Credit Card Meaning

Credit Card Meaning : Credit Card, Today we will know about Credit Card, Credit Card Meaning, How to apply for credit card?, What is a credit card statement?, benefits of credit card, Basic Things You Should Know About Credit Card Debts So, this article is very important for every credit card users.

Credit Card Meaning

Credit cards is an essential financial tool that enables its holders to make purchases and have the luxury of paying back the amount later. A credit card comes with a bank-approved credit limit, and the holder must pay back the amount due on the due date, which is mutually decided by the bank and the holder.

What is Credit Card

Credit Card is an instrument to help you make instant credit based transactions. Unlike debit cards which are linked to your bank accounts and debit the corresponding amount for every transaction, credit cards offer you the flexibility to make transactions on credit independent of your account balance. These amounts however are repayable at the end of a pre-specified credit period, and each credit card involves a credit limit beyond which transactions cannot be made.

How to apply for Credit Card?

Alternately, you can also apply for a Credit Card Online on the bank’s website by following these steps Never forget any steps to Credit Card Apply Online:

  • Step 1: First of all Visit the official website of Credit Card Providers bank’s.
  • Step 2: After that Explore the Credit Cards offered by the bank.
  • Step 3: Use the comparison tool if available to compare their features and benefits
  • Step 4: Select the Credit Card that is the right one for you and hit the ‘Apply’ button.
  • Step 5: Fill in the required details and upload all necessary documents.
  • Step 6: Submit your form.
  • Step 7: After submit your Credit Card form, Credit card provider bank check your documents and then approved your credit card.

I know after follow this above steps you can easily gate Credit Card, If any confusion you can comment below also.

Note: Each bank may have a different application procedure. Visit the bank’s website for more details regarding how to apply for their card online.

Benefits of Credit Card

The main benefit of Credit Card to the cardholder is convenience. Compared to debit cards and checks, a credit card allows small short-term loans to be quickly made to a cardholder who need not calculate a balance remaining before every transaction, provided the total charges do not exceed the maximum credit line for the card.

There are lots of benefits Credit Card, Some important benefits of credit card is given below.

  • One-Time Bonuses
  • Cash Back
  • Rewards Points
  • Frequent-Flyer Miles
  • Safety
  • Keeping Vendors Honest
  • Grace Period
  • Insurance
  • Universal Acceptance
  • Building Credit
  • Financial benefit is that no interest is charged in the case when the full balance is paid within grace period.
  • Many credit cards offer rewards and benefits packages, such as enhanced product warranties at no cost, travel rewards, free loss/damage coverage on new purchases, various insurance protections, for example, rental car insurance, common carrier accident protection, and travel medical insurance.

Types of Credit Card

  • Plain-Vanilla Credit Cards
  • Balance Transfer Credit Cards
  • Rewards Credit Cards
  • Student Credit Cards
  • Charge Cards
  • Secured Credit Cards
  • Subprime Credit Cards
  • Prepaid Cards
  • Limited Purpose Cards
  • Business Credit Cards
  • 0% intro APR credit card
  • Cash back rewards credit card
  • Gas rewards credit card
  • Travel rewards credit card
  • Unsecured credit card
  • Premium Rewards Cards
  • Retail Credit Cards

Advantages and Disadvantages of Credit Card

Credit Card Meaning

Advantage Of Credit Card

  • One-Time Bonuses
  • Cash Back
  • Rewards Points
  • Frequent-Flyer Miles
  • Safety
  • Keeping Vendors Honest
  • Grace Period
  • Insurance
  • Universal Acceptance
  • Building Credit
  • Financial benefit is that no interest is charged in the case when the full balance is paid within grace period.
  • Many credit cards offer rewards and benefits packages, such as enhanced product warranties at no cost, travel rewards, free loss/damage coverage on new purchases, various insurance protections, for example, rental car insurance, common carrier accident protection, and travel medical insurance.
  • Paying for purchases over time
  • Convenience
  • Fraud protection
  • Free credit scores
  • Price protection
  • Extended warranty coverage
  • Travel benefits
  • credit card is safer than carrying cash
  • Credit cards work in any currency
  • Credit cards give you an emergency line of credit

Disadvantage Of Credit Card

  • Paying high rates of interest
  • Credit damage
  • Credit card fraud
  • Cash advance fees and rates
  • Annual fees
  • Credit card surcharges
  • Other fees can quickly add up
  • Overspending
  • Credit rating
  • Security
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Advantages of using a credit card

  • Improving your credit score
  • Buying now to pay later
  • Spreading purchases out
  • Having purchase protection
  • Interest free spending
  • Getting cashback, benefits and rewards
  • Cutting down your debt

Disadvantages of using a credit card

  • Limited usage
  • Fees and charges
  • The possibility of debt
  • Your credit score

