Thursday, February 12, 2009

Best Low Interest Credit Card in UK and India




Credit Card: Definition


A credit card is a small plastic card with some numbers embossed on it and which helps to purchase the things with no requirement of cash in pocket. It is 3-1/8 inches by 2-1/8 inches in size and has identification information for example a signature or picture.


It permits the person named on it to charge purchases or services to his account charges for which he will be billed periodically. This information is checked where we use it for example by automated teller machines (ATMs), store readers, Internet computers and banks.


History:


It is said that necessity give rise to inventions. Man always invented new things to satisfy his need ands comforts. Credit cards were introduced with same background since its need was felt. Today there are thousand of financial institutions that issue credit cards as compared to previous when the number was less. They have become important sources of identification. The first all-purpose use of credit cards appeared in 1958, with the BankAmerica card, from the Bank of America. This card later was named as VISA card. One more popular card also renamed from Master Charge card to MasterCard. The digitally encoded credit card permits its user to borrow money or buy goods and services on credit up to a pre decided spending limit.


There are many cases that people fall into no mans land situation when they find a huge debt created on them due to excessive use of credit card. A major part of your property may be washed out. So care must be taken to understand following things.


Identify what are the different types of charges that you will be charged with on making transactions with credit card for example what are the late fee charges? The best way to avoid financial problems is to keep your debt burden light. The best way is to make smart use of and keep our financial condition good so that they can be used in our dark period such as job loss or medical emergency.


Here are a couple of pointers to help you choose the best credit card:


Balance Transfers – If you have balance on your credit card, then you can convert this into a 0% deal. However, this deal will only be applicable for a certain amount of time or until the balance is paid off in full. So, if you are planning on making any purchase on your credit card, you should first check to see what the interest rate is before you get charged. Also check if any fee is charged for transferring the balance.



Rewards – There are many credit card offers and incentives like loyalty points and cash back that are offered by many credit cards today. These are offered to attract new clients, as they seem like good deals. However, it is advisable to first check the rates of interest charged as the levels of cash back are generally very low and since you will be paying higher interest, this equation wont balance out. With such rewards like loyalty points, it isn’t worth paying higher interest rates if you are not planning on redeeming them or if their monitory value is relatively low. There are many credit cards with interest free periods.


Repayments – The monthly minimum repayment amount on most credit cards range anywhere from 2% to 5%. If you choose a credit card that has low minimum monthly repayments, then you should know that it could take you a pretty long time to pay back that
balance, which in turn will cost you more in the bargain. However, if at all you miss a monthly payment deadline, then you will probably be penalized. The best way to avoid the risk of a missed payment is to go ahead and set up a direct debit for the minimum monthly payment amount. However, if the funds are insufficient in order for the direct debit to be paid, then you will have to face the penalty fee.


Cash – If you feel the need to withdraw cash from your credit card, then first check the rate of interest being charged. This will always be higher than the interest rate applied for ordinary purchases.

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1 Comment:

Anonymous said...

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