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It's
hard to imagine doing business today without credit cards.
If you are among the relatively few who do not own a credit
card, the chances are good that you have a great deal of
difficulty renting a car or reserving a hotel room. So, just
what are these little plastic cards and how do they work?
Let's start by explaining the basics.
Information On What A Credit Card Is
The dictionary defines a credit card as
"A card which can be used to obtain cash, goods or services
up to a stipulated credit limit. The supplier is later paid
by the credit card company which in due course is reimbursed
by the credit card holder who will be charged interest at
the end of the credit period if money is still owing."
In other words, whatever you charge to your credit account
has to be paid back within the credit cycle or an interest
amount will be applied to the remaining balance.
Information On The Advantages & Disadvantages Of Credit Cards
The obvious advantage to using a credit card is that it
allows you to purchase some goods or services that you may
not be able to pay for immediately. The credit cycle is
usually about 30 days, and if the money is paid in that
amount of time, there is no interest attached to the money
borrowed. This sounds good in theory, but the bottom line is
that most Americans don't pay off their balances on a
monthly basis. This is where some of the disadvantages come
into play.
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Credit Card Information
»Credit Card
Information
»Types
of Credit Cards I
»Types
of Credit Cards II
»Various
Features
»APR
Explained
»Choosing
a Credit Card
»Credit History
»What
is a Credit Report
»Credit
Card Numbers
»Expiration
Date
»Application
Process
What to do When...
»Your
Credit Card is Stolen
»Your
Application was rejected
»You
Have no Credit History
»You have Credit
Card Debt
»You have to pay your bill
Business Owners Section
»How
Credit Cards are Processed
»Accepting
payments online
»Accepting
payments offline
»Protecting
Your Business From Fraud |
Any amount that isn't paid off
within the time of the monthly cycle will be subjected to an
interest charge. Depending upon the rate charged by the
specific card issuer, that interest rate can be huge. On top
of that, many people will continue to charge things to their
card and the balance and interest just continues to grow
until they have no hope of ever paying the card off if they
just make the minimum required payment.
Information On Credit Card Requirements
Chances are that every few days you get a pre-approved
credit card application with your name on it. Sounds easy,
doesn't it? Well, read the fine print and you'll see that
many of these offers come with heavy penalties that can add
up to high interest rates and annual fees.
To get the best possible interest rate with no additional
fees, the credit companies will look at your credit history
for information. They will check to see that you are
responsible with your credit and have paid your bills in a
timely manner. Signs of stability and credit responsibility
will go a long way in reducing the amount of interest that
card company will charge you. Outstanding loans with late
payments and too much available credit will work against
you.
Although credit cards can be great in an emergency
situation, they can easily get out of hand. Before you apply
for one, decide in advance what you plan to use it for. If
used with discretion, they can come in pretty handy.♦
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