Choosing the Right Credit Card
A Credit Article Contributed by Girish Katyal
Various Types of Credit Cards
Most common form of credit cards used are bank cards. These are issued by banks such as Visa credit cards, MasterCard credit cards and others. There are also credit cards which you can use at a particular or different branches of stores, departmental stores, petrol pumps, etc. and are directly issued by the respective stores or pumps etc.
There are also credit cards which are used during travel such as American Express. You can apply for any of the above mentioned credit card only if you satisfy certain terms and conditions laid down by the companies issuing them. The credit cards bearing a logo of MasterCard or Visa, etc along with the name and logo of the issuing company or bank are known as affinity cards.
The companies issuing these type of credit cards not only get there share of financial incentive but it also helps them to popularize their brand or products.
There are so many credit cards available in the market that choosing the correct one can be quiet a task.
Choosing a Credit Card
Choosing a right credit card from numerous credit cards available in the market is important for you. The terms and conditions laid down by various credit card issuing companies is to be looked at very carefully before choosing the right one. What kind of plans it offers and how much interest it charges, what are the annual fees and what is the credit limit offered by that company are some of the important questions that one must consider before opting for one.
Different types of credit cards offer different types of interest rates and choosing a right card can make a huge difference when you will pay your credit card bills.
Choosing a Credit Card with Best APR (Annual Percentage Rates)
APR stands for Annual Percentage Rates. It is the rate of interest relevant to purchases made by you using your credit card.
* Preliminary APR: The initial APR is applicable to purchases for a particular number of months or billing phases. Sometimes the rate of interest is applicable to balances transferred from other credit cards or companies to yours. The credit card issuing companies uses this APR to attract new customers. In some cases the interest of rate charged for cash advances is also equal to preliminary APR.
* Fixed APR: Credit cards with fixed annual percentage rate offer a fixed rate of interest which is not influenced by performance by different indexes which are used as economic indicator. The fixed can be changed, increased or decreased, by the issuer of the credit card according to the terms and conditions laid down in the credit card agreements. Although the credit card company is required by the law to give written notice to the card holders at least 15 days in advance before increasing the rate of interest.
* Variable APR: As the name indicates, the rate of interest charged changes as the economic indicator, or indices, used to determine the variable rate changes. Because the rate change is linked to the performance of the index, which may rise or fall, these plans are commonly called "variable rate" plans. The most commonly used index is the prime lending rate or prime rate.
