All about Credit Cards


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Insight on 5 types of Credit Cards

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All about Credit Cards

  1. 1. CREDIT CARDSWhat Types of Cards Are Available?Credit Cards: These cards are issued bybanks and give you line of credit. You usethe card to pay for items and services up toa certain total amount -- your credit limit.You receive a statement from the issuer eachmonth with a minimum payment due.Charge Cards: These are also called traveland entertainment cards and are a littledifferent from credit cards. Charge cards,such as American Express and Diners Club,have no credit limit. You can usually chargeas much as you want, but are required to payoff your entire balance when your billarrives.ATM Cards: ATM cards are issued by banks,essentially to give bank customers flexibilityin their banking hours. In most areas, youcan use an ATM card to withdraw money,make deposits, transfer money betweenaccounts, find out your balance, get a cashadvance, and even make loan payments atall hours of the day or night.Debit Cards: Debit cards are attached toyour savings or checking account that youhave established with a financial institution.Debit Cards combine the functions of an ATMcard and Checks. Debit cards can be used acheck payment for bills. When you pay witha debit card, the money is automaticallydeducted from your checking/savingaccount. Including your ATM withdrawals.There are 5 Types of Cards! INSIDE THIS ISSUE5 Types of Cards 1Credit Cards 2Charge Cards/ATM Cards/Debit Cards 3Prepaid Cards 4Miscellaneous Cards/Credit Cards for Bad Credit 5Thank page 6Prepaid Cards: These cards are for securedaccounts. You only spend what you deposit onthe card. It can be used just like a creditcard. These are also used for a teaching toolto help kids understand money.Regardless of what card is being used.There are fees involved.With any Debit/Credit card that you apply for,make sure to do your research, and it isrecommended to read the terms andconditions before filling out any applicationfor a card.Please see Great Articles on page 4
  2. 2. Page 2 Newsletter TitleCredit Cards:• Credit Cards are used all over the world,traveling, retail purchases, gas purchases,groceries, even pays bills and believe it or notsome use one credit card to make a paymenton another credit card. The average cardholder abuses the credit card, because wethink “what the hell”, I can pay for it next month.Sad reality is we never really pay off the creditcard. If you would like a good example and realeasy to understand how a CREDIT CARDREALLY WORKS. Go to watch the video called. “Credit Card DebtExplained with A Glass of Water”.• How Do Credit Card Companies CalculateCredit Card Interest Each Month? To calculatethe interest on your card each month, thelender multiplies the cards interest rate (theAPR) times your card balance. This will givethe interest for the entire year. The lender willdivide this interest calculated by the number ofmonths in the year, or 12.• Interest Rate: Interest rates on credit card planschange over time. Some are explicitly tied tochanges in other interest rates such as theprime rate or the Treasury Bill rate and arecalled variable rate plans. Others are notCredit CardsThe average credit card holder has atleast 2 to 3 credit card accounts.2012 over 1.5 billion consumers owna credit card. Almost half end uphaving Credit Debt for years.A caption describes the picture or graphic.explicitly tied to changes in other interestrates and are called fixed rate plans.• There are other fees that contribute to usinga credit card: Some have annual fees,charge for cash advances; IMPORTANT toread the terms and conditions of a creditcard before filling out an application.• College Students are the most vulnerable tothese types of credit cards. They go off tocollege, get a job and the next thing theyknow because they have a student loan/s;the big banks start sending them non-securecredit card offers. College students use thecards for books, clothes, and before theyknow it, they are in debt and calling home forhelp.College Students fall prey every year tothose Credit Card offers
  3. 3. Page 3Newsletter TitleA caption is a sentence describing apicture or graphic.CHARGE CARDS• A charge card does not extend credit to thecardholder whereas a regular credit card like aVisa or Mastercard does.• A charge card does not extend credit, bydefinition, you have to pay in full every month. Acredit card does not require that you pay in fullevery month. All that is required is that you pay theminimum balance. That is one of the ways creditcard issuers make money from you (via extendingcredit and earning interest).• Charge card charges an annual fee whereas mostregular credit cards have no annual fee (with theexception of some travel credit cards).• Charge cards normally come with a rewardprogram. For American Express, you get theMembership Rewards. For Diners Club, you getDiner Club Rewards. Regular credit cards caneither have rewards or not.ATM Cards DEBIT CARDS• An ATM (automatic teller machine) card is aform of debit card but you use it in a cashmachine by punching in your code number. AnATM card looks nothing like a credit card, hasno Visa or MC logos on it, and is only good formaking cash withdrawals from your checkingaccount at cash machines.• The ATM card is a little less dangerous if youlose it, since nobody can use it to drain youraccount without knowing your PIN (personalidentification number). Also, most banks limitthe amount of cash that can be withdrawn withan ATM card in a day. A VISA or MasterCarddebit card allows a thief clean out your entireaccount with one purchase.• A Debit Card is not a credit card. A debit cardlooks very much like a credit card and is treatedlike a credit card by most merchants but thepurchase is immediately deducted from yourchecking account. Instead of running up a billthat you pay at the end of the month, the debitcard runs down your checking account at themoment the sale is made. Merchants like thesebecause they get instant payment withoutworrying about bad checks.
