Perhaps the greatest enablers of e-commerce, and modern day commerce in general, are credit cards. Credit cards, when managed properly, are great financial tools. However, it is important to distinguish credit cards from other types of cards such as debit and charge cards. Credit cards allow you to borrow money which must be repaid almost always with interest, i.e., a cost you repay in addition to the amount you borrow. Debit cards are used to access money you actually have in a bank or other financial institution. Your balance is reduced instantly when you use a debit card. Charge cards are like a combination of credit and debit cards. You do not access your own money when you use charge cards but normally you must pay off the entire balance each month. If you do, there are no interest costs. Some companies will convert charge card balances to credit card loans if the monthly balances are not paid in full. Some cards also have membership fees, which are fees you pay just to have the card whether you use it or not.
Credit cards are great for transacting all kinds of business and gaining access to funds that you need and/or want but don’t have. You can use them to make emergency repairs, start a business, or just treat yourself to something nice! But since there are different kinds of cards, you should choose one that fits your lifestyle. Some have lower interest rates than others. Some pay cash back every time you use them. Some accumulate rewards when you use them. Some are great if you travel a lot. Some are designed for business use.
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