide additional features that will allow the consumer to manage their spending as well as rewards programs. There are three types of credit cards on the market today: MasterCard, Visa, and American Express. Each one has its own advantages and disadvantages that must be weighed carefully when deciding which credit card to get. Some tips for choosing the right credit card include understanding the annual percentage rate (APR), grace period, reward program, and others.
All credit cards except cash ones come with a standard interest rate and usually no annual fee. The APR is the rate at which your monthly payment is calculated. They also all have a standard transaction fee that is equal to one percent of your entire outstanding balance. They all also have a specific bank charge which is based on how many debit transactions you make each month. With cash and debit cards, this is not typically an annual fee.
Some credit cards offer added features such as gas-denominated rates, travel miles, gift cards, and savings accounts. Credit cards offer different options for savings accounts such as checking, savings, and money market accounts. They also offer different incentives to consumers who use their cards to make purchases, including cash back, air miles, and rental cars. Most credit cards offer some sort of insurance to consumers against fraud and theft. It is always a good idea to protect yourself from theft and notify the company immediately if your card is lost or stolen.
If you choose to have a cash back or discount store card, it is important to be aware that with this type of card, you will be earning the lower price on all your purchases. This includes any cash purchases you make. Because these types of credit cards are generally for purchases that you can pay for in full at any participating retail store, not all people can qualify to take advantage of the cash back or savings account benefits. Many times, the only people who can take advantage of these types of rewards programs are people who have good credit and/or bank accounts with balances higher than the average credit card balance.
There are a few credit cards that offer savings accounts only and some debit cards offer both savings and cash back option. However, with this type of credit card, you have to be enrolled in the program to receive the . . . . . . benefits. This is not the case with debit cards that offer both cash back and savings. You will need to show proof of having a savings account to receive these types of rewards.
Credit cards allow consumers to make purchases with little to no interest as long as they meet the spending limit and pay their bills on time. The available balance and minimum payment options available are designed to help consumers manage their credit line and their money. Consumers can use their credit cards for traveling, entertainment, restaurant expenses, department stores, entertainment and many other uses.