Introduction To Credit Cards	Credit Library   E-mail This   Print
	Credit Cards & Their Features The History of Credit Cards Need of Credit Cards Pros & Cons
	Credit Cards & Their Features a.Introduction: A sneak peek into anyone’s wallet or purse would comprise a credit card and practically - no cash! This phenomenon of ‘no – cash’ that would have been practically unfathomable earlier is now completely possible? The ‘plastic’ world makes life easier and gives an opportunity to fulfill all our whims and fancies and make as much as purchases as we want. The functioning of the credit card is as follows. Purchases are bought through credit, and all this amount gets accounted and is sent to the credit card holder at the end of the month. However the credit card holder would not be pressurized to pay at the end of the month, and can delay the payment over time, nevertheless the interest rate would keep mounting up. b.How does a Credit Card look like? A small card made of plastic, which has invaluable information embossed on both the face of the card as well as the rear. A Credit Card will have the following information. Face: Credit Card Number: A particular number that is issued to a person, which is printed on the credit card. The Credit Card Holder’s Name: The credit card holder’s name is usually embossed on the face of the card. Bank’s Name: The logo and bank’s name would be imprinted on the card. Validity Date and Expiry Date: The validity date and expiry date indicates the longevity of its use. Rear: Magnetic Stripe: All the Credit Card information is stored on this. Signature Stripe: The place assigned for your signature. Card Security Code: This is to safeguard the security of the card. c.Where can it be used? Credit Cards is now globally acclaimed and can be used anywhere. It holds good especially when you are traveling abroad, as this can be made good use of. However certain amounts maybe deducted as a fee. d. What are its benefits? Credit Cards apart from all its benefits has a good option of rewards, where you can earn points over purchases, and can redeem these points and get some gifts, cash benefits and other great options. A number of Airline miles and rebates for basic amenities are available through these credit card sources. Some other benefits of a Credit Card are that help: Online payments through the credit card are usually made easy. The credit card usage can be checked form time to time and kept under control. Other things you need to know about credit cards: Credit History: All the Credit Card transactions are recorded and you need to buildup your credit history so as to facilitate in getting loans. You can also withdraw money though a credit card from an Automated Teller Machine (ATM). Prepaid Credit Cards have a specific amount of credit limit, in case that you are capable of exceeding your limit. The History of Credit Cards To exactly point out to say when exactly Credit Cards came into the picture would be really hard. However one thing is for sure, and that is, it has existed since a long time, though not with the same name, size or shape, but with the similar purpose. In the earlier days before currency was invented, there were many purchases that were made on the basis of credit. The origin of an actual Credit Card can be backtracked to this century where in the 1920’s, the oil purchases and facilities at the hotels were provided through Credit Cards. However these Credit Cards were very specific to the company, as well as the customer and only later on it was became less specific and they started accepting other company cards as well. A historical turnout for the Credit Cards was with the plan of John Biggins, who came up with the ‘charge-it’ plan. This was a less unsophisticated way of the Credit Cards that we have now, nevertheless it involved a bank, the merchants and a customer. With all due respect, Frank McNamara’s debacle of forgetting to get his wallet at dinner and great conceptualization of starting the credit system gave in to forming the Diner’s club. The Diner’s club, to the advantage of the frequent diners and travelers, enabled dining without any cash involved. The American Express however vouched on this option and began the functioning of a credit card. The Bank of America followed in suit, and still functions under the banner of VISA. Need of Credit Cards Whether you need a Credit Card or not, is a decision that you should make after considering some important aspects. Your monthly income is a major aspect that you should consider before applying for a Credit Card. In addition, whether you have the capability of paying the monthly bill that are associated with Credit Cards, even apart from the expenses that you can make, is another consideration that you should ponder over. Availing a Credit Card, however, is beneficial in a number of ways, though misuse or using it unwisely can lead to a heavy burden of debt. Credit Cards have become an easy way to quick cash, identification needs and also that extra security that you may need in many situations. Here are some benefits of having a Credit Card that you can consider while answering yourself, whether you really need to apply for a Credit Card or not. Credit Cards come really handy in situations where you need some significant amount of money and do not have it with you at that moment of urgency. Medical urgencies are a good example where Credit Cards can be of enormous help. Credit Cards have become an accepted form of payment almost universally. This leads to the benefit of not carrying cash with you and pay at ease. Moreover, while you can make big purchases with Credit Cards when you don’t have that much money with you, in any dispute over the product that you have bought with the Credit Card, you can withhold the payment if you in case of payments through Credit Cards. While Credit Card users have the general tendency of overspending, they can use this card for making a budget as well. How? Well, this is through the monthly Credit Card statement that a cardholder gets. A cardholder can use this statement for tracking all his/her expenses and make a comprehensive budget from that. But while these may sound alluring to get a Credit Card, just hold on a moment to ponder over some more points. Think twice before you have a Credit Card regarding whether or not you can control your expenses and steer clear from the captivating trap of overspending with your Credit Card. Moreover, if you have a bad credit history behind you, it will come in the way of having other financial benefits like taking huge loans in future. Therefore, consider all these points over and over and then only make the final decision. Pros & Cons Getting a Credit Card may seem pretty much alluring, but have you gone through all the considerations that should make before you apply for a Credit Card? After all, taking a Credit Card and not qualifying for the charges and other obligations that it makes afterwards can seriously spoil your Credit History. But you don’t have to worry that much, if you are not aware about all the pros and cons of Credit Card that you should know, since we are here to guide you through this. Just have a glace at the basic information that will are sure to guide you to a more wise use of your Credit Card a. Advantages of Credit Card: Credit cards have become one universally acceptable way of payment that you can conveniently use to make payments a wide number of stores and for needs. Rather than carrying cash, carrying credit cards is much more convenient and secure. The easy cash that credit card offers helps the cardholder at several emergencies like medical emergencies and many more. The more you use the credit card, the more reward points you can get which you can later redeem for several other gift vouchers or items. If you pay your credit card bill regularly, this helps in establishing a good credit history which eventually helps you a lot when you apply for big loans. Credit Cards can also be a good identity document that you can carry with you. But while these sound alluring enough to make you rush for a credit card, you should go a bit slow and consider the flip sides as well before you finally make up your mind. Now here are some of those considerations that you should ponder over a bit. b. Disadvantages of Credit Card: The first disadvantage that most of the cardholders face while handling a credit card is to tackle the unwanted burden of debt that they get their-selves into. So, beware of over spending that credit cards tend to lure one into. Credit Cards have many terms and conditions with it which sometimes can be of real trouble if you don’t make sure that you understand them properly before you apply for a credit card. Make sure that you don’t over spend and can pay your monthly credit card bills regularly. While paying them regularly will build up a good credit record for you, the contrary will damage your credit history and can come in the way of future loans and other financial transactions. Sometimes, in the way of giving you instant money or cash, credit cards can cost you more than other form of credits. Even there are chances of being a victim in the credit card scams as well which have become much more frequent now-a-days. Sometimes, ATM withdrawals through credit cards can cost you more. In the United Kingdom, the Barclay card was the first to be introduced as the Credit Card System. In the Europe however it was the Eurocard which were among the Credit Card Networks. Today the American Express, VISA, MasterCard are well established and renowned practically making the world living on them.