There are so many different types of credit card – including rewards cards, gas cards, student cards, cash back cards, credit cards for entertainment purposes and many more – that it is up to each particular credit card to tell you its specific features, however, you may agree that the credit card having your interests at the forefront, that is to say the ones you use, is invariably the best credit card to fit your lifestyle and requirements. The credit card may offer a number of benefits for you, however, you might find that they will not be suited your particular interests the most – for example you might be spending more in the pocket than in the purse – while in fact at the same time have greater purchasing power because you will get a wider purchase opportunity in the market for credit cards. The concept of credit cards may seem abstract and unassuming, and you need not worry, however, for the concepts and practices of this new type of credit card will need to be developed much more closely and consistently in order for it to be successful.
The following is a brief list of some of the more known varieties to be found in the market place in regard to credit cards in order to give you a better informa�y of what, exactly, you will ultimately end up paying in the short term.
‘No-interest secured cards – these are cards that provide an initial ‘no-interest’ on outstanding loans, provided that they are secured in the form of a mortgage in your name. The borrower in these cards can avail of a mortgage free of interest for the term of the property, provided that you pay all or one-third of the debt in the monthly installments.
‘The ‘go-ahead’ credit cards – these are those cards in which a percentage of the outstanding fees are agreed upon by the lender as part of the mortgage. Thus, only the borrower who has the capability to pay the entire balance in the specified amount of time (normally thirty days) can avail of credit cards in such cases. Before signing the mortgage loan application, however, you need to clearly inform the lender of the borrower’s intention of using the credit cards. In providing such an application, one must know the borrower intentions in referring to use of credit cards.
‘A ‘black-out” period’ – in which one can not use the credit cards, but can instead use them at the customer’s request – means that you must use your credit cards while on a shopping spree – and there are many credit card companies that will deal strictly with merchants who offer free or reduced sale of goods and services to customers. Some of these cards will have a cash back or rewards aspect, while some of them will not offer such a feature. But at the end of the month, you must remain calm and take all the necessary precautions to prevent any misdeeds that may result if you do use your cards.
‘A ‘security payment” that is, one cannot borrow more than you have taken out of the card’s opening. Thus, you must keep the card-loan balance below $100 and pay it only once in the term of the loan – for in case of a black-out period, you can expect to pay your balance in full and before the time is up up for thirty days in some cases.
‘Annual fees and/or accrued interest – annual accrues each time the amount of the credit card balance you owe is included in the monthly payment. The same fee should be payable every month for the initial period and it should be paid on the due date.
‘No-fee – no-frills system – in which you pay the actual amount in interest just in case, instead of an estimate period, in which the credit card fees are incurred promptly – this is a type of annual fee and doesn’t necessarily include the actual interest rate. In the advent of the no-fee system, however, card companies went about the business of eliminating unnecessary costs incurred by not lowering the interest rate on credit cards. The companies did the following:
‘ Select the card with the lowest APR
‘ Select the card with the highest Annual Percentage Rate
‘ Select your card with the least features
‘ Select your cards with low APR after the APR period has ended (as determined by you according to the card company)
For more information on the no-fee system and on how it may result in savings on interest and finance charges, one should visit the web site of the credit card company, http://go.moneyadvocate.com/no-fee-system.
Credit Card Basics
Credit card accounts provide an alternative to traditional cashless transactions.