Credit Card

Credit Card

            Credit Card is a payment that connects a issuer, card holder, seller, and middleman. Credit Card is useful when we need convenience in transaction, if we don't have to carry cash. And to applying for a credit card we must know the costs used applying for a credit card. The cost  are Annual Percentage Rate (APR), Grace period, Annual fees, Transaction fees, and Balancing computation method for the finance charge.  Annual Percentage Rate (APR) is the interest rate for a whole year rather than just a monthly rate, that the cardholder or borrower will pay a loan. Grace period is the cost if you repay past grace period, you would pay the grace period cost. Annual fees are the fee we must pay, so we can use our card. The annual fee is nothing recorded in the first bill when we use a credit card and have been included in the bill when we have a credit card for one year. Transaction fees are the fee we must pay with a credit card we can also make cash withdrawals at ATM in cooperation with a network of credit card we have. But there is the interest charged on this cash wirhdrawal transactions.

              Credit card also have many of features such as Credit Limit, How widely the card is accepted and what services and features are available.There are several levels of credit card start from that the class for all  up to grade class of the super exclusive. There are many types of credit cards but the most common are platinum card and gold card. Many type of credit card offers features that are attractive and profitable as get additional discounts when shopping, get a certain merchandise and the other features. 

                       We must to calculating finance charges such as : average daily balance, we pay interest on the average balance owned during the billing cycle. The creditor figures the balance in our account on each day of the billing cycle, then adds together these amounts and divides by the number of days in the billing cycle. Adjusted balance, we pay interest on the opening balance after subtracting the payment or returns made during the month. Previous balance, we pay interest on the opening balance, regardless of payments made during the month. Past-due balance, no finance charge is added if the full payment is received within the grace period. If it isn't received, a finance charge for the unpaid amount is added on to our next bill. To figure average daily balance we should calculate the total cost of loan. To estimate the total cost of loan amount of the loan times APR times number of years. And than to estimate the amount of monthly payments by total to be paid divided by number of month of the loan.

                Credit card also have a credit card do's and dont's . Shop around , we must look at various sources. Read and understand the contract, before we want to apply a credit card we must read and understand the contract carefully, don't rush into signing anything, one a contract is signed, get copy of it , know the penalties for missed payments. Know our cost , figure out total price when paying with credit, make the largest payment possible, know the penalties for missed payments, buy on installment credit only after you have evaluated all other possibilities, don't be misled into thinking small payments will be easy.