Credit cards allow users to make purchases and pay for them later. The first general purpose credit card was introduced by Bank of America in the late 1950s. Major credit card brands like Visa and Mastercard were later established. Credit cards can help build credit history and provide flexibility but also carry risks like debt if not managed carefully. Different types of credit cards include standard, premium, secured, charge, specialty and prepaid cards, each with different fees and rewards structures.
Credit cards allow users to make purchases and pay for them later. The first general purpose credit card was introduced by Bank of America in the late 1950s. Major credit card brands like Visa and Mastercard were later established. Credit cards can help build credit history and provide flexibility but also carry risks like debt if not managed carefully. Different types of credit cards include standard, premium, secured, charge, specialty and prepaid cards, each with different fees and rewards structures.
Credit cards allow users to make purchases and pay for them later. The first general purpose credit card was introduced by Bank of America in the late 1950s. Major credit card brands like Visa and Mastercard were later established. Credit cards can help build credit history and provide flexibility but also carry risks like debt if not managed carefully. Different types of credit cards include standard, premium, secured, charge, specialty and prepaid cards, each with different fees and rewards structures.
Credit cards allow users to make purchases and pay for them later. The first general purpose credit card was introduced by Bank of America in the late 1950s. Major credit card brands like Visa and Mastercard were later established. Credit cards can help build credit history and provide flexibility but also carry risks like debt if not managed carefully. Different types of credit cards include standard, premium, secured, charge, specialty and prepaid cards, each with different fees and rewards structures.
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Credit card
DR. YAMINI SHARMA
D.M.S. What is Credit Card A credit card is a payment card issued to users as a system of payment. It allows the cardholder to pay for goods and services based on the holder's promise to pay for them. What is Credit Card The issuer of the card creates a revolving account and grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user. Credit Cards: A Brief History
The idea of lending money through a card goes as far back as the 1800s. According to the 2005 FDIC Banking Review's paper called "Overview of Recent Developments in the Credit Card Industry", merchants and financial intermediaries provided credit for agricultural and durable goods. The cards soon began to spread to other industries. Hotels and department stores presented their most valued customers with paper identification cards. The cards were mostly used at that one location; however, some local merchants would accept the competitors' card.
Credit Cards: A Brief History
It wasn't until the late 1950s that Bank of America (NYSE:BAC) introduced the Bank Americard, the first general purpose credit card. The bank created a separate credit card operation entity that in the mid 1970s became known as VISA (NYSE:V). In 1966, competing banks spawned rival cards as a result of Bank of America's success. This network of bank owners later created an association that came to be known as MasterCard (NYSE:MA).
Credit Cards: A Brief History
Throughout the years, the credit card industry has been the subject of much debate. On the one hand, many critics have blamed credit card issuers' loose restrictions for high fees and rates, which are often hidden in complex credit agreements. The deregulation of the industry that occurred in 1970s and 1980s is often blamed for this. However, in 2009, U.S. President Barack Obama signed a new bill into law to curb the most controversial credit card practices, including interest rate hikes, penalties and marketing to college students.
Charge Card V.S. Credit Card
Charge Card V.S. Credit Card Charge card are not for everyone instead of anybody can hold credit card easily. Charge card issuer charge yearly fees for the card but in case of credit card holder is not bound to pay any fee for card. A Charge Card requires the balance to be paid in full each month. In contrast, credit cards allow the consumers a continuing balance of debt, subject to interest being charged. Credit Card; Debit Card; ATM Card
Credit Card Credit card is a facility under which one can make purchases on credit(Payment is to be made 1-1.5 months of purchase) after getting bill from the credit card company. If bill is paid on due date, there is no interest on dues. Debit Card A Debit Card (also known as a bank card or check card) is a plastic payment card that provides the cardholder electronic access to his or her bank account(s) at a financial institution. Some cards have a stored value with which a payment is made, while most relay a message to the cardholder's bank to withdraw funds from a payee's designated bank account. The card, where accepted, can be used instead of cash when making purchases. ATM Card An ATM card (also known as a bank card, client card, key card, or cash card) is a payment card provided by a financial institution to its customers which enables the customer to use an automated teller machine (ATM) for transactions such as: deposits, cash withdrawals, obtaining account information, and other types of banking transactions, often through interbank networks.
