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Saturday, September 30, 2006

Guide to credit cards

Credit cards are a convenient method to obtain credit. They are available from all major banks and provide flexibility for the consumer. Some basic facts about credit cards are set out below.

Types of card.

  • Standard - Most common are Visa and MasterCard.
  • Platinum and Gold cards - Available for people with higher levels of income, and have benefits attached to them.
  • Loyalty Cards - Offer incentives such as cash bonuses, points and other discounts.

Rates and Fees.

Credit cards user will need to pay annual fees and interest charges. Interest rates tend to be high and vary between banks. Some banks provide interest free periods. Other banks may have penalty payments for late or returned payments or if you exceed your credit limit.

How and where to apply?

Applications forms are usually completed and submitted to the credit card Company. It will take a few working days for review and decision for an application. Nowadays, some people even offer on-the-spot application of credit card at major shopping complexes. Various promotional techniques are being used to persuade people of all ages to apply for credit card.

Saturday, September 23, 2006

Small Business Credit Cards

The Visa Business Card and MasterCard Executive BusinessCard offer unsecured credit lines of up to $50,000 and $100,000, respectively. Those funds are accessed by card, check or ATM. Both credit card offer free quarterly or annual spending reports to help monitor expenses and identify business-tax deductions, along with savings on travel, entertainment and business-to-business services. Visa and MasterCard brand the cards, so shop around for the best interest rate and no annual fee.

There's an explosion of entrepreneurs running businesses from home. The SOHO (small office, home office) segment has 41 million businesses, with one added every 30 seconds. This has caught the eye of credit-card companies, which are aggressively courting small businesses.

Whether it's meeting payroll, making purchases or securing more capital, small-business credit cards can ease the cash crunch, with added perks.

Adapted and edited from http://www.findarticles.com/p/articles/mi_m1264/is_6_31/ai_65540864

[Accessed Sept 2006]

Friday, September 01, 2006

Smart ways to use credit cards

The good thing about credit cards is that they let you make purchases when cash isn't an option. The not-so-good thing: They tempt you to impulsively charge items you don't really need. Keep in mind that every time you use a credit card, you're borrowing money. So think of credit-card debt as a high-interest loan, and consider these five smart ways to use credit cards:
SHOP AROUND

With hundreds of credit cards to choose from, it's smart to shop for the best deal. Choose a card with no annual fee and a low APR (annual percentage rate). Read the fine print to see if a low APR is a promotional rate that expires after a few months and then leaps up, often dramatically, particularly if you make one late payment. If you plan to carry a balance, go for the lowest interest rate. Also look for a low rate on cash advances.

IMPROVE CREDIT RECORD

A credit report is a snapshot of your debt-paying activity. Your credit (FICO) score (range from 350 to 850) predicts your chances of getting a low interest rate on a credit card, car loan or mortgage.

LIMIT NUMBER OF CARDS

A wallet filled with credit cards (which represent money you owe or can borrow) may work against you when you apply for a loan or mortgage. Two or three cards are enough. If your credit report indicates that you already owe or can access a great deal of money, potential creditors may determine that added debt could strain your ability to repay.

SWITCH BALANCES CAUTIOUSLY

If you transfer your high-interest balances to a low-interest credit card, be aware that the low rate may last for only a limited time, and that many credit-card companies assess transaction fees, sometimes up to 4 percent of the amount transferred. Call a company representative and ask about all charges before signing up. Once you transfer the debt, stop using the old card.

AVOID CREDIT PITFALLS

Despite the benefits, there are pitfalls that accompany credit-card use. It can be costly, with some interest rates higher than 25 percent and whopping annual fees, finance charges and penalties that can jack up the purchase price. And you risk spending more than you can pay.

Adapted from,
Find Articles
http://www.findarticles.com/p/articles/mi_m1264/is_5_35/ai_n6198430
[Accessed September 2006]