Credit Cards
Credit cards are payment devices which are accepted at more than
15-20 million shops worldwide.
Credit card users get a free period of credit before they reimburse
the credit card Company. When you use a credit card you have the
option to pay only a part of the total amount spent and carry forward
the balance, for which you pay interest.
Instead of carrying varying amounts of cash all you need to do is
carry a plastic card which are accepted by more than 20 million establishments
world wide,thereby helping to cope with emergencies both good and
bad ranging from unexpected medical expenses to impromptu travel plans.
How does a credit card work
When you apply for a credit card, your application is carefully
screened. A credit limit is worked out for you, based on your financial
capability and necessary verifications .
The card of course may be valid for any merchant establishment
that has been enrolled by another issuing bank if the brand (i.e.
MasterCard or Visa) is the same.
This network is at the heart of any credit card activity. When
you use a card at an establishment for a product or service, your
card is swiped on a swipe-machine and information about your account
is requested. As soon as approval comes through, you are asked to
sign the charge slip. The merchant then verifies your signature
with the one at the back of the card.
The charge slip is then forwarded to the bank, which in turn settles
the transaction with the merchant. The bank also proceeds to bill
you for the payment as per the cardholder agreement. From the establishment's
point of view too, this is a safe and efficient payment mode, and
ensures growing volumes of sales.
How to chose the right featured card
Choosing the right card to suit your needs, and making it work for
you can be a complicated exercise. You could begin by examining
the credit limit offered by a card. This refers to the maximum amount
the consumer may incur on his card before making his payment to
the card issuer. Then there is the time period, also known as an
interest free or grace period that could range from 30 to 45 days.
Cards also come with different charges like interest costs on outstanding
balances, annual charges, lost card charges. Then there are the
benefits too. Many cards come with insurance benefits, ATM facilities,
stolen card protection and reward programs.
All that you should know about cards
1. Different cards have different billing cycles. If you have
access to different credit cards you can make use of the free
grace period provided by card companies to get a longer grace
period for yourself.
2. Settle your bills on time. If you have a good credit history
credit card companies may give you an increased credit limit.
if requested by you.
3. Always verify purchases with your billing statement.
4 As far as possible, try and be present when the card is swiped
ensuring that minimises the misuse of the card.
5 . Check your credit card when it is returned by a merchant make
sure that its your card that he has returned.
6. If you lose your credit card, call and inform the card issuing
authorities and make a police complaint as well.
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