Basic Things You Should Know About Credit Card Debts

Credit card debt cannot surprise anyone, who have credit cards and use them nowadays. Modern banking system advertises credit cards as the easiest and the fastest way of making any possible payment all over the world. All you need to do is to give your Visa or Maestro card to a shop assistant if you are abroad, or any other credit card and the needed sum will be immediately withdrawn from your credit card account. You can pay for anything with your credit card – there are no restrictions. Be that the middle of the night and any geographical location, your card is still valid and can come in handy, which is its main advantage. You can make payment with your credit card on the Internet as well. You credit card is available 24/7 wherever you are and whatever you want to buy. It is very comfortable thing to use and everybody use credit cards because of it. However, as well as in any other situation, which seems to be too good to be real, credit cards have a number of pitfalls and we are just about to talk about them.

As you understand, all banks would have already collapsed if they worked for nothing. It would be stupid to think that bank work just to satisfy your needs and to make your life so good and comfortable. Nonsense. We have to pay for everything that makes our lives so great. Do not believe if someone tells you that modern world is perfect enough to make your life heaven. The only advantage of credit card is the possibility to lend money from it and all reasonable people understand this. You could use cash as well as plastic card and it would not take more space in your wallet than credit cards do. So, why dp people use these credit cards then if not for lending money? The first reason is the fashion. It may sound stupid, but the fact remains the same. People love to use things if it is fashionable and it is twice as great if you have a good explanation to it. Why do you use a credit card? Because it doesn’t take so much place in my wallet and I can be sure that I have some money in case of emergence. Sounds quite reasonable, but. Something is wrong about these credit cards and this wrong side is temptation. You can be easily temped to get more money from your card even if you know that you are going to get into debts. However, the end of the month is going to be real hell, because you will find out that your salary is too small to cover your debts, which will be growing from month to month not to mention interest charged on the debt. So, if you do not want to become a debt-victim, avoid using credit cards and do your best not to get tempted by lending money from them. Be safe!

Credit Card Basics

Electronic payment methods are quickly becoming the world’s primary source of currency, and gradually, credit card debt is becoming the primary form of debt. Staying informed and making responsible decisions about your credit is your biggest weapon against falling into a cycle of increasing debt. For further information about credit cards, and some basic tips and knowledge, keep reading, and share this wealth of information with friends, family and co-workers.

Interest Rates: Interest rates or APR are a basic element of any credit card account. This is your cost to borrow money. If you maintain an unpaid balance on your card at the end of the billing cycle, you are charged interest on that remaining balance. This charge is applied directly to your balance increasing what you owe. Credit card interest rates can be quite high, over 25%. To save on these charges try to pay off your balance in full each month.

Regular credit cards will have a minimum finance charge, usually $0.50. If the calculated interest on your remaining balance is less than the minimum charge, then you will be charged this minimum. Therefore, if your remaining balance was but $1.00 you would be charged $0.50 in interest. That calculates to 50% interest.

Although most credit card offers today come with a variable interest rate, a few still offer a fixed rate. Variable rates adjust periodically, usually based on the prime rate set by the Federal Reserve. Fixed rates change much less often. Fixed rates can change but the credit card issuer must first notify you in writing before a change can occur.

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Many credit card offers come with a 0% introductory APR. However this rate will disappear in 90 or 180 days when the introductory period ends.

Fees :Yet another important element in the standard credit card account is the type of fees you’ll be expected to pay. There are plenty of no fee cards out there for people with good credit. However, people with blemished or no credit history will likely have an annual fee, or semi-annual fee, and sometimes application fees. Be sure to ask whether or not you’ll be expected to pay a fee, and if so, the amount. Many card issuers will drop the fee if you have been a good customer for a while. It’s worth asking about.

A word of caution: Credit card fees are added to the balance you owe as soon as the card is opened. These fees immediately reduce your available credit and create debt. Bear in mind that annual and semi-annual fees will reoccur. This can be a burden on those with limited incomes. The sooner you can get a no fee card or get the credit card company to drop the fees, the better off you’ll be. Do investigate offers and ask questions before signing up.

Rewards, Rebates, Incentives: A popular element of a credit card account is the rewards, rebates, and incentives that the credit card company offers with your particular contract. There are several systems of rewards available such as airline miles, gas/vehicle benefits, for a couple of examples. Others are cash back, or cash rebate credit cards that offer rebate percentages that are higher for some purchases than others. These programs may credit rebates back to your account, or send your rebate as an annual checks, or in some way pay you back on the amount of purchases you’ve made with your credit card.

Aside from credit cards that focus on cash rebates, other rewards cards accumulate either points, or air miles. Points can be redeemed for discounts, free services, vacations, travel packs, free hotel stays, and other limitless types of rewards. Miles are usually reserved for travel via airline, as of now, but who knows when they’ll introduce miles for AmTrak or other modes of transportation.

