With so many different cards advertised via every possible medium, and with all those unsolicited credit card applications choking your mailbox, narrowing down your options may be a bit overwhelming. Having too many cards lowers your credit score, even if most of your cards show a low or zero balance.
Basic Credit Card Types
Your three basic credit card types are: bank cards, travel and entertainment (T&E) cards, and house cards. Automatic Teller Machine (ATM) cards and debit cards are linked to your existing bank accounts (checking and/or savings) and should not be confused with credit cards.
Bank Cards
Bank cards are issued by, you guessed it, banks. Visa,MasterCard, and Discover are the most popular and widely accepted types of bank cards. Bank card rates are set independently by the banks issuing them, so don’t make the mistake of thinking that all Visas or all Master Cards are alike. In addition to having to choose between banks to get the best rates, within the bank card
category lies several credit card subcategories from which to choose: affinity cards, secured cards, and unsecured cards.
AFFINITY CARDS
An affinity card typically is a Visa or a MasterCard that carries the logo of an organization (such as Harley Davidson, Yahoo!, Disney, etc.) in addition to the emblem of the card. You basically are getting a card with someone’s logo on it. The organization solicits all of its members to get cards, with the idea of keeping its name in front of the card users and, hopefully, keeping card users loyal to it for future purchases, membership, and/or donations. There are some credit card companies that even offer a “design your own” card service, I guess so you can put the object of your affection on your credit card.
SECURED CARDS
Secured cards require you to make a bank deposit up front as security against charges on the card. The limit on the card usually is set by the amount of the deposit. Typically, the contract is written in such a way that the issuing bank maintains the right to take money from your “security” deposit if you don’t pay your bill. Secured cards usually are sold to people who have credit problems and can’t get a regular “unsecured” card but still need credit. But a secured card from a bank may be a good deal for anyone. You may want a secured card even if you can get an unsecured card. Why? Since a secured card represents less risk to the bank, interest rates may be lower than for an unsecured card. A secured MasterCard or Visa looks just like a regular one and the law ensures that it has all the same consumer protections. When evaluating a secured card, use the same criteria as for any other card, and ask the bank some additional questions such as:
�� What interest rate is paid on the deposit?
�� Is there an annual fee?
�� If I maintain a good credit record, will I be considered for an unsecured (“regular”) card? Binding arbitration. If you sign something which agrees to settle all disputes with binding arbitration, you are basically waiving your right to have your day in court. Many credit card companies have taken unfair advantage of their customers by insisting on this practice.
UNSECURED CARDS
You probably won’t hear the term “unsecured card” often because, in terms of credit cards, these are the norm. “Unsecured” means that the bank can’t take specific assets of yours in the event that you don’t pay your bill, but rather would have to sue you or force you into bankruptcy to collect. A “regular” card is unsecured.
Travel and Entertainment (T&E) Cards
American Express (AMEX), Diners Club, and their kin originally were aimed at the more upscale “travel and entertainment” market. They are accepted at many places, though not as many locations as Visa and MasterCard. Some places don’t take MasterCard and Visa but do take AMEX or Diners Club. Unlike bank cards, rates on T&E cards do not vary. One AMEX green card is like all other AMEX green cards in the country (although corporate AMEX card rates may vary from personal card rates).
Most “corporate cards” fall into this category, and typically are issued to certain employees of a company for the company’s convenience in managing travel expenses. As the holder of a corporate card, there are a couple of possible concerns:
�� You may be individually responsible for charges to the card, even though you use it only for business purposes. This can be a problem if your company is very slow to reimburse you for expenses.
�� Corporate cards may not have the same buyer protections (like an extended warranty) that personal cards offer.
House Cards
House cards are good only at the stores of one chain. Sears is the biggest one, followed by the oil companies, the phone companies, and your local department stores. Like T&E cards, national house cards (like Sears) have the same terms and conditions wherever you apply.
ATM Cards and Debit Cards
ATM CARDS
An ATM Card is used to withdraw (or deposit) funds from your bank account by punching in your code number (PIN—personal identification number) at a cash machine. An ATM card looks nothing like a credit card and has no Visa or MasterCard logo on it.
DEBIT CARDS
A debit card looks very much like a credit card (with Visa or MasterCard logos), and is treated like a credit card by most merchants, but the charge is immediately deducted from your bank account. Therefore, as its name implies, a debit card is not a credit card. Instead of running up a bill that you pay at the end of the month, the debit card runs down your bank account the moment the sale is made.
