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Compare credit cards


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Compare credit cards

  1. 1. ==== ====To Compare Credit Card Offers and Find the Card Thats Right For You, please ====It may seem incredible, but credit card issuers clog the mails with over 2.5 billion offers invitingpeople to apply for a credit card. Even those who would not qualify for a conventional credit carddue to serious credit problems are now able to get one; some credit card issuers even specializein this particular type of market. And according to financial gurus, there are at least a billion creditcards in active circulation throughout the United States alone.Credit has been an economic cornerstone for some time now. Surveys show that the averageAmerican household is estimated to have at least twelve credit cards, including charge cards.While you may tend to think that one credit card is pretty much the same as the next, there are inactual fact distinct characteristics for each different credit card type. It is good to know thesedifference between the three different types of cards in the market: a bank credit card, a travelcredit card, an entertainment credit card (although nowadays the combined travel andentertainment card has become more common) and a retail credit card or house card.Bank Credit CardsYou have probably noticed that most credit cards bear either the logo of Visa or MasterCardtogether with the name of the bank. It would appear that the credit card has been issued by eitherVisa or MasterCard. That is not quite an accurate assumption: these two companies do not issuecredit cards directly to the consumers. Most of the credit cards on the market today are offered bythousands of banks around the globe. Each bank is linked to the credit card association, becauseare not allowed to issue any kind of card unless they are association members.Visa is a privately held membership association, although it is preparing to go public. It started asan association of banks in California and the West Coast. There are over 20,000 financialinstitutions in the membership rolls, and virtually all of them offer Visa Card. MasterCard is also amembership association, similar to Visa, and originally consisted of member banks in the East.A bank credit card is in reality a revolving credit line. When you receive your statement, you canpay all or part of your balance each month, run up the balance again and so on. Being a creditline, the account comes with a pre-determined credit limit that depends on key factors likedisposable income, credit history, etc. The credit limit can be as low as a $100 or as high as manythousands of dollars.It is possible for card holders to get themselves into trouble when they do not properly manage therevolving credit line. When you carry a balance instead of paying it off, the credit card issuer startscharging interest on that balance -- in some cases, this interest could be pretty steep. The interestrate varies widely, depending on who issued the card, but you could expect the average creditcard interest rate to be at about 18 percent.
  2. 2. For instance, if you carry forward a $1,000 balance for 12 months, you pay $180 in interest peryear or $15 every month. If you maintain a $1,000 savings account, you will earn about $40 ininterest per year. Those who get into trouble will have to reduce debt, and one of the morecommon ways to go about this, is to arrange for credit card debt consolidation, which helps lightenthe interest burden.Travel and Entertainment CardTravel and entertainment cards are similar to bank credit cards in the sense that holders cancharge purchases at various stores and locations. However, they are also different from bankcredit cards because they are offered directly by the credit card companies, namely, AmericanExpress and Diners Club.This credit card type was once accepted primarily at travel- and entertainment-related businessessuch as airlines, hotels, restaurants and car rentals. Nowadays, all other establishments, such asupscale department stores, gas stations and drugstores, accept them. Like any bank card, thetypical travel and entertainment card of today offers the menu of features that most credit cardholders have come to expect, such as frequent flyer miles, luggage insurance and collisioninsurance coverage on rented cars.A further difference between travel and entertainment cards, and bank cards, is that travelentertainment cards do not carry an extended line of credit. This means that you will are requiredto pay your outstanding balances in full, either within one or two billing periods, in order to for theaccount to stay current.Both travel and entertainment credit card providers, such as American Express and Diners Club,also deliver categorized summaries of expenses charged to the credit cards at the end of eachyear. This certainly is a convenience at tax time.House CardUnlike a bank credit card, and a travel and entertainment card, which you can use in manypurchase locations, a house card is accepted only at a particular store or stores within the samechain. House cards (also referred to as retail charge cards) are the second largest category ofcredit cards; major house issuers include department stores, oil and gasoline companies, andtelephone companies. Discover Card, once owned by Sears, was probably the biggest house carduntil it was purchased by a financial institution to become a distinct credit card company.Merchants are very much in favor of house cards as these cards are valuable in helping them toboth develop customer loyalty and enhance sales; you may appreciate the shopping conveniencethey give you. Just like bank credit cards, house cards give you a line of credit, with a limit thatvaries depending on your creditworthiness. For this reason, you may choose not to pay your creditcard bill in full each month. Note, however, that the majority of house cards charge fixed interestrates of between 18 and 22 percent annually; thus a house card is more expensive in terms ofinterest cost than a bank credit card.All types of credit cards involve costs when you use them. After knowing the different credit card
  3. 3. types, you may choose the credit card that best fits your personality and needs. If you have anumber of credit cards on your wallet, you may also consider discarding some.If you are the type who does not carry a monthly balance, you can have a credit card with noannual fee but make sure that there is a grace period on purchases. However, if you do carry abalance, it is wise to do away with a credit card that has the worst of the following:·High interest rates·Unfavorable interest calculations. A credit card may calculate interest charges based onaverage daily balance, not on the balance due.·No grace period. Some credit cards might charge interest from the date of purchase untilpayment date, even if you pay off your balance.·Nuisance fees. Try to do away with credit cards that have late-payment fees, over-limitfees, fees for not carrying a balance or only a balance below a certain level, or a percentage feeon your credit limit.The modern bank credit card was first introduced in the 1960s by the Bank of America; the traveland entertainment credit cards were both introduced in the 1950s. Much may changed since thenin terms of features and benefits, but the basic characteristics of each type of credit card haveremained the same.Richard Gilliland Provides Expert opinions and reviews to help you apply and choose the rightcredit cards.Article Source: ====To Compare Credit Card Offers and Find the Card Thats Right For You, please ====