Credit Card Info

What is Credit Cards
Credit card is a card (usually plastic made) issued by financial intuitions to their customers or known as card holders. Credit card allows the holders to make purchases of goods and services on credit.

How Credit Cards Work
The issuer of the card will set a credit limit or line of credit to it holders, which determine how much the holders can borrow for payment to merchant or for Cash withdrawal via ATM in the form of cash advance

The issuer will bill the holders at the end on the billing cycle on monthly basis. The card holders must pay the bill in full or at least a minimum payment before the due date as agreed. There will be an interest charge to the card holders if the bill not paid in full amount, until the debt is settle. It’s not wise to ‘owe’ banks on the credit card bill, as the interest usually much higher than any form of loans - example personal loan. Folks, hence please spent wisely on what is really needed and within your limit. Based on the statistics, there are many bankruptcy young adults due to ‘bad debt’

Of course, credit card giving lots of conveniences to the holders without the need to carry huge sum of cash; example down payment for a car or any big purchase as long as the purchases did not exceeded the credit line or limit agreed with the issuer

a) Interest Charges
There will be interest charges to the Credit Card holders if the balance not paid in full each month on the outstanding balance

Let’s take an example based on John case study, if John had charged $500 on his account and repaid in full within the grace period (is a interest free period between statement date and due date), then there would not be any interest charge. However, if John only paid $400 or which mean $100 unpaid, interest would be calculated or charged until full payment or settlement. The interest charges and other details usually can be found in the cardholder agreement documents.

b) Balance Transfer
Balance transfer is another powerful tool or mechanism which good to both the issuer and card holders. Usually, Balance transfer allows the card holders to transfer the outstanding amount from existing issuer to other issuers; Example from Bank ‘ABC’ to ‘DEF’

Banks is using Balance Transfer program to attract new customers by allowing the card holders to transfer the balance from one to the other. Most of the time, the cards holders will enjoy lower interest rates for the transfer and also can be converted into monthly repayment (tenure). This is beneficial for card holders who has a huge outstanding amount.

c) Credit Card Security
Credit Card security is the main threat to both the issuers and card holders. In view of the technology advances, the Credit Card security has been changed since the early day of magnetic stripe which tend to clone to the advance chip with many built in security features.

Based on the expert, below are some of the tips on cards security
- Do not leave your card unattended
- Do not reveal the card information to unknown person
- Do not write your pin on the card or anywhere visible. Remember it
- Enroll the card security verification such as 3D security code