Important features of credit cards

Posted by Nick Niesen on October 29th, 2010

In today?s time I feel most of you hold a credit card but having a credit card with no basic information about it could be harmful for your financial stake. Credit card is an instrument that could be easily used to purchase something whereby you owe that money to the person who has issued the credit card to you.

There are innumerable features of a credit card as many cards are there.

1. The first and foremost feature of any credit card is the rate of interest you are obliged to pay on its unpaid balance. In case of most of the cards, you get 30 days to make payment for any initial purchase and if you pay the balance in full then there are some cards that don?t even charge any interest rate. If the charges are not being paid within the period of 30 days then the remaining balance is charged with an interest rate charge. This interest rate depends upon number of factors such as current APR and your credit rating.

2. Other feature of credit card is the credit limit that is the amount of money you can charge before the credit company cuts you off. The credit limit also depends upon your credit rating because if you have a good credit rating then you will be given higher credit limit.

3. Another feature that most of you overlook is the fees associated with having a credit card also known as ?annual fees.? Many credit don?t have an annual credit fee but there are other fees included such as cash advance fees, late payment fees, balance transfer fees that often lead to higher rate of interests over credit limit increase fees, return item fees and many other fees that you need to review before using the card.

4. There are mainly three types of cards namely; regular credit cards, premium cards and secured credit cards. A secured credit card asks you for a security deposit and the higher the deposit is, the higher credit limit is given. Regular credits don?t ask for any credit deposit but they don?t have many features and benefits. Premium credit cards carry the highest credit limits and usually come with additional features such as product warranties, emergency services etc.

5. Another feature is the rebate you get on the purchased items whereby some cards refer it as cash back incentives. For example, you make a purchase of $100 and you get a percentage of the money back but this percentage depends upon the card you hold.

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