Credit Card- An Alternative to Hard Cash

Gone are the days when conventional banking was in fashion and everybody holding a pile of cash used to rush to the bank for account deposit and later used cheque books for withdrawals. In past three decades conventional banking transactions have transformed from cash withdrawals to card swiping using credit limits offered by financial institutions in form of credit card. But for our those buddies who feel lost when it comes to credit cards and have difficulty in choosing best credit card offers, credit card and its function would be explained in detail.

Credit card was invented for the kind of people who do not wish to carry a stack of cash with them all the time. These people can enter into any transaction and buy anything by just swiping their credit cards offered by a particular company, with whom this person has agreed upon to pay later. There is range of credit cards targeting different needs of different people. Some of the types of credit cards are:

Standard and Premium Credit Cards

These cards come with predefined limits set by the card issuer. The card issuer charges high interest rates if in case the card holder has not paid the particular sum which is required to be paid before specified date for amount spent by the card holder.

Premium credit cards on the hand charges high interest rate as they offer other benefits as well such as rewards point and cash-back facility on card usage.

Charge Cards

Unlike standard and premium cards, charge cards do not have predefined limits so one can spend as much as he wants but the amount has to be paid at the end of the period specified by the card issuer. This does not involve any interest rates but penalty is charged against late payments. Sometimes non-payments call for card cancellation and spending restrictions. One of the examples of best charge card is American Express credit cards.

Limited Purpose Cards and Secured Credit Cards

These cards are issued for specified thing that is one can swipe these cards on only those stores which are approved by the issuers. They are purpose specific cards and its examples are store and gas cards.

Secured Credit cards are targeted towards those who have no credit history. These individuals are supposed to deposit some security with the card issuer; security should be equal to the credit card limit. This is to ensure that it does not go as bad debts and there are number of best secured credit cards available.

Business Credit Cards

The term is self-explanatory, the business credit card is used solely for business purpose and individual can separate his personal transactions with the business one.

Some of the best credit card companies are Visa Inc. - (V), American Express Co (AXP), MasterCard (MA) and Discover Financial Network (DFS).