The use of credit cards is becoming more and more frequent, in some cases because it allows the holder to acquire products that he could not buy without the benefits that this service offers. However, keep in mind that when using a credit card and dividing the payments in several installments, you would have to assume interest costs that could vary depending on the card and the conditions you have, making purchases with deferred is the same as purchasing a Credit, therefore, must be done responsibly. There is also the possibility that you do not have to pay interest, however this also depends on the credit card entity.
The credit card service in the United States is diverse; the interests, promotions, commissions, charges, etc., depend on each card, as well as the points programs or the alliances they have with airlines, so you have to analyze very well the card you want to acquire so that it has benefits that are useful to you.
The first difference that we find between credit cards is the annual percentage rate or APR that you must assume for deferred purchases.
The grace period also depends on each credit card and corresponds to the number of days that the entity assigns the customer to pay the bill without incurring additional charges, usually only applies to new purchases, and most cards do not have a grace period for cash advances and balance transfers.
Some credit cards have annual charges, this value corresponds to a membership or participation fee that can be charged in installments. There are also transaction fees and other additional charges, they can be for using the card for advances or cash advances, for payments outside the established date, or for exceeding credit limits.
Besides the differences mentioned above between credit cards, there are another details regarding the main credit cards.
The transaction fee paid by the merchant varies from 1.43% to 3.5%
The popular partners for each card are the following:
- Visa: Chase, Bank of America, Wells Fargo, U.S. Bank
- MasterCard: Citi, Capital One, United, SunTrust
- American Express: Delta, Hilton, Marriott
- Discover: NHL
American Express and Discover are issuers that provide credit cards to consumers, being directly responsible for the analysis of each client and data verification to know their credit rating.
There are credit cards that function as intermediaries between the bank and a merchant’s bank, they are the ones who analyze the payment requests to check their veracity, after confirmation, they approve the transaction and process the payment. Visa, MasterCard, American Express, and Discover are processors.
Since each credit card offers different benefits, this provides options depending on individual needs and preferences. If someone travels a lot they would favor the card that offers travel miles to apply to the ticket purchase, or maybe someone prefers the card that offers the highest percentage of cash back based on the purchases made. The current benefits that credit cards offer are attractive but it is recommended that you use the credit cards taking into account your budget and not reaching the point that you cannot afford even the minimum monthly payment required. Remember, you are the one in control of your financial life.