Which Card To Choose?

Credit cards have almost totally replaced the use of cash. Today everyone prefers to carry a small plastic card instead of huge amount of cash. It is supposed to be the best means of payment that can be used anytime and anywhere. The credit cards can also carry out the cash withdrawal to the bank or to any network of the lender.

So basically credit card is a plastic card with the owner’s name, the membership number printed on it along with cardholder’s signature capable of paying the bills of the cardholder. This will give a method of payment instead of the legal one i.e. cash and other commercial papers like cheque and demand draft.

Credit cards can be broadly divided into two groups depending upon the method of payment like the credit card, the charge card and the debit card.

Credit card

This is a type of credit card that could be used to buy product and services where paying off the bill or credit card payment could be carried out at the same time. You can pay off the bill in installments. The number of credit card installments in which you have to pay a bill depends upon the value of the bill of the balance added by the monthly interest. The Bill of the previous month along with the interest is forwarded to the next month.

The most important character of credit cards that differentiates it from the rest is that it here you get the provisions of fixing the limit to your expenditure. This limit is different for the different members (like the gold, classic, regular). The minimum payment i.e.10%-20% of the total balance of the bill has to be paid within the due date. If you fail to do so you will be charged a delay fine, which me be some percentage of the minimum payment.

Charge Cards

This card could be used to pay the bill too. But it has a disadvantage that the customers have to pay the whole bill at a time may be after a fixed interval of time or by the end of the month. There is no provision of installments. And if you fail to pay the bill on time then you may be charged an additional charge.

This type of card generally doesn’t have any usage limit. You have to pay the full bill on all transaction on time or you may be charged a delay fine.

Debit Cards

Debit Cards are the mere replacement of cash. It works on the principle of cash i.e. if you have the total amount then you buy it and if not then you don’t buy. There is no picture of any type of credit. It is same as paying cash but here you don’t have to carry cash with you. You only have to carry a debit card and the payment you have to pay is deducted directly from your and the merchant’s account is credited. You may sometimes be charged an additional cost by the bank for availing this facility.

To hold a debit card of any bank you must have account over there as this works on the principle of cash transaction from one bank to another. Moreover a successful transaction can take place only if the cardholder has enough balance in the account to pay off the bill. This is also an advantage for the person who spends recklessly.

 Setup a credit card processing merchant accounts to accept credit cards today!