Banking & Credit Cards
- Banks offer a range of credit card options to appeal to their varied customer base. For example, college students, senior citizens and sports fans can apply to receive a credit card through many banks. The terms of each card are tailored to the need of each customer. College students may receive incentives for good grades or discounts to entertainment venues. Consult with a banking representative to determine which credit card product works best for your financial circumstances. Maintaining a positive relationship with your bank and keeping a good credit score improves your chances of approval on a bank credit card.
- Banks offer a special type of credit called a secured credit card. Secured credit cards require a security deposit into an account. The amount of your security deposit determines your credit limit. The money cannot be removed unless you default on your credit card agreement and need the money to pay off your debt. Secured credit cards are beneficial if you have no credit or have poor credit and need an opportunity to rebuild your score.
- Credit cards are a convenient payment option because they can be used at most retailers. Unlike a debit card, you can use your check card to make purchases online and by phone. Many consumers with checking accounts use check cards as a credit card alternative because check cards can be used anywhere major credit cards are accepted. However, check cards can only be used when you have adequate funds in your bank account. If you do not have the cash to support your transaction, your transaction will be declined or cause your account to become overdrawn. Banks generally charge an overdraft fee for each transaction charged to your card after your account is overdrawn.
- Critics of debit and check cards argue that credit cards are much cheaper to use. Overdrawing your account has much greater penalties than exceeding the limit on a credit card and dries up your cash reserves. Some banks also charge fees per use on your debit card which can add up over time. Also, debit and check cards frequently have daily spending limits which can prevent you from making important purchases without advance permission from your bank. Debit cards are a secure method of payment since they require a PIN to access money in your account, but the amount of your transactions will always be limited to the amount of cash in your bank account.
