Different types of Credit Cards and Understanding Credit Card terms

What Is The Difference In Credit Card Types ?

There are credit cards for everyone, I will explain two major differences between them so you will understand.

Secured Credit Cards: A credit card secured by a savings account that has been established in advance by the borrower. The amount in the account usually determines the limit on the credit card. These accounts present no real risk factor for creditors and are therefore much easier to obtain. The required savings deposit for a secured card may range from a few hundred to a thousand dollars or more. Your credit line is a percentage of your deposit, typically 50 to 100 percent. Usually, a bank will pay interest on your deposit. In addition, you also may have to pay application and processing fees -- sometimes totaling hundreds of dollars. Before you apply, be sure to ask what the total fees are and whether they will be refunded if your denied a card. Typically, a secured card requires an annual fee and has a higher interest rate than an unsecured card.

Unsecured Credit Cards: Unsecured credit cards require no deposit to acquire. They are given based upon the applicants high credit score.

Credit Card Terms ? There are numerous credit card terms, and you should understand them, because not knowing what they mean, can be costly. Here is a list of the important ones and a summary of each:

Over The Limit Fee: Some credit card companies charge you if your purchase exceeds your credit balance. Instead of the purchase being denied, it may be approved. But the next time your monthly bill arrives, you may be hit with a charge of an extra $20 or even more! This charge will probably be on each additional bill, until your balance is again within the normal credit limit.

Late Fee: This is a charge you will be hit with, if your payment is not received and processed by the payment due date. This can be $20 or more a month.

Minimum Payment: This is the amount you must pay to keep the card from going into default. If you fail to make the minimum payment, you can be hit with a monthly 'late fee', just as if you failed to make any payment.

Annual Fee: Some credit card companies charge an annual membership fee. This extra charge can range from $20 to $100 or more. Once a year this fee is added to your total balance due.

There is a website that shows you numerous sources for getting a credit card or a fast cash loan, even if you have bad credit, also you can discover the best sources for credit reports, help prevent identity theft, understanding credit card terms, and much more, this website is called: Credit Cards and PayDay Loans, and it may be found at this URL:

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Robert W. Benjamin has been in the software business since the early 1980's on the VIC 20, C64, AMIGA, and WINDOWS Computer Systems. He has won magazine awards for the 'Game of the Month', and more, in several European computer magazines.

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