mortagesandforeclosures

by Bob Jones

The commencement of the electronic age has made almost everything more possible. Diagnosing and curing previously deadly illnesses became widespread; reaching uncharted territories became a possibility and most of all, people's everyday lives was made easier by technology. We now have more convenient stores, more comfortable means of transportation and a variety of gadgets that makes work and pleasure almost effortless.

When it comes to the technology of finance, an efficient banking system and efficient services have given people better alternatives and options with which to manage their finances. Among the so many financial management schemes that emerged, one stands out above the rest - the credit card.

Credit cards, especially to working people and those who lead very busy lives, have become the ultimate financial saviour. More than just being a status symbol or an accoutrement to expensive purses and wallets, credit cards have revolutionized the way people spend their money.

But, more than the glamour and the convenience credit cards bring, there is much more to these bank cards than most people could ever think.

Credit Card 101: Before entering into the very long list of the pros and cons of having a credit card, it is very important for people to understand just what a credit card really is, in order for them to maximize its potential.

In layman's terms, a credit card is something that allows a person to make purchases up to the limit set by the card issuer. One has then to pay off the balance in installments with interest. Usually, credit card repayments are monthly and vary from the minimum amount set by the bank to the entire outstanding balance. And since it is a form of business, the longer the credit card holder waits to pay off his or her entire balance, the more interest piles up.

Since having a credit card is a responsibility, only those people who are of legal age and have the ability to pay off the amount they are going to spend through their credit card, is allowed to have one. Actually, most of the adults in the U.S. use credit cards, because it is very convenient compared to using cash or checks every time they have to purchase something.

It is equally important to be cognizant of the different types of credit cards before you begin to build up credit card debt in order to avoid having a large amount of debt. Since credit cards are indispensable to most of their users, it is a must that they understand the sorts of card that include charge cards, bankcards, retail cards, gold cards and secured cards. All of these kinds of cards come with one or two interest rate options: fixed and variable rates.

If you decide to take a fixed-rate credit card, the interest rate stays the same throughout the period, compared with variable rate cards where the rate will change depending on the credit card issuer's terms. Fixed-rate cards often carry higher interest rates.

Basically, credit card suppliers usually offer three types of accounts with basic account agreements such as the 'revolving agreement' also called the 'Typical Credit Card Account' which allows the user to pay either in full monthly or prefer to receive partial payments based on the outstanding balance.

While the Charge Agreement requires the payer to pay the full balance every month so they won't have to pay any interest charges. The Installment Agreement, on the other hand, asks the payer to sign a contract to repay a fixed amount of credit in equal payments over definite periods of time.

Another category of credit card account includes the individual and joint accounts where the former requires the individual alone to repay the debt and the latter requires the partners to pay together.

Now that you have an idea of how many types of credit cards there are, it is time to review your goals before applying for one. Some of the things you should think about is how you will use the credit card. If you plan to carry a balance at the end of the month, how much are you willing to pay in annual fees, if you have a strong credit history and if your credit in need of rehabilitation.

Once you have an idea of what you are looking for, pick the right credit card for you by looking for the information you need. You can also check the credit cards you've checked out and compare them.

Are you shopping for a credit card? Regardless of the type of credit card you choose, be certain to discuss your specific financial needs with your financial advisor or accountant before applying for any credit card. It is a must that you know the benefits of using a credit card like safety, valuable consumer protections under the law, support and the accessibility and availability of services.

Although having a credit card is considered synonymous with financial security, this can also trigger a person's thirst for material things and may lead to the temptation to buy something they don't really want. A credit card holder should always bear in mind that having a credit card is a big responsibility. If they don't use it carefully, these may owe more than they can repay. It can also damage their credit status report, and create credit repair problems that are quite difficult to put right.

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