Dec 22, 2011 12:47 PM
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There are a number of credit cards available in the today’s Market. Credit cards are a very useful and somehow addictive medium of expenditure as they allow people to carry very little amount of cash when they go shopping or traveling to any outside area.
Definition :
A credit card is a small (Plastic) card issued to the users for the purpose of making Payments that allows its holder to buy goods and services based on the holder's promise to pay for these goods and services. The issuer of the card creates an revolving account & grants a permission of Line of Credits to the user (or Customer) from which the user can borrow money for payment to any merchant or also as a cash advance to the user.
Difference of Credit Cards From Others :
A credit card is different from a charge card. A charge card requires the balance to be paid each month in full. In contrast, credit cards allow the consumers a continuing balance of debt, subject to the interest being charged. A credit card also differs from a cash cards, which can be used like currency by the owner of the card. Most credit cards are issued by banks orcredit unions, and are of different shapes and sizes.
==Uses Of Credit Cards : ==
) In making full/partial payments,
) For Shopping anywhere including online shopping,
) Purchasing any goods or services
) To reserve hotel rooms, rental cars, and airline tickets,
) For emergency purchases when cash is not available on-hand,
Also, credit cards help build your credit history, which is important if you ever make major purchases such as cars or a home. It has many uses, the first being that it allows you to purchase what you want on credit and pay later. It also has other benefits especially when you travel, you don't need to carry lots of cash to manage your expenses. You could use your credit card to pay for your hotel, food and shopping expenses.However make sure you pay off your bills on time to avoid heavy interest rates that banks charge.
Different Credit Card :
The basic Credit Cards are the brand (VISA, MASTERCARD &AMERICAN EXPRESS etc) out of which the first two are preferred if you are in Asia since they are accepted at more locations instead of cash. The second differences come in the credit limit and the amount that you can encash in need of emergency from a designated bank. That difference is shown in the colour of the card (usually silver and Gold) with Gold being the higher standard.The use of credit cards also facilitates the purchases and membership fees being payed on the internet, but that would be a lengthy debate on its own.
Benefits to customers :
The main benefit to each customer is convenience. Compared to debit cards and cheques, a credit card allows small short-term loans to be quickly made to a customer who need not calculate a balance remaining before every transaction, provided the total charges do not exceed the maximum credit line for the card. Credit cards also provide more fraud protection than debit cards.
Rewards :
Many credit card customers receive rewards, such as gift certificates, or cash back as an incentive to use the card. Rewards are generally tied to purchasing an item or service on the card, which may or may not include balance transfers, cash advances, or other special uses. Depending on the type of card, rewards will generally cost the issuer between 0.25% and 2.0% of the spread. Networks such as Visa or MasterCard have increased their fees to allow issuers to fund their rewards system.
Many credit cards offer rewards and benefits packages, such as offering enhanced product warranties at no cost, free loss/damage coverage on new purchases, and points which may be redeemed for cash, products, or airline tickets.
Features Of Credit Cards :
As well as convenient, accessible credit, credit cards offer consumers an easy way to track expenses, which is necessary for both monitoring personal expenditures and the tracking of work-related expenses for taxation purposes. Credit cards are accepted worldwide, and are available with a large variety of credit limits and repayment arrangement.
