Types of Credit Card

Credit cards| Types, Balance, Limit, Advantages & Disadvantages

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About Credit Card

Credit Card Wiki

Hello, friends!! Did you know what is a credit card? or How credit cards work? No, don’t worry. You are not the single in this race, about more than 80 % of people do not know this. So, let us learn some basics of credit cards like what are different types of credit cards? How credit card works along with Balance & limit of a credit card. We will also learn the Advantages and Disadvantages of credit cards.

Let us start with what is credit cards?

What is a credit card?

The cashless transaction becomes the new definition of credit cards. No one wants to stand in a long line for a single transaction. So, to overcome this problem, our digital database has prepared plastic cards; named Credit cards, to strengthen the relationship between the bank and the customer. By credit cards, banks are giving credence to their customer in confidence, so that the customer can spend the loan from before the payment is made. Amazing!! one step ahead of its standards!!! Really, this is true! Yes, those plastic cards called the credit card, are one of the superb financial aid facilitated by the banks to their consumers.

 

what is a credit card.

Now, with the help of credit cards, a customer can obtain any kind of payment on credit card. You can use the credit card by paying a monthly fixed installment by the company. But, take care while using this. Sometimes, customers spend more than they need, that leads to more repayment of depts too much difficult to the consumers. Because of their non-management of interest rate, Consumers usually get trapped in a high debt trap.

Types of Credit Card

Your credit card types from basic (plain vanilla) to the premium cards depending on the facilities of that cards.

Types of Credit Card

Here below is a list of all different types of credit cards depending on their purpose & available facilities.

  • Standard (Plain-Vanilla) Credit Cards
  • Balance Transfer Credit Cards
  • Rewards Credit Cards
  • Student Credit Cards
  • Charge Cards
  • Secured Credit Cards
  • Subprime Credit Cards
  • Prepaid Cards
  • Limited Purpose Cards
  • Business Credit Cards

Find, which of the above, you want to get.

How Do Credit Cards Work?

If you are going to apply for a credit card, that directly means that you’re going to applying for borrow money from the credit card issuer, Usually a financial co. & banks. And before making a credit card user, credit cards issuer will look up at the credit history of the applicant, first of all. For having a credit card, you need a good credit score (more than 300), & if you possess a low credit score, then you might be refused, or possibly provided a less attractive dealing.

After generating credit card numbers, the issuer will fix a credit limit for you, up to which you can pay with your credit card. After that, you will receive a statement, at each & every month explaining what transactions you’d made on your credit card. This will also inform you about the amount, you’re owing. From this statement, you will be able to find the minimum amount of payment you must to make, before the installment due date.

Try to avoid applying for a credit card online, if you are not a too busy guy. Because, in this, you may be victim of fraud like fake credit card numbers with security code

What is Credit Limit

Definition: What do you mean by the limit of a credit card???? The Credit limit means that amount of money, up to that the financial organization allows the client to spend that much of money. After Credit limit,  the consumer has to repay that much of amount in the following months, spent more than limit. Simply, a fixed amount, up to that credit card company enables a credit card user to spend on a particular credit card.

Best credit cards

Numbers of people keep up more than 10-10 credit cards along with rewards point, interest-free period, etc… Remember that acquiring more than they need. Keeping more credit cards that need will directly raise your monthly grace, leading to the high debt trap.

However, keeping an average credit limit is a good point of smart people. Manage it well & be a smarter one.

What is Credit Card Balance?

Definition: The word, balance of credit card directly states that how much of amount, you had owed from your financial company on your credit card account.

Depending on your financing, it may be positive, negative or Zero. Positive Credit card balance states that you’d owe money from the financial co. on your credit card account. negative credit card balance states that you’d paid more amount than you’d owe from the financial co. & zero credit card balance meant that you are paying the balance regularly, to your financial co. for your credit cards services to keep enjoying them.

Can I Put Extra Money On My Credit Card?

Yes, you can put extra money on your credit cards to overcome the problem of the debt trap, if you’re spending more than you need. but in a limited amount. Try to do not overpay much more if you are not spending a much more.

How Do Credit Cards Work

What happens if I overpay my credit card balance? Friends, do not overpay much more if you are not spending a much more. Becuase, overpaying of your credit cards will instantly create a massive positive balance on your credit card. Since a massive positive balance may generate a red flag on your bank account.

Why red flagged bank account? A red flag on your bank account is generated for preventing the danger of fraud. By the overpayment on credit cards, many people used to making fraud via check kiting (in this technique, write or submit a fraud deposit to pay more on your credit card, then ask for a return on the balanced overcompensated before the check bounce)

Credit Card | Advantages and Disadvantages

Here below is a list of the advantages and disadvantages of using a credit card. Learn them, it’s for you.

credit cards

Credit Card | Advantages

Learn all the Advantages of Credit Cards below & what are the benefits of the credit card to customers, using a credit card.

  1. It is safe to keep a credit card rather than carrying a cash with you.
  2. Credit cards enhance the credit rating & are helpful in creating a good credit score.
  3. By regular repayment of your credit cards, you can earn many rewards with interest-free days for upcoming purchase.
  4. On every spent dollar on every eligible investment, frequent flyer credit cards, enable you to deserve reward points for future investment
  5. If you’re not happy with the service or product, you purchased by using credit cards, then there is an option for you to demanding for chargeback, you’d paid earlier.
  6. There is no specific currency for investment for the credit cards. You can use for any currency.
  7. With the help of credit cards, you can invest unexpected costs without having much saving or enough cash with you.
  8. Credit card mainly featured with purchase protection, travel insurance, and extended warranty insurance, which instantly saves your money & also provide tension free life.
  9. An exclusive feature of the Balance transfer credit card is that it permits move your present high-interest debts credit account to a new one. Also, offers good facilities like 0 % promotional credit charge
  10. Diminishes the boring life of standing in the queue of the banks for a single transaction via enhancing the cashless trajection.

Besides having so many benefits of the credit card to customers, using a credit card. Credit cards also have some disadvantages of credit cards. Let us learn Credit cards disadvantages.

Credit Card | Disadvantages

Learn all the disadvantages of credit cards below, using a credit card.

credit-card-debt

  1. If you are carrying a credit card, that means you have to pay the interest charges for using the credit cards for provided facilities.
  2. You may be a victim of credit card fraud, in catching good-looking fraud schemes. There are numbers of such schemes, targeting the credit cards. However, you can be repaid for unauthorized actions on your credit account. But, friends!! This is yet a time-consuming & stressful activity.
  3. It is the credit cards, which enable us to get debit cards without paying an annual fee.
  4. If you are making a transaction by using credit cards for your businesses, then you have to pay surcharge like Mastercards, Visa cards, etc…
  5. You have to pay an extra charge for the enjoying extra facilities, depending on your credit cards types. 
  6. If you have crossed your credit card limit, then also you have to pay extra credit for this.
  7. You also have to pay an extra credit for the enjoying facilities like balance transfer fee, overseas transactions, & sometimes using some bonuses fee with your credit card.

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