Credit cards offer convenience and increased spending ability. Because of the range of credit limits, the best credit card is available to those cardholders who are diligent in monitoring a card's use and in making monthly payments in order to avoid financial mishaps.
The credit card, a small, plastic card that allows the holder to buy goods or services on credit, has almost become a necessity in modern society. Typically issued by a lending institution as either "secured” or "unsecured” credit cards, they differ from charge cards in that a charge card must be paid in full at the end of each month. Additionally, "pre-paid” credit cards are not actually credit cards since they do not offer credit; only the amount of money stored on the card is available.
Lending institutions, pending the review of an applicant's financial and credit history, issue unsecured credit cards. When awarded, the card has a credit line (the amount of money that can be charged to the card), and an interest rate for unpaid charges to the card. The best credit card will have interest rates and fees that are the lowest allowable, based on the applicant's credit profile. Lending institutions are required to provide, in writing, information on all fees, charges, and conditions.
Secured credit cards are cards issued with conditions determined by a special savings account from the card owner. The money in this account acts as security against the card owner failing to pay off accumulated charges. It helps determine the available credit line, along with additional requirements established by the issuer. The amount required may be as low as 10% of the desired credit line, or 50 to 100% of it. A secured credit card is the best credit card for those with little or no credit. Since the holder must make monthly payments, which are reported to credit monitoring agencies, timely payments improve the users credit rating.
For the consumer, convenience, low interest rates, and low fees are the most attractive features of the best credit cards. They eliminate the need to carry cash, and essentially provide a short-term loan to the user for a wide range of transactions. However, careful monitoring of all charges, monthly balances, and monthly payments is required in order to retain a good credit rating.
James Strang
