best credit card
What is a Credit Card?
Best Credit card
Put simply, a credit card is just a small piece of plastic that easily fits in your wallet.
Well, it’s not ‘just a piece of plastic’; it’s a very powerful piece of plastic which can be regarded as a compressed form of cash.
We can define credit cards as a credit system that allows the consumer to borrow money on the fly from a bank or a financial institution and use it to make payments to the merchants.
In order to obtain a credit card, the consumer needs to fill-in an application form that is actually like an agreement between the credit card supplier and the credit card consumer.
The credit card supplier approves the application form and provides the consumer with a small piece of plastic (i.e. the credit card).
This plastic (or credit card) contains electronically encoded security information in the form of a magnetic strip (which is generally located at the back of the credit card).
This information is used for authorising payments whenever the consumer uses the credit card. The consumer can use the credit card for shopping at merchant outlets or on the internet etc.
Of course, this is subject to merchant’s capability to accept credit card payments. Accepting the credit cards is, however, not enough.
The merchant should be able to accept payments made through the credit card provided by that credit card organization (of which you hold the credit card) i.e.
VISA, MasterCard etc. You can also use credit card to withdraw cash from ATMs (automatic cash machines) – also known as cash machines or Day/Night machines.
There are eight main credit card organisations and most of them operate in a lot of countries world wide. These are American Express, Citi, Diners Club, Discover, JCB, MasterCard and VISA.
Master card and VISA are probably the most popular ones.
Then there are credit card suppliers or issuers who have tie-ups with these organisations and issue credit cards on their behalf e.g. you have various banks that issue VISA cards (like HSBC VISA card)
To make a payment using a credit card, the credit card has to be either swiped into special credit card processing machine (when shopping in person at shops)
or the details of the credit card have to be entered on the merchant’s website (when shopping online).
The credit card supplier sends across the bill for these transactions to the consumer who is then required to pay either the full amount or a partial (minimum) amount.
If you pay in full, the credit card supplier doesn’t charge any interest on the amount you owe, otherwise the pre-agreed interest rate is charged.
If you don’t pay even the minimum, you might land up with a late fee too. Moreover, the credit card supplier generally puts a limit on the maximum amount you can spend per month using your credit card.
So Many Credit Card Offers, What To Do?
Just browse through the daily newspaper and you will be overwhelmed by the number of credit card offers advertised.
Move around the town and you will find credit card offers being advertised everywhere. Same is the case is with television which seems to host a number of credit card offers too.
So, the credit card offers are there everywhere. Why are there so many credit card offers? Well, quite simply because credit card business is a highly profitable business for the credit card suppliers.
In this situation, when there is no dearth of credit card offers, which is the best credit card offer?
There is nothing like a best credit card offer, really. A better question to ask would be – ‘Which credit card offer is the best for me?’
The spending habits of one person are different from that of another person. Their living styles vary and hence their needs vary too.
So for deciding on which credit card offer is best for you, you need to evaluate your needs vis-à-vis your lifestyle and your spending habits (and not go just by the recommendation of someone).
For example, if you frequently travel by air, a co-branded airline credit card might be more suited to you than the general purpose one.
These airline credit cards offer discounts, rebates and other kind of rewards when the credit card is used for making payments (the rewards are even higher when these credit cards are used for paying for the airline tickets or other airline products).
Similarly, if you have a favorite retail store where you do a lot of your shopping, it would be beneficial to check if the retailer is a credit card supplier too and if there is a credit card offer that suits you.
A lot of big retail chains do offer co-branded credit cards to their customers and these credit cards offer rebates/discounts etc when they are used for making payments at the retail store.
As such, you get reward points for making payments at any place but the rewards are higher on the payments made at retail store.
On similar lines, we have credit cards for gas stations and grocery stores too, which you can opt for if you have a favorite gas station or a favorite grocery store where you shop a lot.
So, if you look around, you will find a lot of lucrative credit card offers. However, this doesn’t mean that you enroll for all the credit card offers.
You need to first evaluate your needs and rank them. Then you need to evaluate what all credit card offers suit your needs.
And finally you can make your choice and go for a credit card offer that covers most of your needs and gives maximum benefits.
