The Benefits of a Credit Card

A Credit Article Contributed by Shafia Nuzhat

Credit Card and Its Benefits

Remember, before credit cards, how we would see something in a shop's window -- too expensive to buy right away -- and we would just walk away? Never again thanks to the ubiquitous credit card. Credit cards help us buy goods up to a credit ceiling then pay in equal monthly installments -- for a small fee and a prevailing rate of interest. You now need not carry huge amount of cash if you have to buy something really expensive.

Nor do you have to worry about your checks bouncing from your bank account. Credit card payments are safe secure and prompt. They are plastic cards with scannable magnetic strips issued by a bank or a business, which allow the card-holder to purchase goods or services on credit.

Protecting Credit Card Information

You must always be careful about disclosing your credit card number or any other information. They may be misused if your card number is revealed to someone you do not know, which may result in expenses for the goods and services you haven't bought. Using credit card over the Web is safe only if you are assured of the security of your information from the Website you are making a payment at.

The most important part of your credit card is the last 3 digits of your credit card number, on the flip side of your card. Always use your card at places that offer you complete security of usage and your information.

Common Credit Cards

The most common credit cards acceptable worldwide include, Visa, MasterCard, American Express, Discover, and Diner's Club. Debit Cards are not same as Credit cards except in appearance. However some banks offer their customers Debit Cards, with a MasterCard or Visa logo. These debit cards are widely used and acceptable as a preferred method of payment.

However the most important difference between a credit card and debit card is that when you pay through a credit card you owe the amount you spent to the bank or the issuing authority. But in case of a debit card, you do not owe any money to the bank or the issuing authority. Debit cards withdraw funds directly from your checking account rather than being credit to your credit card account as credit.

Credit Card Variances

There may be variances among different types of credit cards, on various aspects, such as interest rates, international acceptability, fee, security, annual fees, payback terms, so on.

Credit cards by reputed banks and credit card issuing companies are issued only on the basis of excellent credit history and credit report. Some banks refuse issuance of cards if you have a poor credit history or do not have excellent, established credit. Remember that credit cards serve a definite purpose and are to aid your expenditure. Because applying for a credit card shows up on your credit report, multiple credit card applications can be negatively affect your credit rating.

Always have the number of cards you can manage. If you have too many cards, with equally huge of amount of credit card bill from each card, then chances if you sleeping peacefully are thin.

Choosing a Credit Card

Make sure you learn enough about how the credit card will work when you decide to apply for one. Check for the interest rate or APR (annual percentage rate), annual fees, the validity, the repayment options, etc. Enquire about its terms and costs before accepting to buy. Always shop around for the options that fit your needs the best. Ensure you understand the terms completely before you accept the card, never hesitate to ask questions to the credit card company representative.

Always keep your shopping bills intact so that you can reconcile/ compare the expenses with your credit card bills. This way you can avoid payments for the purchases you did not make and catch any discrepancy on time. Protect your cards and account numbers to prevent unauthorized use. Keep a record of your cards' information in a safe place and report a loss immediately to the issuer.

Credit cards are for your convenience, using and misusing it at your discretion, for it's easy to get into a financial difficulty by misusing them.