Credit Card - Banks and Fees

Credit Cards

- Banks and Fees -

- Credit Cards - A credit card is any card that may be used repeatedly to borrow money or buy products and services on credit. Issued by banks, savings and loans, retail stores, and other businesses.

Debit card - A card which allows customers to access their funds immediately, electronically. Unlike a credit card, a debit card does not have any float.

Choosing a Credit Card

Fees: This is probably the most important consideration. Fees include the annual fee, the interest rate charged on balances (called the Annual Percentage Rate or APR), late payment penalties, and any other fees they charge. If you plan to pay your bill in full every month (as we strongly recommend), you'll want to find a card with no annual fee. If you expect to carry a balance, you'll want to choose a card with a very low interest rate, ideally one that guarantees that low rate for an extended period. Find out if there is a grace period before interest starts accruing, and if so, how long it is. Also find out how interest is calculated (for example, the average daily balance of the last cycle, or of the last two cycles, or something else entirely). Some issuers charge a fixed APR, while others charge a rate that's tied to an index such as the prime lending rate. Finally, find out whether there are any other charges, and under what circumstances they are assessed. For example, most credit card issuers charge a fee for cash advances, and some charge a fee when you close the account.

Acceptance: Some cards are accepted at more locations than others. The two that are the most popular in the United States are Visa and Mastercard, and both are accepted at just about every merchant who accepts credit cards. American Express, which is a non-revolving credit card, is also relatively popular. If you're considering another type of card, be sure that it is accepted at the types of places where you will want to use it.

Perks: A lot of credit cards come with benefits, such as rebates and frequent flier miles. Try to estimate the dollar value of any such benefits when deciding which card to select.

Credit Limit: This is the maximum amount that you are allowed to charge on the card (until you pay some of it off). In general, the more they allow you to borrow, the better, as long as you plan to pay the full amount each month. Otherwise, it can be dangerous to have too high of a credit limit, because if you're not careful, you could dig a hole that's tough to get out of.

Introduction to Banking - Learn about the basics of banking, as well as alternatives to banks, such as credit unions, brokerages and mutual funds.

Types of Accounts - Find out about the different types of bank accounts that are available, including savings accounts, checking accounts, money market deposit accounts (MMDAs) and certificates of deposit (CDs).

Choosing a Bank - Learn how to choose the best bank for you. Compare features like interest rates, convenience, FDIC membership, size, and minimum deposit. Compare services like direct deposit, ATMs, online banking, credit cards and debit cards.

charge card - A card used for making payments. Similar to a credit card except that the balance must be paid in full when the statement is received.

Credit Fraud - Credit fraud is an increasingly serious problem, growing almost threefold in the past five years. Are you protected and do you know what to do if this happens to you? This article includes steps to prevent credit fraud, and how to deal with it if it does occur.

Introduction to Credit - Stresses the importance of credit and explains some basic concepts. Also gives suggestions and a five step process to help take control of your credit.

Choosing a Credit Card - Trying to find the right credit card? Learn how to evaluate fees, perks, and the associated fees before making your decision.

Traveler's check - Is a Check issued by a financial institution which functions as cash but is protected against loss or theft. Traveler's checks are useful when traveling, especially in case of overseas travel when not all credit and debit cards carried by a person will be accepted. A charge or commission is usually incurred when a person exchanges cash for traveler's checks, though some issuers provide them free of charge.

How do credit cards and credit card interest work?