Credit Cards

“A credit card is a card issued by a financial company giving the holder an option to borrow funds, usually at point of sale. Credit cards charge interest and are primarily used for short-term financing. Interest usually begins one month after a purchase is made, and borrowing limits are pre-set according to the individual’s credit rating.”

Credit cards have higher interest rates – about 19% per year in 2016 – than most consumer loans or lines of credit. Almost every store allows for payment of goods and services through credit cards. Because of their widespread acceptance, credit cards are one of the most popular forms of payment for consumer goods and services in the United States.

You have 3 types of Credit Cards:

  1. Major Credit Cards – Are usually issued through banks or credit unions. They bear the Visa, MasterCard, Discover or American Express logo. Some carry incentives that distinguish the cards and place them in categories.
  2. Store Credit Cards – Are intended to promote customer loyalty. Approval for store cards may be easier to obtain than major credit cards. However, many store cards can only be used for purchases from the retailer that issued the card.
  3. Secured Credit Cards – For consumers with damaged credit, a secured card can provide a way to make online purchases and eliminate the need to carry cash. These cards usually require the applicant to put up a deposit of a few hundred dollars. The amount of the deposit may serve as the initial credit limit. If the cardholder uses the card responsibly, he might be able to upgrade to a regular credit card in the future.

Key things to remember about Credit Cards:

  • Transfer balances when necessary
  • Stay within 10%-20% of your available balance
  • Pay off your entire balance monthly, try to stay away from paying the minimum balance if possible
  • A Credit Card isn’t a loan, use responsibly!
  • Pay attention to annual fee’s
  • Great for Gas, Travel, and Groceries – earn rewards

Credit Card Recommendations:

Repairing Credit  –  Credit One Bank Unsecured Platinum Visa, Milestone Gold MasterCard, Indigo Platinum MasterCard

Fair Credit  – Capital One Platinum, Chase Slate, Discover It Cashback Match

Excellent Credit – Chase Sapphire Preferred Card,  Citi Double Cash Card, Barclaycard CashFoward World MasterCard 

Reference:

Credit 101

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