Grace Period :Grace period is the number of days the credit card company gives you to pay back your balance as of the billing statement date. Twenty to twenty-five days are common grace periods. The rules are simple. You do not have to pay interest or finance charges on the portion of your balance paid before the end of the grace period. Interest must be paid on any part of your balance not paid by the end of the grace period. Note that grace periods might not be offered for cash advances.

How to Choose Best Credit Card in USA

There are several categories of credit cards out there for several different levels of credit. Finding the right credit card means first reviewing your goals and your personal credit level. If you have limited or no credit, it won’t do you very much good to apply for high credit line cards. On the other hand, something like a secured credit card would not be desirable for someone with an excellent credit history. Be sure to browse the index for information on the credit card to match your current credit situation, and review the information before you get started.

Credit cards for those with excellent to good credit history, come easily, and are the best offers available. Rewards credit cards, and travel or airline mile credit cards are also readily available. Cash rebate credit cards are also available, and bring plenty of benefits, –but to really benefit from these one should be willing to make payments on time and pay the balances in full. Having to pay high interest would more than negate any rewards.

There are also credit cards available for college students; these credit card issuers mainly cater to students who have little to no credit history. In some cases, they also cater to students with slightly blemished credit, as long as the history is still short. The preferable student credit cards are those with low introductory rates, as well ongoing rates that are competitive, and comparable to other student cards. Also, student credit cards often offer awards, and rebates that are targeted towards college students, and are very useful.

Other cards are also available for those with low credit, bad credit, or no credit, –secured, unsecured, prepaid, and catalog credit cards. Each of these are very different from the other, so plenty of research is necessary before making a final, and informed decision. The cards that report to all the major credit bureaus are the most useful, because they allow you to repair credit more quickly, and effectively.

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Why do you need a Credit Card?

Years ago, only the very rich carried credit cards. They immediately conveyed a sense of wealth to the credit card holder. 

Nowadays, almost everyone has at least one credit card, and it is increasingly becoming the “de-facto” method of payment, especially with the onset of internet shopping.

In previous years, the accepted form of payments was either cash or a check, but these forms of payment are rapidly being superceded by the credit card. Many companies are reluctant to take cheques, preferring the immediacy of a credit or debit card, and more and more people have stopped using their check book for payments.

Credit cards are accepted worldwide, so can be used whilst abroad, in almost any currency, whereas a check can usually only be used in your home country, or state. 

Internet shopping is almost exclusively the domain of the credit card. It is very hard to shop on the internet if you do not have access to a credit card.

Most credit cards provide you with a grace period from the date of purchase. This means that you could have anywhere from 20 to 62 days from the date of purchase before you have to make payment to the credit card company.

Many credit card companies also provide you with a payment protection guarantee, meaning that if there is a problem with your purchase, they will refund the purchase amount and pursue the merchant on your behalf.

A Credit Card provides a means of carrying a payment source without the need to carry large amounts of cash on your person, reducing the risk of theft.

Credit Card Balance Transfers

If you are paying interest on substantial credit card balances then a 0% balance transfer card can be a great tool for saving and reducing your payments. Many credit card offers allow you to transfer existing balances during their introductory period for very low or no interest. Consider the savings if you are paying 18% interest on a substantial credit card debt. Various balance transfer programs give you from 5 months to 1 year to pay off the balance interest free or at a low rate. Again, think of the savings. Balance transfers are available with most credit card offers and provide various benefits, –as long as you know how to take advantage of them in the right ways. Review the tips and information below in order to make the most of your balance transfer.

1. Know when the end is coming! Not the world but the end of the introductory rate. The most popular introductory offer is 0% APR. Some cards only take five or six months until the 0% APR expires, while others can take up to a year, or more. Or even until the full balance has been completely paid off. Either way, you need to know when the ongoing rate kicks in, how high it’s going to be, and have a separate means of financing ready to go.

2. You also need to know whether there are any fees for balance transfers, and how much they are. Sometimes the fee is waived during the introductory period, though most of the time it is still in place, and can averages three to five percent. If there is a balance transfer offer, however, the best possible way to make the most of your savings is to transfer only once. Making multiple balance transfers, with the fee in place, can end up costing you more money than you counted on.

3. Using convenience checks to boost your bank account? Think twice! Although convenience checks are, well, convenient for giving your bank account some extra funds, they can pack a double whammy. Using them to make purchases, for example, if you have not read the fine print on your agreement, might end up costing you a high advance cash rate.

4. Know the triggers that will cause higher interest rates! Let’s face it; there are things you can do that will make your life harder, and knowing what they are, and when not to do them, can seem like a luxury. It doesn’t have to be, at least with your credit card account. Some of the most frequently stumbled over triggers are really just basic common sense: make payments on time, make payments in full as often as possible, don’t exceed your credit limit, –and card issuers do review your credit report, so make payments on time for any other creditors as well.

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