Credit Cards Cliparts

Credit cards are so easy to use that many people actually forget that they have to pay for the goods and services they charged to their cards. This is a real danger indeed. The tendency to overspend coupled with high interests charged on unpaid balances are a deadly combination!

The card gives users a false perception of buying power, which may not be supported by actual earning ability. They may end up making only the minimum payments and incurring very expensive financing charges. If this situation persists, the strain might ruin your financial plans or even worse, get you in hot soup with the law.

Below are some sources of open account credit:


Bank Credit Cards
These are issued by commercial banks. Visa and MasterCard are the dominant types of this form of "plastic money". They allow their holders to make purchases at millions of sales outlets world wide, which include restaurants, department stores and even petrol stations.


Charge Cards
Charge cards are similar to credit cards as they allow holders to charge their purchases to the cards at a number of locations. The main differences is that such cards do not extend a line of credit as all bills must be paid in full by the end of the accounting month. The biggest player in this area is American Express; Diners Club is also another major player.

Prestige Cards
Credit cards are associated with some form of prestige. But not all cards are created equal as some are considered more prestigious than others. This 'snob appeal' is being exploited to the fullest by card companies, which set a minimum income requirement for their cards. To attract clients, they offer cards with more advantages and features as well as higher credit limits. Such products are targeted at the cream of credit-card holders as the standards for qualification are more stringent and higher annual fees are charged.




Retail Charge Cards
Department stores and oil companies are some of the institutions that have joined the fray of card issuers. They allow cardholders to chalk up credit to a pre-established limit. This is for the convenience of consumers in purchasing their products. Discounts are normally offered to encourage consumers to apply for, and use, their cards.





Revolving Credit Lines/Overdraft

Apart from credit cards, revolving lines of credit are another form of open account credit offered by banks. Users can simply write cheques to access this type of credit as it is issued to their checking accounts. This service often charges a higher rate of interest compared with personal loans. Some banks even charge an annual fee.

Credit can be an aid to managing your personal finances, but like everything else, can bring dire consequences if misused.