Know The Credit Card Company's Secrets!

Nowadays, almost everyone can get a credit card. Most people get offerings in the mail to apply for them all of the time! Many of these credit cards have very low introductory rates, but then shoot up later, often without you even realizing it! After all, who is going to read all of the fine print on the back of the application? Not many people! In a way, it almost seems deceiving.

The most favorable credit card rates can be found in mid-size regional banks. If a person has a decent credit card history, he or she can apply for a "better rate" card - even if the bank is out of state. They won't come to you though; you have to go to them to apply.

Start by looking at the mid-size banks in your area. If their rates are all too high, you can explore other banks in other low interest states. One thing to keep in mind when doing your research for low interest states; don't assume that every bank in these states will give you a low credit card rate. Sometimes banks will move their credit card operations to higher rate states that have less restrictive interest regulations. Make sure you find out the credit card rates after you've located a lower rate bank!

Another "secret" that the credit card people don't want you to know is that many of the high-fee, high interest banks try to entice and sign up potential credit card holders by offering special credit card enhancements. These extra services can be almost anything; ranging from insurance and catalog shopping discounts to travel services and rental car discounts. They will also offer "deals" on anything that you can think of, from new cars to pest control!

The reality of these offerings is that you can find just as good or better prices in the city where you live. People living in rural areas might like the idea. But these folks generally can drive to the nearest large city, or shop online for the same savings. These credit card enhancements are usually not worthwhile, and you're still paying those high interest rates!

Remember when using your credit card, that the costliest cash is when you use your card for a cash advance. You will get no "float" or grace period (during which your cash advance or loan is effectively interest-free), and an extra fee will be tacked on to your usual interest charge! If you really need the money it would be cheaper in the long run to take out a collateralized bank loan, even if it will probably be more trouble to arrange.

Use these tips to look around for a lower interest rate credit card from a low interest bank. Don't just sign up for any credit card, especially from the offers you receive in the mail, without first learning what the interest rates will be. If you are careful, and shop around, you should be able to secure a credit card with a rate that you can live with.

Article Source: Credit Card Guide

History of Credit Card

Let's start at the beginning. A credit card is a thin plastic card, usually 3-1/8 inches by 2-1/8 inches in size, that contains identification information such as a signature or picture, and authorizes the person named on it to charge purchases or services to his account -- charges for which he will be billed periodically. Today, the information on the card is read by automated teller machines (ATMs), store readers, and bank and Internet computers.

According to Encyclopedia Britannica, the use of credit cards originated in the United States during the 1920s, when individual companies, such as hotel chains and oil companies, began issuing them to customers for purchases made at those businesses. This use increased significantly after World War II.

The first universal credit card -- one that could be used at a variety of stores and businesses -- was introduced by Diners Club, Inc., in 1950. With this system, the credit-card company charged cardholders an annual fee and billed them on a monthly or yearly basis. Another major universal card -- "Don't leave home without it!" -- was established in 1958 by the American Express company.

Later came the bank credit-card system. Under this plan, the bank credits the account of the merchant as sales slips are received (this means merchants are paid quickly -- something they love!) and assembles charges to be billed to the cardholder at the end of the billing period. The cardholder, in turn, pays the bank either the entire balance or in monthly installments with interest (sometimes called carrying charges).

The first national bank plan was BankAmericard, which was started on a statewide basis in 1959 by the Bank of America in California. This system was licensed in other states starting in 1966, and was renamed Visa in 1976.

Other major bank cards followed, including MasterCard, formerly Master Charge. In order to offer expanded services, such as meals and lodging, many smaller banks that earlier offered credit cards on a local or regional basis formed relationships with large national or international banks.

How To Benefit From Using Credit Cards

It is simple really, as far as taking care of plastic cards is concerned, yet so many of us abuse the flexibility of the credit card. Usually, this is due to paying off debts or extraneous spendthrift activity. If this applies to anyone then it should be a firm decision to simply stop using the card, or find ways to make the card work better. That is to say, other than being a financial sinker for the wallet after a few years of constant spending.

Most of us are aware of how hard it can be to avoid using the plastic credit pals like Visa or Master Card when its time to pay the fiddler. It is right there in wallets upon entering shops. ‘Hey, I’ll take one of those, no cash in my wallet, but I have my trusty plastic buddy.’ This is probably a very familiar thought, and not one secluded to the husband’s spouse on a weekend shopping spree. Let us face it, all people will spend more than they can afford at some point in their lives. These helpful hints on the use of credit cards will help avoid unpleasant debtors:

• Do not let the balance build.
  Ensure that the outstanding amount is paid off quickly, or the card will suffer interest penalties. Not to mention the insurance, if the option for insuring the payments against unexpected unemployment, as this can really add up. This accrued interest will be noticed once the card is used often, and a hefty debt rears its ugly head.

