|
Know What Type of Card to Use |
|
|
Written by CreditCardsClub
|
Time was when getting a credit card was easy if you have the proper credit history to back your application approval. You only need to choose between Diners Club, MasterCard, VISA and AMEX cards. VISA and MasterCard cater to a larger market base that allows cardholders to make partial payments on their purchases. The other two are more charge cards (though they have evolved to credit cards) reserved to those who prefer paying their last month’s purchases in full and are often considered more prestigious to own.
These days the emergence and maturity of the cashless commercial world have created the preference towards plastic cards as the main mode of payment. Card companies and banks have started to offer credit and debit cards to a wider market that they didn’t have to in the past.
Debit or Prepaid Cards
You really have no choice but to accept the activation fees and transaction fees that go with using debit cards if you don’t have the credit rating needed to have a credit card or a checking account. Most debit card owners are students and the youth markets that need plastic cards to pay in retail outlets but have no credit history to quality for credit cards. The rest belong in the lower income groups who have botched their credit histories and could not qualify as well.
Debit cards will never put you into debt because you use the card as your deposit will allow. Unfortunately, these cards have no impact on your credit history whatsoever.
Credit and Charge Cards
It’s a no brainer to have them if you belong in the middle or upper class of society that demands cashless transactions with increasing prevalence. There are quite a number of credit card companies that offer the basic convenience of credit cards plus a few incentives for the right market segments. And some thinking may be needed if you plan to have your first credit card and qualify for one. The first thing to consider is how you plan to use the card.
If you have a large disposable income and can afford paying the full amount of your purchases, a charge card like Diners Club or AMEX is a good choice. No need to worry about finance charges but the cardholder can enjoy many of the perks offered by charge cards.
Airline or Traveler Credit Cards
For frequent travelers, an airline credit card co-branded with the major card brands can be a good choice especially when your purchases get mileage credits towards a free airline ticket or hotel accommodation.
Low Interest Credit Cards
If you are the type who like to make cash advances, do balance transfers or pay only the minimum monthly dues and leave balances in your account, check out the Annual Percentage Rates or APRs of various credit cards and you will note differences between them. The lower the interest rate is the better. Many new entrants in the credit card business do offer APRs that are lower than what established card brands offer. And most of them advertise introductory APRs that can benefit cardholders who prefer to pay minimum dues. Student credit cards are one of these.
|
|
Last Updated ( Friday, 08 February 2008 )
|
