Credit Card Definitions
Understanding credit cards lie in understanding the terms and definitions of the terms that are used within your contract agreement. In understanding these terms and definitions, you will be able to not only grasp all points of your agreement with your credit card company, but you will also be feeling more secure in your decisions. In addition, many credit card companies insist that you understand their terminology before they will give you rights to using their credit card. Knowing these terms will help you to be a wiser consumer when spending and help you when you are using your credit card.
For instance, there are number of different types of credit card. These includes debit cards, which use funds that are within your checking account, credit cards, which are cards that allow you to borrow against a certain amount, and pay as you go credit cards, which allow you to add certain amounts of cash onto your card to use. Each of these different types offers unique advantages that are only usable to the card that you are using. For instance, your debit card will earn your checking account points while your credit card will earn you cash rewards.
There are also many different credit card companies that are in existence and should not be confused between each other. For instance, Mastercard and Visa are the two most popular credit card companies in the world but are not the same company, as both offer very different credit cards. AE, or American Express, is another leading credit card company that offers excellent security but some stores refuse to accept them as AE charges an extra amount in order to use their merchant services, which many balk at paying. There are also many European credit cards, which some are only usable overseas and others can be used here as well, but costs when charging.
In addition, there are student credit cards, which offer small limits with low APRs to students during their time in college. This is offered as many students need many during their time in college but can not always qualify for the larger credit cards. In addition, setting a low amount prevents students from being tempted to spend too much and be in even more debt. ATMs, or automatic transaction machines, are a great method of being able to withdraw money and most student credit cards will allow the student to withdraw against the card at any standard ATM.
Other quick definitions that you will find on your credit card statement:
Limit: this is the maximum pre approved amount that you can spend on your credit card.
Minimum Payment: this is the lowest payment to be made on each month in order to keep your credit card “up to date”. Please note that paying only the minimum payment will take you forever to reimburse your card.
Balance due: this is the full amount owed on your credit card.
Interest rate: This is obviously the interest rate paid on your credit card.
With all of the different terms for credit cards, it is important to understand these terms and keep control of your own credit and ability to spend. With careful consideration and understanding, a credit card can be a great tool and asset.
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