• Many credit cards offer rewards to the consumer that can be spent on travel, discounts, and other ‘rewards through points’ programs.
  Many of the leading brands will support this point system. Examples are City Bank, Standard Chartered, ICICI and American Express.

• If the credit card currently owned has a high interest rate – get rid of it.
  Transfer to a card offering 0% for 6 months, or even some others that give a year. Heavy credit card users will notice the benefits of this simple manoeuvre over an annual period.

• Recognise and stay within personal limits.
  Use the amount of household income as a frame of reference to establish this. How much can be spent on the card before monthly bills exceed monthly expenditure? That magic word, or bane of family life, called Christmas soon comes. This is when most people tend to go ballistic and attack the trusty credit card. Care should be taken to ensure that limits are withheld. Spendthrifts do not understand limits, and should avoid credit cards at all costs until cured of the spending bug.

• Avoid applying for too many cards, as payments can become difficult.
  Measure the monthly income against the card limits. If they almost match, or the household income monthly falls below the card limit, a good general rule is to only possess one - or at the most - two cards. This may sound generic and too simple. Work it out. If the card is maxed, and the income falls below that amount, the card will be demanding a hefty minimum payment which may mean that there is no further flexibility on the card as it is maxed, plus there is a staggering minimum amount to pay now.

• Avoid late payments.
  Pay the minimum amount plus more. If you cannot manage more, just pay the minimum, but this means that card usage should cease until available income has increased. Always try to pay the debt off completely or as much of it as possible rather than just paying the minimum amount monthly.

• Find a card that is useful when needed.
  Don’t just take a card because it has a Rs1,00,000 limit; question that - ‘Do I need that much’ and ‘what will I specifically need the card for??’ These are important questions. If discipline is a problem, the card will become a problem. Take care and use it for needful things and not as a daily spender. That is the path to debt doom…

Use credit cards wisely, and they will be a versatile friend. Do this not, and they will become apostates of hell. Be wise, and be sensible, and credit cards will always be a useful aid for every financial need.

Article Source: Credit Card Guide

A Credit Card Can By Very Useful

Many people shudder at the thought of getting a credit card. To some, a credit card means debt and financial instability. But a credit card can actually be a very useful thing to have.

A credit card is a plastic card with a magnetic strip that can be swiped and used as payment for a good or service. There are four major credit card companies, however nowadays many department stores and private institutions offer their own credit cards. The credit card company will evaluate each individual on their past credit history in order to determine the limit that the card may carry. Once the card reaches its limit, no more purchases can be made until the balance is paid down.

A credit card is not necessarily designed to send people into debt, or to allow them to live beyond their means. Having a credit card will allow a person to carry less cash in his wallet, which could easily be lost or stolen. If a credit card is lost or stolen, most credit card companies will not hold the card owner responsible - whereas cash would be gone forever.

Credit cards are convenient. Most places nowadays take credit cards, including all of the major fast food restaurants. Credit cards allow people to pay at the pump when getting gas. This allows them to avoid the line inside the gas station or to stay in the car in the rain or freezing, cold weather. Most online purchases are made via credit card, which permits the transaction to process immediately. Having a credit card allows a person to track all of their purchases easily without having to manually record them in a checkbook. Many bills such as cable or phone bills can be charged automatically to a credit card, eliminating the need to write a check and send payment in the mail.

Credit cards can also save the user money. Many credit card companies compete for business by offering incentives for using their card. Some companies offer airline miles or gifts, after a certain amount of points are accumulated on qualified purchases. Other companies simply give cash back based on the amount charged to the card. Credit card companies charge the merchant for every transaction, and as a result they can pass some of those earnings to the user.

Having a credit card also allows a person to establish a credit history. Before making a major purchase such as a car or house, a credit check must be run. If there is no credit history to verify, the loan may be refused. A credit card can prove that the person is capable of paying their bills on time.

It is important to avoid going into debt by overusing a credit card. Credit card companies make a lot of money off people who charge excessively and accumulate a lot of interest charges. Credit cards should be paid in full each month if possible. Paying only the minimum balance is not recommended, as this will only create more and more debt. If used responsibly and occasionally, a credit card can be of great value.

Article Source: Credit Card Guide