CREDIT CARDS

With the passage of time we are moving towards the era of electronic money and in the longer run paper money would be replaced by electronic money because of many purposes such as ease, security etc. and credit cards are the best example of electronic money available in the current world.
So, this article would provide a thorough understanding of what actually is a credit card, its types and how does it works.
-CREDIT CARD
A credit card is a card which is made of plastic, used to pay for goods and services from the lender’s behalf. The one who issues the card, (mostly a bank) creates a revolving account of the cardholder, from which the individual can borrow money for payment of different goods etc. but it is a loan, and he has to pay it back with interest for future payments.
-Types of CREDIT CARDS
Nowadays credit cards come in a wide range and variety and do have many different types depending on needs of the client/borrower. Some of them come with easy terms and conditions while other does not but not all credit cards are available for everyone. The ability to acquire or have a credit card depends on meeting requirements of the institution that is giving you the card. Credit card issuers are interested in knowing about your credit history by finding previous reports etc. Narrowing it down, Following are the few basic types of credit card:-
• Secured credit cards
These cards are also known as pay-as-you-go cards. When an individual opens an account, he deposits some money into his account. This regulates the card holder's credit line. It is often based on a specific percentage of the deposit which is in between 50-100 usually, of what you put in to your account. These cards have annual fee as well as annual high interest rates. Most people use these cards for small purchases that can be easily paid back.
• Standard Credit Cards
These cards are those which have a general purpose and have revolving credit lines of cardholders. These type of cards are issued to a certain age limit (18 and above) who are able in meeting the institute’s minimum credit criteria. There isn’t any requirement for deposits and the credit limit is establishes by the card issuer.
• Reward Cards
Many cards do have reward programs or systems that can have an impact on your spending. These type of cards give its holders leverage in different forms such as hotel stays, air travels, etc. however, these cards have very complex terms and conditions. Preferred thing is to pay your annual fee, because a person might face a lot of difficulties if he goes other way around.
• Specialty Credit Cards
These types of cards are typically obtainable through some kind of partnerships, affiliations, brand retailors etc. These types of cards often share a partnership between different organizations that is because of any social cause, professional or alumni associations. A small level of purchase goes towards the proposed organization.

-Working of a CREDIT CARD
The usage of credit card is more or less like getting a loan. It is never for free, every time you are using your card, you are actually borrowing money and you need to return it back as per agreement for keep your card working for future too. If you are choosing to pay back the money borrowed, over the time the institution/bank adds an amount of interest to your account that you have to pay along with the borrowed money.

-Why CREDIT CARDS areneeded?
As credit card is a short-term credit facility, so people often need these types of loans for small scale loans, for shorter period of time that looks relatively convenient to them. However, most people take loans due to the facts:-
 To build credit
 To shop online
 To earn rewards
 To save money from purchases
Mostly credit cards do provide convenience but sometimes they can also land you in debt through unwise decisions. In order to minimize the risk, avoid accumulating too may and pay back the debts in time, you should always be aware of the terms and conditions and take measures accordingly to save yourself from fraud.