How Many Credit Card Deals You Need?
Day by day we get lots of credit card applications in our mail boxes. Banks and credit card companies offer credit card deals for different purposes to fit everyone:
reward credit cards, business credit card deals, student credit cards and etc. No matter what your credit history is, you can always find an offer for you.
Using credit cards, we can earn cash back, free movie tickets, discounts, free flights and hotel stays, etc. That is why having one more credit card offer in your mail box it is so easy to yield the temptation to apply for a new credit card deal.
But there is a question: how many credit cards you need? Can the number of credit cards you own affect your credit history?
The researches show that most Americans use from five up to ten credit cards. An average American family owes credit card companies around $12,000 when an average household is only $ 50,000.
Their credit card debt makes 24% of the annual income and it is without mentioning their car loans and mortgages. Isn’t the statistics is alarming?
The main question is: How many credit cards you need? Financial experts believe that two or three credit cards are quite enough and advise credit card owners to limit the number of credit cards they own.
Keep in mind, that your outstanding balance is very important to credit card companies.
The balance should be between 25% and 50% of the available credit on each credit card of yours. If you overdraw your balance the potential creditors will hardly have much trust in you.
Before applying for one more credit card, consider the fact that the fewer the number of credit cards you owe, the easier it will be for you to keep control of your balance. Just think, having 3 reward credit cards, 2
gasoline credit cards and a business credit card dealat the same time, you can have many difficulties in keeping under control of your debt on all these cards.
However, if you own only two or three cards, you will be able to keep track of your spendings and will know exactly where you stand with your balances!
Using fewer credit cards, you will feel that your credit cards work for you but not you work for them. It can also help you to decrease your entire debt.
So, consider your needs and purposes carefully before applying for a new credit card in order to get the card that will fit all your needs.
Mind the most important is not to have many credit cards, but to get a credit card that will provide you with all the features you need.
Acting Smart With Your Credit Card
Whether you own a credit card that offers reward points, a credit card with a low ongoing APR or one with a 0% APR intro rate, it helps – and pays – to act smart with your credit card usage.
If and when you own a credit card, it’s not just simply a matter of swiping and paying off bills. There are ways to maximize the promotional offers and rewards of your credit card and we’re here to teach you how to be a smart credit card owner.
The Zero Percent (0%) APR Intro Rate Credit Card
– So, you’ve been approached by a credit card representative offering you this type of credit card, have you?
He made it all sound so simple and wonderful, didn’t he?
Or maybe, you accidentally came across a credit card website and you found yourself mesmerized with the words zero percent.
Whatever the case, here’s the truth about 0% APR intro rate credit cards – it’s not what everybody needs. That’s right.
Even if it does promises to give you 0% APR on your credit card purchases, keep in mind that this is an intro rate we’re talking about.
And this means that if the introductory period is over – and the coverage is usually between three to fifteen months, tops – then say bye-bye to your beloved 0% APR and say hello once more to the normal APR for credit cards.
A 0% APR intro rate credit card is best for people who want to transfer their balance from old credit cards and people who are planning to make expensive purchases and are able to pay them off before the introductory offer expires.
When shopping for 0% APR intro rate credit cards, remember to ask about the duration of the introductory period, what the APR’s going to be after the intro period and if there are any additional fees to be paid.
The Low Ongoing APR Credit Card – If you just want a credit card with a low or lower interest rate but you’re not in the mood to buy a Tiffany jewelry set or a yacht then yes, you’re better off with a low ongoing APR credit card.
Credit Card Offering Rewards / Reward Points – This is the most popular type of credit card. Although they have higher interest rates compared to other credit card types,
if you don’t mind paying more on finance charges in the hopes of winning something else later on then this type of credit card is the ideal one for you!
Credit Card Offers: Get The Best Out Of It
It seems adamant that the people of today are unable to get rid of the use of credit cards. The role of credit cards appears to be indispensable.
True indeed, purchases, payment of bills, and other important transactions are carried out these days through credit cards. The credit cards must not however be misconstrued with the nature of the debit cards.
The fact is that these credit cards can carry out transactions such as large and regular purchase methods although no specific amount is credited to the card itself.
