How Credit Cards Work

Have you ever someone in line behind the shop and saw him shuffle through the stack, which should be at least 10 credit cards? Consumers with the amount of cards, always a minority, but experts say that most U.S. citizens at least one credit card - and usually two or three. It is true that credit cards have become important sources of identification - if you want to rent a car, for example, you really need a credit card. And used wisely, credit card convenience and allows you to purchases of almost one months to pay the financial costs kick in

That sounds good in theory. But in reality, many consumers may not benefit from these advantages, as they balance on their credit card every month, with financing costs, which can go up to incredible 23 percent. Many hard to resist, with the old "plastic" for impulse purchases or buy what they really can not afford. The figures are impressive: In 1999, American consumers charged about $ 1.2 trillion from their all-purpose credit cards.

In this article we will examine a credit card - how it works, both financially and technically - and we offer recommendations on how to make purchases by credit card. (Experts believe this should be a project on a scale of buying a car or mortgage!) We will also describe the various credit plans, talk about your credit and how it would have an impact on your ability, and discuss how to fraud avoid using a credit card - both online and in the real world.

Let's start from the beginning. Credit card thin plastic cards, usually from 3-1/8 inch 2-1/8 inches, in which the definition of information, for example, signature or a picture and allows the name of the person in it is liable for the purchase or a service, his account - charges for which he is at regular intervals. Today, information about the card is read by an automated cash machines (ATMs), store readers, and a bank of computers and the Internet.

According to Encyclopedia Britannica, the use of credit cards from the United States during the 1920's, when companies such as hotel chains and oil companies have begun to be issued to customers for purchases in the company. This use has increased significantly since the Second World War.

The first universal credit card - one that could be used in a variety of shops and businesses - was from Diners Club, Inc in 1950. With this system, credit card companies annual fee and accounts monthly or once a year. Another large map of the Universal - "Do not leave home without it!" -- A company in 1958 American Express.

Later, bank credit cards. According to the plan, bank loans by the seller as revenue slides will be available (this means merchants are paid quickly - something they want!) And assembly costs at the end of charge cards for the period. Objectives, which in turn makes the bank or the entire balance each month or part interest (sometimes with fees).

First National Bank bankamericard plan, which began in the state in 1959, Bank of America in California. This system was licensed in other states since 1966 and was renamed Visa in 1976.

Other major bank cards followed, including Master Card, a former captain of the charges. To ensure enhanced services such as food and shelter, many small banks earlier than credit cards are offered at local or regional level formed relationships with major national or international banks.