  4. 4. Page 4 Newsletter TitlePREPAID CREDIT CARDSPrepaid Cards differ a lot from regular credit cards. When you apply for a regular unsecured credit card, you have to understandthings like APR, Grace Period, Method of Balance Calculations etc.Prepaid Cards have a whole set of different things to be aware of.Prepaid Cards have fees that need to be taken into consideration when applying, but no different than the interest rate, and feesthat come with a credit card.A Prepaid Cards can be used to deposit money, pay bills, make purchases, and withdraw cash at ATMs. Prepaid Cards allowsyou to buy things online and, depending on the policy of the particular company, even rent a car or book a hotel room.If youre wondering whether or not a prepaid card is right for you, it will help to know that prepaid cards have three primaryapplications: 1) As replacement checking accounts; 2) As financial literacy teaching tools; and 3) As check cashing alternatives.Below you will find an explanation of how prepaid cards serve these purposes and what you should look for when trying to findthe right prepaid card for each:• Replacement Checking Account: Pretty much everything you can do with a checking account/debit card can also bedone with a prepaid card; you just won’t have an actual checkbook. If you plan on using your prepaid card as areplacement checking account, either because the cost of your traditional checking account has risen or you cannot getapproved for a traditional checking account, you obviously want one that offers free direct deposit, ATM withdrawals,and online bill pay. In addition, if you are utilizing direct deposit, its fair to expect not to be charged any monthly fees.• Financial Literacy Teaching Tool: Loading your childs allowance onto a prepaid card is a good way to get them startedon the road to financial responsibility. Prepaid cards offer online account management, which allows you to review yourchild’s spending habits with them. You can also give them enough money to last a couple of weeks in order to instill theimportance of budgeting. Just getting used to making transactions with plastic will be a benefit as well.If you plan onusing your prepaid card as a financial literacy teaching tool, you’ll want a card that has a low monthly fee and no feesfor in-network ATM withdrawals or making purchases. In addition, you should avoid cards with inactivity fees or fees forcustomer service because you don’t want to get your child in the habit of having to make purchases or prevent themfrom asking questions.• Check Cashing Tool: Many people cannot utilize direct deposit, but need to cash paychecks nonetheless. Checkcashing stores tend to be expensive, so if you can find a prepaid card that allows you to load checks and withdraw cashfor free, that would save you a lot of money in the long run. If you plan on using your prepaid card in this manner, you’llmost likely need a card offered by a large national bank with nearby branches, like the Chase Liquid Card.Its important to note that if youre interested in building your credit history, a secured credit card is a much better option than aprepaid card. Some prepaid cards will allow you to apply for a short-term loan once you have met certain requirements, such asmaking two direct deposits on your prepaid account. If you are approved for this loan, then your payment history will be reportedto the three major credit bureaus.
  5. 5. Page 5Newsletter TitleThere are banks out there that offer cards thatare secure, or non-secure for consumers thathave BAD CREDIT. Things happen in life that wehave no control over and it can leave us with aBad Credit History. Bankruptcy, Divorce, IdentityTheft, Loss of employment, so many things canhappen that can destroy our good standings.These type of credit cards are used forconsumers who want to rebuild their credit. It isnot an easy road to take, but it is possible to startover again.Capital One Mastercard, Visa Platinum ( byCredit One Bank), First Progress PlatinumMastercard, Elite Mastercard, and the PrestigeMastercard, The Merrick Visa Card, and evenHarley Davison has a card to help rebuild.The Annual Fees for these cards range fromCREDT CARDS THAT WILL HELP YOU REBUILD YOURCREDIT.$29 - $99 a year. Harley Davison does NOT have anAnnual Fee.Only the Visa Platinum (by Credit One Bank) is anunsecure Credit Card, but it carries the highest annualfee, and a 23.99 interest rate.Do your Homework when getting ready toapply for any type of credit or loans. Readthat fine print. Read those Terms andConditions.Keep good track of your finances. Budgetyourself. Take control, because if you don’tbad things happen to our credit, and ourlives.MISCELLANEOUS CARDS• Department Stores – JcPenneys, Macy, etc• Hardware Stores – Home Depot, Lowes etc• Gift Cards – Restaurants, Visa, Mastercards etcAll cards come with some type of fee. You have todecide on what you are comfortable paying.Credit Cards, Debit Cards, ATM Cards, ChargeCards, Gift Cards, Phone Cards, they are alwaysgoing to be around. You just can’t avoid them. Geteducated about them. It’s the only way.
  6. 6. Prepaid CreditProfessionals thanks youFor becoming aSubscriber and looksForward to keeping youInformed.By Amy Susi
  7. 7. Prepaid CreditProfessionals thanks youFor becoming aSubscriber and looksForward to keeping youInformed.By Amy Susi