Bank Credit Cards

Bank Credit Cards today are part and parcel of everyday life and are as ubiquitous as air and water. Credit cards have become an important source of identification if one wants to rent a car, buy the latest gizmo, or go on a vacation. In a country like the USA, where a majority of the citizens usually have at least one, sometimes two or three, credit cards, it becomes necessary for both high-end and convenience store owners to have provision for payment using the cards.

Bank Credit Cards today are part and parcel of everyday life and are as ubiquitous as air and water. Credit cards have become an important source of identification if one wants to rent a car, buy the latest gizmo, or go on a vacation. In a country like the USA, where a majority of the citizens usually have at least one, sometimes two or three, credit cards, it becomes necessary for both high-end and convenience store owners to have provision for payment using the cards. If used wisely, credit cards provide many benefits and the transactions being cashless, the user need not worry about carrying cash all the time.

The use of credit cards originated in the United States during the 1920s, when individual companies, such as hotel chains and oil companies, began issuing them to customers for purchases made at their own businesses. This use increased significantly after the Second World War. In the 1960s, bank credit cards were introduced by various banks and financial institutions. The bank credits the account of the merchant as sales slips are received and it accumulates charges to be billed to the cardholder at the end of the billing period. The cardholder, in turn, pays the bank either the entire balance or in monthly installments with interest.

Bank Credit Cards: Advantages and Disadvantages

The advantages of using bank credit cards include:

Purchasing power: Credit cards empower a customer with ease of buying things. Whether he/she is booking airline tickets or renting a car, credit cards give him/her all the convenience and comfort of cashless transactions. The process is also quick and easy

Purchase protection: Some bank credit cards offer customers protection against lost or stolen goods that are purchased using the card. Some banks also provide insurance cover to compensate for the damages done.

Credit line: As important as it is to build a good credit history, it is equally important to manage one’s credit card finances wisely. Making regular payments helps one build an excellent credit history.

Using credit cards also entails some disadvantages, such as:

Budget problems: Most credit card users spend more on their card than they can handle. So injudicious spending can burn a big hole in one’s pocket and the heat is felt when the debts start accumulating and hefty interest rates and late fees are applied.[br]

High interest rates: Most credit card companies charge an exorbitant amount of interest on each balance. This is how they keep their finances running and this is how most users end up in debt and struggle to make both ends meet.

Credit card fraud: This is committed when someone can steal the card completely or steal the numbers from a user. Online credit card fraud is rampant around the globe. The statement at the end of a month reflects the exorbitant amount incurred on a card. It is wise to report any misuse to the card issuing company, so that it can block the card and prevent misuse.