First Credit Card

First Credit Card

Credit was first used in Assyria, Babylon and Egypt 3000 years ago. The bill of exchange - the forerunner of banknotes - was established in the 14th century. Debts were settled by one-third cash and two-thirds bill of exchange. Paper money followed only in the 17th century.
The first advertisement for credit was placed in 1730 by Christopher Thornton, who offered furniture that could be paid off weekly.
From the 18th century until the early part of the 20th, tallymen sold clothes in return for small weekly payments. They were called "tallymen" because they kept a record or tally of what people had bought on a wooden stick. One side of the stick was marked with notches to represent the amount of debt and the other side was a record of payments. In the 1920s, a shopper's plate - a "buy now, pay later" system - was introduced in the USA. It could only be used in the shops which issued it.
In 1950, Diners Club and American Express launched their charge cards in the USA, the first "plastic money". In 1951, Diners Club issued the first credit card to 200 customers who could use it at 27 restaurants in New York. But it was only until the establishment of standards for the magnetic strip in 1970 that the credit card became part of the information age.
The first use of magnetic stripes on cards was in the early 1960's, when the London Transit Authority installed a magnetic stripe system. San Francisco Bay Area Rapid Transit installed a paper based ticket the same size as the credit cards in the late 1960's.
The word credit comes from Latin, meaning "trust".

Imrove your Credit

Imrove your Credit

1. Stop using your credit cards.

In a bad credit situation, one of the worst things you can do is continue accumulating debt by making credit card purchases. Put your credit cards away until you have more control of the situation.

2. Get a copy of your credit report.

You can't begin repairing your credit until you know exactly what you need to work on. Obtain a copy of your credit report from each of the three major credit bureaus to find out which accounts need work and which are just fine.

3. Clean up your credit report.

If your credit report contains incorrect information, you have the right to have it removed. Your credit report will include information about disputing inaccurate information with the credit bureaus.

4. Get current on delinquent accounts.

Your payment history makes up 35% of your credit score. Getting current on your delinquent accounts will have a great impact on your credit.

5. Don't put in any more credit applications.

As long as your credit is in repair mode, you should avoid making any more applications for credit. It's likely that you'll get turned down for credit and the applications will only decrease your credit score.

6. Keep accounts with balances open.

You might be tempted to close out credit card accounts that have become delinquent, but wait. Before you close any account make sure it won't negatively affect your credit.

7. Call your creditors.

Right now they're certainly the last people you want to talk to, but you'd be surprised at the help you might receive. Talk to your creditors about your situation. Many of them have temporary hardship programs that will reduce your monthly payments until you can get back on your feet.

8. Pay off your debts.

You will have to start paying off your debts to improve your credit situation. If you don't have the money on hand, sell some of your belongings to speed up the process. It will be a sacrifice, but the financial freedom you gain will be worth it.

9. Get professional help.

Resources, like consumer credit counseling, are available to assist you. If you are overwhelmed by your credit situation, seek professional assistance. You can locate a credit counseling agency through the National Foundation for Credit Counseling.

10. Be patient.

Your credit wasn't damaged overnight, so don't expect it to improve in that amount of time. Continue paying your debts and over time you will see an improvement in your credit.

Over Limit Charges

Over Limit Charges

Definition:

Fee imposed for exceeding your credit limit in purchases, fees, or finance charges, usually only applies to revolving credit.

History of Credit Card

History of Credit Card

Credit cards have become an established and inescapable part of our society. They are one of the primary forms of completing a purchase transaction in most retail businesses. Even tradesmen such as appliance repairmen or plumbers accept them. How did this all come about? Let's examine the history of the ubiquitous credit card.
The Encyclopedia Britannica tells us that, "the use of credit cards originated in the United States during the 1920s, when individual firms, such as oil companies and hotel chains, began issuing them to customers." But let's see if we can pin it down a little closer.
It is widely believed that the creator of the original credit card issued by a bank was John Biggins in 1946. Biggins worked in Brooklyn, New York at the Flatbush National Bank. He called his creation the "Charge-It" program.
Here's how it worked: Transactions were made between Flatbush National's bank customers and merchants that conducted business locally. These business owners would deposit the sales slips at Flatbush National and in turn the bank would proceed to bill the customer. A brilliant move, the Charge-It program was a convenience for the bank customers and a boon for the local merchants, who reeled in the extra business.
Another theory credits Diner's Club as being the first credit card back in 1950. The credit card issued by Diners Club was conceived by Frank McNamara, Diners' Club creator. It was only used to pay restaurant bills. The intent was to give the dining member a feeling of security because he or she did not have to carry a great deal of cash when going out to eat in the evening.
A minor technicality of this theory is that the Diner's Club Card is really a “charge card “ rather than a credit card because the user could not carry a balance over from month to month.

