What is a Credit Card and Do You Really need it?

Posted by Nick Niesen on October 29th, 2010

Credit card have been with us for quite sometime and they are considered as one of the most recognized payment systems across all borders and are internationally accepted around the world. Credit card has never been more accessible around the globe than it is today.

Credit cards are one of the most used modes of payment today, maximised all the sales potential, and thus decreasing loss of sales due to lack of payment options. Credit card payments processed by American Express,Mastercard,Visa and Discover are subject to a ?zero liability? policy?which means, a guarantee that you will not be held responsible for any fraudulent charges.

Nowadays, Credit card machine is the tool for accepting credit cards. It has been known that, Credit cards can really help you build good credit if you use them wisely. With the increase in usage internationally, Credit Card payments are made to be secured and all your details are highly encrypted. This plastic card lets you charge a meal or pay for a travelling expenses on a credit card and you pay the bill at later convenient time.

Cardholders:
Consumers (That?s us) are the recipients of credit cards issued by a bank (Any Bank). CARD VERIFICATION VALUE (CVV). CVV is a relatively new and reliable authentication procedure that was established by all major credit card companies so as to enhance their efforts towards reducing credit card fraud during any internet transactions.

Credit cards grant the card holder, credit purchases within their credit limit. Credit cards do carry interests on the outstanding balance and it may be carried over for a period of several months. Of course you should always remember to pay the debts on all the cards that you possessed in time.

Since credit card is a payment made at a later stage, there are tendency that we keep everything (payment) on hold till next month, next month and next month, where, without you knowing, your credit bills are rising and rising and we called it ?Credit Card Debt"

Credit card debt initially grows in 2 ways. One is due to addition of a new debt on account of fresh spends on your credit card and the second is due to the addition of "Low interest" interest charges to the existing credit card debt. Once your credit card debt grows too much that you can't handle it, you will then need assistance for all these credit card debts. We called it Credit Card Debt Consolidation.

The process of credit card debt consolidation can be referred to as balance transfer process (you transfer the balance or debt from one credit card to another). When most people think of debt consolidation, they think of those companies with the commercials featuring people in desperate situations, worrying about how they are going to pay their credit card bills.

Credit card debt consolidation could also be called as a loan. These loan could be a personal loan, a home equity loan, or a loan specifically for credit card debt consolidation. Many people view debt-consolidation loans as a way of helping them get out of debt, but please do take note that these consolidation loans simply combine debt.

As from Today, the average family owes roughly $7,000 on their credit cards. (According to Sources).