Swipe Plastic for Bliss
Want to shop without carrying a wad of currency notes? Well you should be using a credit card. Surely you are familiar with these magical pieces of plastic that are issued considering your credit history. Using the credit card one can make purchases of high value, without wondering if there is enough money in their bank account.
Most of the stores today accept cards, and have realized that people rarely carry cash on them. This holds for groceries and household items as well. Many people have a bank account with the credit card issuing bank, but this is not a necessity.
Credit cards have created a revolution. Today, there is not a soul who does not possess a card or who is unaware of its benefits. It has made life easier. It is now possible for everyone to afford products and services which were earlier beyond their reach. A few of the benefits of credit cards are mentioned below:
1. The primary purpose of plastic money is to add convenience to the purchase process. There is no need to carry huge amounts of cash and be worried about its safety. Since most leading shops and restaurants accept cards; life on the move becomes easier. MasterCard and Visa are cards that are accepted worldwide and can be used at any store or hotel to pay bills.
This convenience should naturally be exercised with caution and responsibility. If you find that there is a higher tendency to spend if you use plastic money, then think twice before you use your card. But if you are responsible, plastic money can be very convenient. Don’t you agree?
2. Paying when one likes and paying as much as one likes are two of the most important benefits of plastic money. They can shop for an expensive article today and not be worried about payment for another 45 days. Also the user can spread the payments and make them over a long duration instead of in one shot. Credit cards are not the same as debit cards or charge cards. In the case of the latter, payments are drawn from your bank acount. However, in the case of credit cards, there is no connection with the bank account.
3. Other perquisites — Credit card companies compete with each other in providing various perks and benefits to its users. There are points accumulated for every purchase made which can be redeemed for converted into equivalent cash. Points are used to buy merchandise with or without additional payment.
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Basic Credit Card Terms: What Do They Mean?
If you are like most consumers, you probably haven’t read the cardholder agreements for any of your credit cards. And who can blame you? The small print and the legalese those agreements are written in is barely legible. The truth is that credit card companies are hoping you won’t read it. They would rather you didn’t understand all the terms and conditions of their cards. But understanding the key terms of these agreements is extremely important because they explain how your balance is calculated and what triggers fees or interest rates.
You can save money by understanding the terms of your credit card. This knowledge will help you compare credit cards and know when you should switch to a new card to avoid increasing interest rates or other fees.
Here are a few key credit card terms you should be familiar with:
Preapproval- Most consumers have received offers in the mail stating that they have been “preapproved” for a credit card. This can be very misleading because in reality you haven’t been preapproved for anything. In this situation, “preappoved” only means that you have met some initial criteria that indicates you are credit worthy. There is no guarantee that you will be approved for the credit card if you apply, although that seems to be implied.
Annual fee – Many credit cards charge the card holders an annual fee. This may range anywhere from $25 up to several hundred dollars for some premium cards.
Transaction fee- Most credit cards will charge a transaction fee for any transactions other than purchases. The transactions that are often subject to additional fees include cash advances and balance transfers. Some cards will occasionally waive these fees for new card holders as part of an introductory offer. The amount of the fee is usually calculated as a percentage of the transaction, and a minimum fee applies.
Grace period – You can avoid paying finance charges by taking advantage of a credit card’s grace period, provided you pay your balance in full before the due date. In contrast, a card without a grace period will begin accruing interest from the day you use the card. However, if the card has a grace period of 20 days, for example, interest will not begin accruing for 20 days as long as the balance was paid in full the previous month.
Wise consumers take advantage of the grace period to avoid paying interest on their purchases while still enjoying the convenience of using a credit card rather than cash.
Peter Kenny is a writer for Finance 123. Please visit us at http://www.finance-123.com/credit-cards/reward-credit-cards and http://www.shopsmartloans.com/auto-loans
Advantages of a Business Credit Card
Credit cards can be useful for business as well as for personal use. In fact, many businesses use credit cards in their day to day operations. And contrary to what you may believe, you don’t have to be a large corporation to obtain a business credit card. These cards can be very beneficial to even small business owners who work out of their own homes.
