Credit Cards

A credit card is a payment method by which a cardholder pays for goods or services on credit, thereby creating a debt upon purchase. The allowed amount borrowed depends on the user’s credit rating, and banks charge monthly interest rates on the balance.

Credit Card History

A credit card is a payment method by which a cardholder pays for goods or services on credit, thereby creating a debt upon purchase. The allowed amount borrowed depends on the user’s credit rating, and banks charge monthly interest rates on the balance.

Credit Card History

Credit cards first arrived on the scene in the early 1900s, when department stores and oil companies issued credit to loyal customers, but the first modern credit card debuted in 1946. Known as the “Charg-It” card, Flatbush National Bank of New York issued cards to account holders, and it was for local use only.

American Express was the first bank to give national cards in 1958. Since then, the United States is credited as having the widest selection of cards in the world. Card types vary and include balance transfer cards, airline credit cards, business cards and low-interest cards.

Card Attributes

To find the best card, consumers can look on various websites to conduct a comparison. Consumers should determine the average costs associated with the card by reading contracts or documents before agreeing to any terms. Users must also be aware of annual fees, administration fees and late payment charges. Comparing interest rates between card companies is another key factor, and certain cards come with special benefits. Users should choose a card that matches their daily spending habits, such as gas rewards. Other cards offer a cash-back system, where the credit card institution shares a small fee percentage collected from merchants with the cardholder. Knowing the maximum spending limit is a necessity as well, but card applicants may not always know the granted amount unless they talk to a card associate before applying for the card.

Secured vs. Unsecured

There are many cards on the market, but consumers must know the difference between secured and unsecured cards. A secure card requires the user to deposit funds into an account to make purchases. Credit extends to the individual based on the amount of money placed in the account. This type of card is a good choice for people with a poor or meager credit history. Examples of cards in this category include Orchard Bank Secured MasterCard or the New Millennium Bank Secured Gold Visa.

Unsecured cards are usually for people with a higher credit rating.  Credit extends to the cardholder without the need for collateral.  A card of this stature may require no debt on the user’s record. Different types of unsecured cards include gas credit cards, rewards cards and balance transfer cards. Card examples in this category are the First Premier Bank MasterCard and the Citi Diamond Preferred Rewards Card.

International Credit Cards

The United States is a world leader in the credit card industry.  Credit is universal and found in many developed countries.  For example, the United Kingdom has more credit cards than people. In fact, U.K. cardholders spend an average of 10 billion pounds per month on credit card purchases. In addition, more than half of people in Britain own multiple cards, and two-thirds of adults use credit. The types of cards in the British Isles are similar to the United States, with options that include zero-percent APR, gas cards and travel rewards credits. Low-interest and zero-rate cards have become popular, especially since the market became bogged down with so many cards. If one were to find a credit card in Britain, borrowers should find a something with a lower interest rate, especially for people who carry large balances.

Like America, Britain has different cards based on a borrower’s credit standing. For instance, the platinum card is a status symbol in Britain, and it is for people with an excellent credit history. The platinum card comes with other benefits, such as concierge service and various rewards programs. The gold card is another one for people with a good credit history, and it comes with its own set of rewards. The standard card, on the other hand, is for people whose credit score is below standard. However, the U.S. credit card industry offers more pathways for borrowers with decent credit, including those with no credit history.

However, both nations offer business cards. Britain and the United States grant business cards so owners to pay for such things as office equipment, inventory and business trips. This type of card is suitable for keeping business finances separate from personal expenses.

Overall, it is easy for borrowers to get some form of credit in Britain and the United States, but other nations such as Singapore issue cards like candy in some respects. In fact, credit is so free flowing that borrowers must resist the temptation to attain multiple cards at once. This is due to the country’s thriving economy, and the amount of credit available correlates with a nation’s economic output.

State of the Industry

As a whole, the credit card industry stalled a bit after the 2008 financial crisis, with fewer Americans relying on credit. However, more Americans came to rely on credit over the years in the wake of high unemployment and wage stagnation. As the U.S. economy improves, credit is becoming a more viable option for more Americans. Eurozone nations, on the other hand, are keeping a tight lid on credit as the European Union continues to deal with economic woes. The Chinese are on their way in surpassing major credit nations. According to the Nielson Report, UnionPay, a state-backed credit card association, will issue 4.66 billion cards by 2016, breezing by Visa’s credit card issuance of 3.05 billion.

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