ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel
  • »
  • Personal Finance»
  • Understanding Finance

The basic fundamentals behind Personal Credit Cards.

Updated on January 13, 2016
Source

Credit Card Basics

The basic aspect of a Credit Card is that it is a card with a line of credit attached to it. You can use it to make purchases and pay back the balances owed on the credit card monthly. Credit card companies want to increase the amount of people that have their cards on a daily basis. The competition is getting stronger each day in this market which will give us more reasons to use a credit card. With the increasing use of credit cards, they have become a lot more complex with different features such as Rewards, Balance Transfers, Cash Advances, Overdraft Protection, Annual Fees, Benefits, Discounts, and more. In this article I will explain each feature with specific examples.

How to spend money

There are four basic ways to spend money using a credit card; Purchases, Balance Transfers, Cash Advances, and Overdraft Protection.

Purchases - This is the easiest way to spend money by just swiping the card at any P.O.S. (Register) that accepts that type of card. There are generally no fees for making a purchase but you could pay interest if you don't pay the balances by the due date each month.

Balance Transfers - By using a balance transfer you can consolidate your balances your paying interest on to one credit card and benefit from potentially paying less interest, having one easy payment, or even paying no interest for a period of time. Although some credit cards charge a fee with this feature so make sure to ask the credit card issuers about any possible fees or interest rates!

Cash Advance - A cash advance allows you to obtain physical cash off of a credit card. This is a fast and convenient way to get money quickly. Unfortunately, it normally comes with a fee and a higher interest rate than a purchase or balance transfer. If you can wait a few weeks, see if the credit card issuers can balance transfer into a checking account for a smaller fee with normal interest rates to save money!

Overdraft Protection - This is a feature where you can attach the credit card to your checking account to transfer funds from the card to your account, if your account goes to a negative balance. This can save you from some embarrassing moments. This normally has a small fee attached and a higher interest rate as well.

Each of these methods have their benefits and drawbacks, they are used in different situations. To make the most of a credit card, each person must carefully consider how they want to use the credit card. Whether its to make large purchases, build credit, pay off debt, for peace of mind and convenience are all factors to consider.

Source

Rewards Incentive

Today, most credit cards have an incentive attached to the cards whether it is for example cash back, points, rebates, or travel miles. They come in various types, amounts and even bonus rewards in specific categories on some cards. For example, the Citi Double Cash card has a unique rewards incentive by offering 2% cash back, 1% as you spend the money and 1% as you pay. This gives you an incentive to make purchases and pay off the balances as soon as possible. My personal favorite is when the credit card issuers offer $100 or more dollars in rewards for just using the card so much in a specific time frame. Be sure to ask about any limits, expiration dates, or requirements involve with the rewards and bonuses!

Source

Benefits and Discounts

Credit Cards have various benefits attached that are specific to the type of card and the card issuer, For some examples Wells Fargo offers Cell Phone Protection with their Visa cards, while Target offers a 5% discount on their merchandise with the Target Red Card. Some cards offer things such as a 24/7 Concierge Service, Hotel benefits, Auto Rental Collision Damage Waivers, and so much more! The next time someone offers you a credit card, ask them, "How does this card benefit me?" These benefits can be the decision maker between multiple credit cards for if you would like to use one credit card for the rewards and another to have in case of specific situations or unexpected expenses. Think carefully before choosing which credit cards will be in your wallet!

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: "https://hubpages.com/privacy-policy#gdpr"

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)