Know What Credit Card to Use

Before applying for a credit card it is important to know what credit card to use.

In the past it was pretty easy to get a Credit Card. With a good credit rating you just chose between Diners Club, MasterCard, VISA and AMEX cards.

VISA and MasterCard allow cardholders to make partial payments on their purchases. The other two are more like charge cards (though they have matured to credit cards) preferred those who prefer paying their last month’s purchases in full and were considered more exclusive.

These days in our cashless commercial world there is a preference for plastic as the most used method of payment. Card companies and banks have started to offer credit and debit cards with many more options than they did in the past.

Debit or Prepaid Cards

You must accept the activation and transaction fees that go with using debit cards if you don’t have the credit rating needed to have a credit card or a checking account. Most debit cards are held by students and younger people who need plastic cards for purchases but don’t have a credit history to quality for credit cards. The remainder sit with lower income people who have poor credit histories and do not qualify. Debit cards will not increase your debt because they use your deposit for funding. These cards have no effect on your credit history.

Credit and Charge Cards

Almost everyone who can have their application accepted has one of these. They are essential in todays cashless society. There are a number of credit card companies that offer the basic convenience of credit cards plus a few incentives for the selected market segments.

You need to do a little research if you plan to have your first credit card. The first thing to consider is how you will to use the card.

If you have a large income and can afford paying the full amount of your purchases, a charge card like Diners Club or AMEX is a good choice. No need to worry about finance charges and the cardholder can enjoy many of the perks offered by charge cards.

Airline or Traveler Credit Cards

For frequent travelers, an airline credit card co-branded with the major card brands can be a good choice especially when your purchases get mileage credits towards a free airline ticket or hotel accommodation.

Low Interest Credit Cards

If you make cash advances, do balance transfers or pay only the minimum monthly dues and leave balances in your account, check out the Annual Percentage Rates or APRs of various credit cards and notice the differences between them. The lower it is the better. Many new entrants in the credit card business do offer APRs that are lower than what established card brands offer. And most of them advertise introductory APRs that can benefit cardholders who prefer to pay minimum dues. Student credit cards are a good example of these.

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