Business credit cards can help a business build up a solid credit history. Just like individuals, businesses need a good credit history in order to qualify for loans or other lines of credit. By obtaining a business credit card and paying the bills in a timely fashion, you can begin to build a good credit history for your business.
Another advantage to these cards is that they will help you keep your business expenses and your personal spending separate. Small business owners often have trouble staying organized and they pay the price at tax time. They may miss a deduction that they are eligible for, or find that they are being audited because they have deducted something they shouldn’t have.
If you use your business credit card strictly for business, you will know that all charges to it are for business expenses. Most business card issuers provide card holders with a year end statement detailing all their charges for the year by category. This is a great tool for completing tax forms as well as for staying organized and tracking spending.
Small businesses are often low on cash when starting up. Business credit cards are an ideal way to fund a growing business. Equipment, office supplies and inventory can be purchased using the business credit card and paid off later.
The fact that business credit cards often have higher limits than personal cards can be very advantageous to a small business as well. Spending limits of up to $50,000 are common, and this amount of spending power can be the key to getting a newly started business up and running.
Many business credit cards are offering reward programs similar to those offered with personal credit cards. With some cards you can earn points for purchases made and then redeem them for business related items or gift cards to office supply stores.
Keep in mind, however, that business credit cards can be just as dangerous as a standard credit card. Just like with personal cards, if you run up debt that you can’t pay off and begin making late payments, your business can suffer quickly. Stay safe by following the same guidelines you follow on your personal accounts. Don’t spend more than you can afford to pay off, pay your bills on time, and don’t miss any payments. If you follow these rules, you will get the most benefits from your business credit card.
Peter Kenny is a writer for Finance 123. Please visit us at http://www.finance-123.com and http://www.shopsmartloans.com
Payment Delays Lead to Higher Payments
All credit cards are not created equal. That is why many people carry multiple credit cards. In today’s world, credit cards are used for not just shopping but also for online trading, easy airline and movie ticket bookings. The era of the communist-like queue system where you stood in long lines is now a thing of the past. Now, while talking about the credit card payments, one has the option of clearing the entire outstanding in a single payment or carrying it over to the next billing cycle.
If you diligently repay all your credit card dues in the first instance, you might be eligible for many 0% APR cards and get away without any annual fees or interest.
If you are the kind of customer who cannot pay in full, the rate of interest will make a lot of difference to you. So go in for a low APR card. The APR is the interest amount payable while making partial payments or transferring balance from one card to another. In fact, a single card can carry multiple APRs — for cash advances, part payments and card transfers.
There may also be different slabs applied for different levels of payments due. For example, 10% applicable for $5 -$100, and 20% on the remaining balance above $100 and so on. In case the payments are delayed by over a cycle, a higher APR will apply. All of this will be mentioned in the fine print of your credit card agreement.
Plastic cards have made life very easy. But at the same time, plastic money places a higher degree of responsibility on the user. You must realize that your transaction starts when the card is swiped and does not end there. The transaction is concluded only when you repay the card debt with any accrued interest. That is why you need to behave responsibly.
Some people say that they find it less guilt-inducing to pay using a credit card. This is strange as the monetary transaction is identical, regardless of whether you pay with a card of with a wad of currency notes.
Paying only in part seems like an easy task and the rest can be rolled over to the next month. But one should remember that the interest rate will get accumulated. And the person will end up paying more than his/her bill amount the next time around. There are some credit card companies that follow the fixed APR system where the charge is fixed. However, in others it varies and so will the interest rate on your card.
0% APR credit cards sound like you have got an interest free loan. But that is true only for a limited period of time. Make sure you know what that grace period is. And if the user wishes to use the credit card as an ATM card to draw cash, the APR on that will be more than that calculated on purchases made. An informed customer will know what the card is all about and only then use it.
Be smart, compare credit cards at http://www.thriftyscot.co.uk/Credit-Cards/ consider credit card rewards at http://www.thriftyscot.co.uk/Credit-Cards/card-reward-schemes.html and then choose low APR credit cards at http://www.creditcards-gb.co.uk/low_apr_cards.html