How credit cards work Credit cards are issued by a credit card issuer, such as a bank or credit union, after an account has been approved by the credit provider, after which cardholders can use it to make purchases at merchants accepting that card. Merchants often advertise which cards they accept by displaying acceptance marks generally derived from logos or may communicate this orally. How credit cards work
Interest charges Credit card issuers usually waive interest charges if the balance is paid in full each month, but typically will charge full interest on the entire outstanding balance from the date of each purchase if the total balance is not paid. Interest charges For example, if a user had a 1,00,000 transaction and repaid it in full within this grace period, there would be no interest charged. If, however, even 1000 of the total amount remained unpaid, interest would be charged on the 1,00,000 from the date of purchase until the payment is received. The precise manner in which interest is charged is usually detailed in a cardholder agreement which may be summarized on the back of the monthly statement Types of Credit Cards Credit cards now are of various types with different fees, interest rates and rewarding programs. Different types of credit cards available by banks and other companies/organizations are briefly described below. Standard Credit Card Premium Credit Card Secured Credit Card Charge Credit Card Specialty Credit Card Prepaid Credit Card Limited Purpose Credit Card
Standard Credit Card: This is the most commonly used. One is allowed to use money up to a certain limit. The account holder has to top up the amount once the level of the balance goes down. An outstanding balance gets a penalty charge.
Premium Credit Card This has a much higher bank account and fees. Incentives are offered in this over and above that in a standard card. Credit card holders are offered travel incentives, reward points, cask back and other rewards on the use of this card. This is also called the Reward Credit Card. Platinum and Gold, MasterCard and Visa card fall into this category.
Secured Credit Card People without credit history or with tarnished credit can avail this card. A security deposit is required amounting to the same as the credit limit. Revolving balance is required according to the 'buying and selling' done.
Limited Purpose Credit Card There is limitation to its use and is to be used only for particular applications. This is used for establishing small credits such as gas credits and credit at departmental stores. Minimal charges are levied.
Charge Credit Card This requires the card holder to make full payment of the balance every month and therefore there is no limit to credit. Because of the spending flexibility, the card holder is expected to have a higher income level and high credit score. Penalty is incurred if full payment of the balance is not done in time.
Specialty Credit Card Specialty Credit Card is used for business purposes enabling businessmen to keep their businesses transactions separately in a convenient way. Charge cards and standard cards are available for this. Also, students enrolled in an accredited 4-year college/university course can avail this benefit.
Prepaid Credit Card Here, money is loaded by the card holder on to the card. It is like a debit card except that it is not tied up with a bank account.
Credit Cards: Pros You can use them practically everywhere, especially overseas. They can boost your purchasing power because they can be used to buy goods and services over the phone, through the mail and online. They provide financial backup in the event of an emergency, such as an unexpected healthcare cost, job loss or auto repair.
Credit Cards: Pros They allow you to purchase items and pay them off in monthly installments. They offer discounts at stores and rewards. For instance, when you make purchases using the credit card you can collect points; these points accumulate and can be used to get free items, such as airline tickets.
Credit Cards: Pros Some cards may offer cash back as an incentive to use the card. They can help build your credit history. They keep a record of your expenses, helping you to monitor your financial activities. Credit cards allow you the right to dispute billing errors and defective merchandise. They allow you withhold payments.
Credit Cards: Cons Credit cards can have their disadvantages, though, especially when they're used in an unwise manner. Some consumers feel compelled to spend more money than they have. Consumers may continuously roll over a balance for several months. When you default on credit card payments, you are charged with late fees and interest, increasing your debt load.
Credit Cards: Cons Carrying a large amount of credit cards also isn't too favorable in the eyes of lenders. Acquiring too much credit card debt can ruin your credit score. Studies have indicated credit card debt as a significant factor in consumer bankruptcies. Credit card fraud is a possibility.
Avoiding Credit Card Pitfalls 1.Keep track of your purchases by closely reviewing your monthly statements. 2. Have a budget and avoid overspending. 3. Make an effort to pay off credit card balances at the end of the month. 4. Make purchases with reliable companies and take extra precautions when making purchases online. 5. Report stolen cards immediately to the credit card company. Use safely and carefully
How to Raise your Credit Score: Proven Strategies to Repair Your Credit Score, Increase Your Credit Score, Overcome Credit Card Debt and Increase Your Credit Limit Volume 2