Secured Credit Cards

Secured Credit Cards

A secured card requires a cash collateral deposit that becomes the credit line for that account. For example, if you put $500 in the account; you can charge up to $500. You may be able to add to the deposit to add more credit, or sometimes a bank will reward you for good payment and add to your credit line without requesting additional deposits.

Cash Back Credit Cards

Cash Back Credit Cards

Many credit cards will now offer you cash back incentives for using their credit cards. Depending on how much your balance is and how often you use the credit card, you can earn cash back for your purchases. Some companies offer 1% off your balance while others, like Sears, will offer you cash off purchases made in their store. Either way, if you are planning on using a credit card, finding one that will offer you a cash incentive is a smart choice.

Credit Cards For Bad Credit

Credit Cards For Bad Credit

It is possible, even with bad credit to obtain a credit card. These cards will come with some restrictions not typically found on other types of credit cards. Your credit limit will be lower and your interest rate higher. Some may require you to have a secured credit card, meaning you have to maintain a savings or some other type of account that will cover the expenses on the credit card. Once you have established that you will be responsible, some, if not all, of your restrictions may be lifted.

Prepaid Credit Cards

Prepaid Credit Cards

A prepaid credit card account is opened by depositing money into that account, much in the same way you would make a deposit to open a checking or savings account. Once you have money in your account, you're issued a prepaid credit card that can be used anywhere one would use a regular credit card. The best part of the prepaid credit card is that you can charge to your heart's content and you won't be in debt. The money is yours and once it's gone, you can't spend any more until you make another deposit. There are no bills and no interest charges. It's the same principle as using a debit card linked to a savings or checking account.If you're frustrated because a credit card is necessary to get by in today's world, but can't apply for one because of bad credit, you might consider a prepaid credit card. You'll have most of the advantages of a credit card, and you won't have to worry about interest charges. Sounds like a prepaid credit card is a pretty good deal.

Prepaid Debit Cards

Prepaid Debit Cards

Prepaid debit cards are one type of credit card that has grown significantly in recent years. Although they work like a traditional credit card when making a purchase, that is where the similarities end. With prepaid debit cards, you have actually prepaid and set the credit limit by depositing money onto the debit card. Depending on how much you have deposited into the debit card's account depends on how much credit limit you want on that card. This is a great way to have the convenience of a credit card without the chance of charging more than you can afford to pay off.

Student Credit Cards

Student Credit Cards

While you are a student, the only way to make ends meet may be through the use of a credit card. However, before you indulge in the business or charging, there are three things that you should know about student credit cards.

1. APRs Vary.

APRs are the cost of borrowing money. Though many credit card companies are more than willing to give you credit, that credit comes with a price. To save yourself money, you will want to choose a card that has low rates. Many student credit cards have a zero percent APR. These are definitely the types of cards you want. If you already have a card and you are not sure what the APR is, check the bottom of your credit card statement. If the rate is high, try negotiating a lower rate with the credit card company. If the company is not willing to negotiate, try moving your debt to a credit card with lower rates (and no annual fees).
2. Credit Cards Have Bonuses.

Some student credit cards offer cash-back bonuses on purchases, such as gas and food. These are great credit cards for students, because you actually make money when you charge items, especially if you pay off the balance promptly. Other student credit cards offer air travel rewards based upon a point system. These type of rewards can come in very handy when you want to visit home, take a vacation, etc.
3. Your Credit Score is Important.

Your credit score is a three-digit number that appears on your credit report. The higher your credit score is, the better your chance will be of getting student credit cards with low interest rates. If you need to find out what your credit score is, you can get a free credit report online.

Business Credit Cards

Business Credit Cards

A business credit card offers the business owner the opportunity to keep business and personal expenses separate. The credit card may offer special business rewards and saving opportunities that go above and beyond what the individual credit card owner may have. Since money management is essential in successfully running a business, the card may offer an expense management service that will allow you to keep track of the outgoing money. You can obtain additional credit cards for employees who may need them for travel expenses and such as well as have a higher credit limit than you normally would on an individual credit card.