Merchants like these because they get instant payment without worrying about bad checks. Some consumers prefer them because they can only spend the money that is available in their accounts, avoiding the temptation to overspend on credit. Debit cards are convenient but they do have drawbacks. It is a lot more painful to resolve a problem with a purchase if the money is gone from your account (as with a debit card) than if it’s just numbers on a piece of paper (as with a credit card).
******Usman ahmed owner of this blog created this post with his knowledge.All content provided on this blog is not copied from any other blog and site and is for informational purposes only and The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information.
Basic Credit Card Types
Your three basic credit card types are: bank cards, travel and entertainment (T&E) cards, and house cards. Automatic Teller Machine (ATM) cards and debit cards are linked to your existing bank accounts (checking and/or savings) and should not be confused with credit cards.
Bank Cards
Bank cards are issued by, you guessed it, banks. Visa,MasterCard, and Discover are the most popular and widely accepted types of bank cards. Bank card rates are set independently by the banks issuing them, so don’t make the mistake of thinking that all Visas or all Master Cards are alike. In addition to having to choose between banks to get the best rates, within the bank card
category lies several credit card subcategories from which to choose: affinity cards, secured cards, and unsecured cards.
AFFINITY CARDS
An affinity card typically is a Visa or a MasterCard that carries the logo of an organization (such as Harley Davidson, Yahoo!, Disney, etc.) in addition to the emblem of the card. You basically are getting a card with someone’s logo on it. The organization solicits all of its members to get cards, with the idea of keeping its name in front of the card users and, hopefully, keeping card users loyal to it for future purchases, membership, and/or donations. There are some credit card companies that even offer a “design your own” card service, I guess so you can put the object of your affection on your credit card.
SECURED CARDS
�� What interest rate is paid on the deposit?
�� Is there an annual fee?
�� If I maintain a good credit record, will I be considered for an unsecured (“regular”) card? Binding arbitration. If you sign something which agrees to settle all disputes with binding arbitration, you are basically waiving your right to have your day in court. Many credit card companies have taken unfair advantage of their customers by insisting on this practice.
UNSECURED CARDS
You probably won’t hear the term “unsecured card” often because, in terms of credit cards, these are the norm. “Unsecured” means that the bank can’t take specific assets of yours in the event that you don’t pay your bill, but rather would have to sue you or force you into bankruptcy to collect. A “regular” card is unsecured.
Travel and Entertainment (T&E) Cards
American Express (AMEX), Diners Club, and their kin originally were aimed at the more upscale “travel and entertainment” market. They are accepted at many places, though not as many locations as Visa and MasterCard. Some places don’t take MasterCard and Visa but do take AMEX or Diners Club. Unlike bank cards, rates on T&E cards do not vary. One AMEX green card is like all other AMEX green cards in the country (although corporate AMEX card rates may vary from personal card rates).
Most “corporate cards” fall into this category, and typically are issued to certain employees of a company for the company’s convenience in managing travel expenses. As the holder of a corporate card, there are a couple of possible concerns:
�� You may be individually responsible for charges to the card, even though you use it only for business purposes. This can be a problem if your company is very slow to reimburse you for expenses.
�� Corporate cards may not have the same buyer protections (like an extended warranty) that personal cards offer.
House Cards
House cards are good only at the stores of one chain. Sears is the biggest one, followed by the oil companies, the phone companies, and your local department stores. Like T&E cards, national house cards (like Sears) have the same terms and conditions wherever you apply.
ATM Cards and Debit Cards
ATM CARDS
An ATM Card is used to withdraw (or deposit) funds from your bank account by punching in your code number (PIN—personal identification number) at a cash machine. An ATM card looks nothing like a credit card and has no Visa or MasterCard logo on it.
DEBIT CARDS
A debit card looks very much like a credit card (with Visa or MasterCard logos), and is treated like a credit card by most merchants, but the charge is immediately deducted from your bank account. Therefore, as its name implies, a debit card is not a credit card. Instead of running up a bill that you pay at the end of the month, the debit card runs down your bank account the moment the sale is made.
Merchants like these because they get instant payment without worrying about bad checks. Some consumers prefer them because they can only spend the money that is available in their accounts, avoiding the temptation to overspend on credit. Debit cards are convenient but they do have drawbacks. It is a lot more painful to resolve a problem with a purchase if the money is gone from your account (as with a debit card) than if it’s just numbers on a piece of paper (as with a credit card).
For The User
******Usman ahmed owner of this blog created this post with his knowledge.All content provided on this blog is not copied from any other blog and site and is for informational purposes only and The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information.
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