As a rule, the issuer of the credit card works on a specific credit limit. There is always a predetermined maximum amount in which the owner of the card cannot exceed in every transaction.
Meaning, if the credit limit has been reached, other transactions will no longer be entertained unless the credit has been paid or if another credit extension has been granted to the user of the card.
Due to the fast growth of credit card users, the concerned companies compete with each other through the employment of various marketing strategies.
They combat with each other in this kind of business by means of offering several credit card offers to make the promotion deliciously appealing to the consumers. Among the major credit card offers are:
The interest rates. Most credit card companies secure the lowest interest rates in every single due payment. This goes to show that more consumers will get attracted to the offer. The interest rate goes in between 1.2% to 5% only.
The minimum amounts due. In each of the months, a credit card firm contains some percentage of amount which takes its basis from the charges or amount purchased incurred by the credit card user.
If the concerned party fails to pay the due in the designated time, additional charges will henceforth be faced.
The waiving of the dues. Credit card offers such as the cut off of either one or two periods of billing without extra charges heaped on the card owner is again another meaty offer.
The interest rate is hence waived if the consumer is able to pay in full and in advance his incurred dues for a particular transaction.
The extension card. There is always this credit card offer in which the principal credit card holder can apply for an extension card so that another person, usually a family member, can likewise enjoy the privileges of the credit card.
The balance transfers. Most of today’s credit card firms are able to give out low interest charges for the transfer of any balance from one card to another. This strategy is worked out so that a certain credit card firm can have the hold of the user’s loyalty.
Credit card offers are always pleasant to the eyes. More so, there are some particular advantages to be earned from using the credit card. First, there is a low chance of losing cash.
Just imagine yourself shopping at the mall but you don’t carry with you some cash to spend.
Second, credit cards are always easily available. In emergency cases such as purchasing medicine, credit card payments are always accepted.
Now you know how valuable credit card offers can be. You bet, in no time at all you will also entertain the thought of procuring one for your own.
Should You Sign Your Credit Card?
It sounds like a no-brainer. You receive your credit card in the mail, along with a note that tells you, among other things, to sign the back of your credit card immediately.
Lately, people have seriously questioned this course of action, pointing out that if your card is stolen, a thief then has a perfect copy of your signature to duplicate.
Instead, say many, in the space for your signature on a credit card, you should write ‘Ask for Photo I.D.’
It sounds like good advice. But what do the experts have to say?
According to all three major credit card companies – Visa, Master Card and American Express, the answer is – sign your credit card immediately.
In fact, all of them have rules that prohibit merchants from accepting credit cards that don’t have a valid signature. Visa states that a merchant may not complete a transaction UNTIL the card is signed.
Bottom line on the question of whether to sign your credit card, then, is yes, you absolutely SHOULD sign your credit card as soon as you get it.
But what about other security measures you can take to guard against credit card fraud?
Here are five security tips to help you safeguard your credit card security:-
1. Never give your credit card number to someone that calls you on the telephone.
If the caller purports to be from a company that you do business with, or from the credit card company itself, tell them that you’ll call them back at the number that YOU have for the company.
That way you’ll know that the person you’re speaking with is legitimate. If they demur at all, hang up immediately and call your credit card company’s fraud line with any details of the call.
2. Ditto for any email you receive asking you to ‘verify’ details for your credit card info by clicking on a link in the email to take you to a verification page.
If it’s a company with which you do business – PayPal for instance – open a new browser window and type in the URL to the legitimate site by hand.
3. Keep a separate low credit limit credit card for paying online – or use a credit card company that will provide one-time verification numbers.
That way if your credit card security is compromised, you’re losses are limited by the amount available on the card. Or – use a debit card that you keep just for online purchases the same way.
4. Reconcile your credit card bill every month just as you would your checking account. Go over the bill with your receipts, and report any charges for which you don’t have a receipt or don’t recognize.
5. If you have the option, register all your credit cards with a credit card registration service. In any case, write down all of your credit card numbers, expiration dates and contact telephone numbers for each card and keep it in a safe place.
If your wallet and credit cards are ever stolen, you’ll have a handy reference to make sure that you don’t miss anyone when you’re calling to report your credit cards stolen.
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