Hey Friends! Today’s post is 4 things should know before getting your first credit card! and we will see credit card information, types of credit card, benefits of credit card and most importantly, what are the pros and cons of credit card? Come on, let’s find out.
4 Things Should Know Before Getting Your First Credit Card
1. Credit Card Information
A credit card is a plastic card with embedded information that can be accessed electronically using a PIN (Personal Identification Number). Credit cards have two parts; the front side contains a magnetic strip, and the backside contains the embossed account number, expiration date, and signature line. When a customer makes a purchase, they provide their credit card information – including name, address, phone number, and signature.
The merchant then swipes the card through a magnetic reader, which reads the information contained on the card’s magnetic stripe. The transaction is then processed by the bank, which authorizes the payment before sending funds to the merchant’s bank. Many stores take credit cards as a method of payment, and some require customers to sign a receipt after making purchases. Merchants use this receipt to track sales and inventory. If the card is lost or stolen, the owner may report it immediately by calling the issuer. Issuing banks often charge customers fees if transactions are not authorized, and merchants pay additional fees to acquire new cards.
2. Types of Credit Cards
There are many different types of credit cards. These include debit cards, prepaid cards, reward cards, and check cashing cards. Debit cards are similar to cash in the sense that money is withdrawn directly from a checking or savings account. Prepaid cards are issued without any money being deposited at first. In return, these cards offer rewards based on spending. Reward cards offer discounts, free items, and other incentives. Check-cashing cards allow individuals to access small amounts of money by writing checks at locations where people receive direct deposits.
3. Benefits of Using Credit Cards
The biggest benefit of using a credit card is that credit accounts are good for both online and brick and mortar businesses. This means that if someone buys something online, they can get the item delivered via a shipping service. However, if someone shops at a physical store, they can use their credit card and save money overpaying cash. The second benefit of using credit cards is that they give customers a way to pay for goods that they do not want to carry around. Instead of keeping cash in their pocket or purse, they can just put the credit card in a wallet or purse.
4. Drawbacks of Using Credit Cards
One drawback to using credit cards is that if someone loses their card, they will lose all of the money stored on it. This happens because when the consumer uses the card to pay for something, the amount of money is deducted from the card’s balance directly. Another downside to using credit cards is the high rate of fraud. People who steal credit cards can use them to make fraudulent charges. Moreover, some consumers attempt to create duplicate credit cards to avoid paying off existing balances. Finally, credit card issuers may change the terms of agreements at any time, and the consumer may not be aware of the changes until they occur.
Pros and Cons of Credit Card
– You get what you want (almost) immediately
– No need to go to store for anything
– Can make payments online
– No monthly fees
Only certain stores accept them (only CVS Pharmacy accepts them)- You have to pay interest on purchases, if you don’t pay off the balance before the due date- There is a Rs.40 fee per transaction (this fee varies depending on the type of card you use)- If you lose your card, you’re stuck paying whatever the minimum payment would’ve been until you find someone who will take it (usually after 30 days)
So, if you’re looking for something quick and easy, then a debit/credit card may be just what you’re looking for. But if you’re planning on using it regularly and buying big things, then it’s not the right choice for you.
I hope this helped!
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