Know The Features Of Your Credit Cards

Nowadays, people not having at least one credit card are a rarity.  Credit card and other financial companies have made it so convenient for individuals to acquire credit cards which make it hard for a lot of people to resist its enticing propositions. Though you might consider this as a boon, it could actually cause you much financial chaos if you do not know how credit cards really operate.  You use the card to purchase something cashless, but you will have to pay that back to credit card issuer.

Credit cards have a number of characteristics:

1.  The first important characteristic of all credit cards is the interest rate charged for unsettled balance.  Generally, you are given 30 days to settle your purchases; if you pay your bill in full, majority of the credit card companies do not charge any interest.  If the amount due is not settled after 30 days, then whatever balance is remaining will be charged interest which largely depends on its APR and your credit standing.

2.  Another characteristic of the credit card is the authorized credit limit, which simply means the total amount you can charge on your card before it is cut by the credit card company.  This will also depend on your credit history, meaning if you have a good credit rating you will be granted a bigger limit.

3.  Then we have the annual fees which a lot of credit card owners fail to consider.  Some card companies do not charge annual fees but instead charge other types of fees for late payment, cash advance, transferring of balance, which could result to accumulated and higher charges not necessarily related to actual purchases.  Additionally, it will also cause the card holder to overshoot his/her credit limit, which will again incur another fee.

There are three basic types of credit card:  the regular, premium and secured credit cards.  The regular credit is just a plain and simple credit card, it does not require any deposit but it does not have much extra features as well.  Premium cards give the highest credit limit and carry additional benefits like warranties on products, assistance services, and concierge services, among others.  A secured credit card on the other hand, require a deposit and the higher the deposit, the higher credit limit you will get.

Another characteristic given by some credit cards is a refund you get for items purchased termed as cash back incentives. Rebates vary in percentage and most likely will depend on the type of card you are using.