Some Interesting Facts About Credit Card

These interesting facts about Credit Card can make you go Hmmmm… it covers a number of useful consumer information that may one day come in handy in your daily life.

• Wonder why minimum payments are so low? It allows consumer to carry more debt while keeping to the same low minimum payment. You can give someone with the ability to pay $100 per month a credit limit as high as $5,000 if they only had to pay 2% a month. If the minimum payment were 5%, they could only have a credit limit of $2,000. The lower the minimum payment, the deeper in debt someone could be in.
• In United States, there are over 1.52 Billion Credit Cards in use.
• In the beginning, credit cards were just charge accounts, offered by individual stores and only usable at those stores. The first credit card that could be used at multiple locations was offered by The Diner’s Club in 1950
• Late library fines and unpaid parking tickets can hurt your credit score.
• At least one in 10 consumers has more than 10 credit cards in their wallets. That’s equal to 304 tons of plastic or 61 Elephants.
• You can lower your interest rate with a phone call. Credit card companies are like cell phone and cable companies, they’re afraid you’ll leave and join with one of their competitors. Use this to your advantage by comparing offers from other credit cards and bringing this information to your credit company.
• All though the first credit cards were merchant specific cards starting in 1900 with several hotels, the first true credit card was invented in 1950 by Ralph Schneider and Frank X. McNamara. The Diners Club charged participating restaurants 7% interest on each purchase and charged a $3 fee a year to the card holder. This was the first card that could be used at different locations. Chase and Bank of America (Visa) came out with their first credit cards in 1958. They became most popular when the magnetic strip became available in 1970.
• A fixed interest rate on a credit card can change with only 15 days of notice. Fixed is not fixed in the sense that a mortgage loan is fixed, it’s fixed in the sense that the credit card company can change it with only 15 days notice.
• There is no federal law regulating the rate of interest a credit card company can charge! The federal government use to regulate but repealed those laws during the Great Depression and never put them back in place, they now rely on the states to handle usury.

Albert Einstein was once asked what he felt was mankind’s greatest invention….His answer…“compound interest”…..

Before Applying a New Credit Card

Want to Apply for a New Credit Card… Think twice because Credit Card is not just the ordinary Card, it’s what your whole financial planning revolves around, your hard earned money must be utilized and saved well for utilization in future, so better think about its important aspects like available Credit Cards in the market, special offer on Credit Cards and Credit Cards with low interest rate. As there are numerous kinds of Credit Cards available, it’s must to review Credit Cards available. One must do the comparison of all types of Credit Cards before opting for one. If you do require the Card for spending on regular requirements like shopping, gasoline, air travel etc. then you should go for specific cards only so that you can earn the reward points on every purchase.

One can also apply for Credit Cards online and there is good number of websites to help you out in choosing a best Credit Card for you. These websites do have ratings, reviews and comparison of Credit Cards in easy to understand language. These sites do provide the facility to apply for Credit Card Online too and applying on these sites is free too.

Prepaid Credit Card

Prepaid Credit Card – A Solution For Bad Credit

Prepaid credit cards are the most excellent alternatives for bad credit people and for those who want to get better credit score. There will be not be any inspection for your employment and credit rating too if you opt for Prepaid one. But you are required to deposit some amount of money in your account for your credit limit. You can deposit more money when your card has a low balance and you want to use it to make more purchases.

This card is the best option for teens, students, and kids who have no credit history but need a card. They are also a good choice for adults who prefer to keep a close eye on how much they spend. These cards are easy to use at grocery stores, gas stations, and online stores. These cards are also advantageous for small businesses. Small business owners with bad credit can apply for prepaid credit cards.

These cards are quite similar to regular cards but it is easier to qualify for these than regular cards. They can be used worldwide and do not charge interest like being charged on regular cards.