Types of Credit Cards

Types of Credit Cards

Different types of credit cards offer several different options, depending on what your needs are. Some are geared toward individual consumers, while others are set up in ways that work best for small business needs. To know what type of credit card fits your needs, let's review a few of your options.

1. Business Credit Cards

2. Student Credit Cards

3. Prepaid Debit Cards

4. Credit Cards For Bad Credit

5. Cash Back Credit Cards

Credit Card Benefits to Customer

Credit Card Benefits to Customer

Credit cards can be one of the most useful tools in tracking your expenses. It is great how they work. You make a purchase on your credit card, the charge is sent to the bank, the bank approves the transaction, and the bank posts it on a website or makes it available for you to download into your personal financial software.
You can't beat the ease of use. If you pay the balance at the end of each month there is no expense for this service. In fact with many of the reward programs available many banks will basically pay you to use their credit card.
This only works of course because many people do not pay their balance at the end of the month. If everyone did, the banks would start losing money and they definitely wouldn't have any of those programs that give you free flights or points toward buying merchandise.
The average amount owed by an American with credit cards is over $8,000. Only 1 in 20 Americans have over $8,000 in credit card debt, but many of these have so much more credit card debt, that it swings the average up to $8,000. For the banks this is a windfall. The interest rate on credit cards is very high, so they make a tremendous amount of money of people carrying balances.
If you have the discipline to pay of your balance at the end of each month and not spend more than you have (just like a checking account). You'll basically get the credit card service for free--paid for by people who don't have enough discipline to pay off their balance each month.
You get free record keeping, free reward points, and many other features. Many credit cards offer some type of insurance if your purchase is stolen. Others offer extra life insurance policies for air travel booked on their cards. Some credit card companies offer extended warrantees on anything you purchased with their card.
One of the most important benefits of a credit card company is the fact that they will usually stand up for a good customer that is being charged in correctly. For example, lets say you cancel an order with a merchant and they ship you the goods anyway. When you try to return the items, the merchant says that you can't. A quick call to your credit card company will probably be all that is necessary to resolve the situation. Credit card companies can revoke money from merchants and this is exactly what they will do if you complain that you were shipped an item that was canceled.
All in all there are many benefits you can obtain by using a credit card--all for free as long as you pay off your balance at the end of each month. Other people aren't going to pay off the balance and they are paying for you to get free service.

Credit Card Interest Charges

Credit Card Interest Charges

Your credit card's interest rate isn't the only thing that affects how much you end up paying on your credit card bill, though it is a major determining factor. There is a difference between your interest rate and your interest charge. In simple terms, the rate is the percentage of your balance that your interest charge will be based on. The interest charge is the actual number of dollars that you pay for interest - based on your interest rate.

How Credit Card Work

How Credit Card Work

When a purchase is made, the credit card user agrees to pay the card issuer. The cardholder indicates consent to pay by signing a receipt with a record of the card details and indicating the amount to be paid or by entering a personal identification number (PIN). Also, many merchants now accept verbal authorizations via telephone and electronic authorization using the Internet, known as a 'Card/Cardholder Not Present' (CNP) transaction.Electronic verification systems allow merchants to verify that the card is valid and the credit card customer has sufficient credit to cover the purchase in a few seconds, allowing the verification to happen at time of purchase. The verification is performed using a credit card payment terminal or Point of Sale (POS) system with a communications link to the merchant's acquiring bank. Data from the card is obtained from a magnetic stripe or chip on the card; the latter system is in the United Kingdom and Ireland commonly known as Chip and PIN, but is more technically an EMV card.

How Credit Card Issue

How Credit Card Issue

Credit cards are issued after an account has been approved by the credit provider, after which cardholders can use it to make purchases at merchants accepting that card.

Credit Card

Credit Card

A credit card is part of a system of payments named after the small plastic card issued to users of the system. It is a card entitling its holder to buy goods and services based on the holder's promise to pay for these goods and services. The issuer of the card grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user. A credit card is different from a charge card, where a charge card requires the balance to be paid in full each month. In contrast, credit cards allow the consumers to 'revolve' their balance, at the cost of having interest charged. Most credit cards are issued by local banks or credit unions.