Few Important Questions about Prepaid Credit Cards

1. What is a prepaid credit card?
It is a reloadable card issued by a bank in order to authorize payment for purchases. However, there is a spending limit, which is determined by the amount of money deposited into the account. Since you are not allowed to use it beyond the limit, there is no interest charged. It is just like pay-as-you-go; there are no bills to pay after you use the card.

2. How can I apply for a prepaid credit card?
It is very easy to apply for a prepaid card. You can apply online. Simply click on the sign up button, fill out the form, and you can pay by whichever payment method you prefer: personal checks, money order, or bank wire transfer.

3. How old do you have to be to apply for a prepaid credit card?
Many prepaid cards have age restrictions. As a result, some providers will ask parents to activate the card in order to get their permission, which will thus allow children under the age limit to use the card. In general you must be at least 18 years or older in order to get a prepaid card; if you are under 18, you need to have your parents’ sign up for the card account.

4. If your prepaid credit card expires and still there is a lot of money in your account, what will happen in this situation?
You can transfer your balance from one card to another. Terms and conditions may vary from one card company to another. It is better to talk to a customer care representative for your card to help you come up with a solution.

5. What is a virtual credit card?
It is a non-reloadable and prepaid card mostly for one time; otherwise, it works like a regular card. It is designed to protect your financial information when you shop online. Each time you make a purchase at an online store, a new number is generated. It protects you from sharing your personal card number and other personal information when you shop online.

Credit Card Ratings and Types

If you have trouble getting a credit card with low interest rates, then you may have to opt for a credit card with a slightly higher interest rate. If you have poor credit or no credit, some banks will issue you a secured credit card, wherein a deposit in your saving account will serve as a guarantee against your credit limit.

Secured credit cards are often the most excellent alternative for people who have a blemished payment history or bankruptcy in their past. Make sure you select a credit card that pays you interest on your deposit. If, on the other hand, you have very good credit score and would like a higher limit, you can opt for a Gold or Platinum card at the same interest rates with little or no annual fee.

You may be receiving offers like a new credit card with a pre-approved Credit Limit. Before applying for it, make sure you read all the terms and conditions carefully because it could carry a very high rate of interest. Otherwise, by accepting the offer you may agree to transfer the entire balance of your other credit card to the new high interest account. You could end up paying extra interest without realizing what you have agreed to do. You should thoroughly examine the whole list of terms and conditions of the credit card before you sign so that you don’t fall into this trap.

According to the Federal Truth in Lending Acts, credit card companies must provide certain pieces of information. This information is listed below, and by familiarizing yourself with it, these facts will help you evaluate Credit Cards with one another.

• Finance charges in dollars and as an annual percentage rate (APR)
• Credit issuer or company giving the credit limit.
• Size of the credit line
• Duration of the grace period if applicable, prior to payments which must be made
• Minimum fee required
• Annual fee, if applicable
• Fees for credit insurance (if any)

Types of Credit Cards

Mainly there are three types of Credit Cards:

• General credit cards, such as MasterCard, Visa, and Discover cards.
• Travel and entertainment cards such as Diners Club and American Express.
• Merchant cards which are usually used in one chain of stores.

Some credit cards are associated with certain organizations, such as universities, labor unions, professional groups, charitable groups, etc. These are called affinity cards, and they generally carry the MasterCard or Visa logo. The main difference is that the designated organization is paid a small percentage of all transactions.

Reward cards give you some rewards like cash back and incentives when you use your card. Frequent flyer credit cards, for example, offer free air miles plus reward points each time you use these cards. However, they usually have a higher interest rate, so it might not be a good idea to choose these cards if you don’t pay off your balance in full each month.

The right credit card for you is the one that is accepted everywhere you shop and charges you the least amount of money for the services you utilize. Nearly any U.S. business or organization that accepts MasterCard also takes Visa, and vice versa. To that end, it does not matter whether you choose a Visa card or a MasterCard, because you will be able to use both at the same places.

Visit Us our Credit Card Ratings section for more such tips about Credit Card.