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Payment for goods and services by means of a card such as a Capital One credit card is increasingly common around the world. More and more people are also using a credit card to overcome budget problems or a cash flow squeeze for a few short days. Credit cards are issued by banks and credit card companies and allows you to borrow funds against a credit limit.
With a credit card, you can buy items without having a balance in your account, you simply pay back the amount you spent after a period of time. A credit card such as the Capital One credit card is best used for short-term financing as most balances on a credit card will carry an interest charge. Interest charges usually start about a month after you have made a purchase.
There are a few categories of credit cards which differ depending on who the issuer is and what you will use them for: Major Credit Cards, Store Credit Cards, Subprime Credit Cards, Secured Credit Cards.
Major Credit Cards: Major Credit cards such as the Capital One credit card are generally issued by credit unions or banks. These cards are issued on a credit card network, such as Visa, Mastercard, Discover or American Express. A reward card is a type of Major card which offers many attractive incentives based on your credit card spending – the American Express Platinum Card is an excellent example.
Store Credit Cards: This type of card is intended to promote the loyalty of customers to a specific store. It can be easier to obtain the approval of a store card than a major card but a store credit card can only be used at the retailer which issues it. The retailer often offers incentives including special discounts or sales for people who hold this card. Store cards are not usually issued on a credit card network.
Subprime Credit Card: These cards bear high interest rates, but they are easier to apply for as the requirements around a good credit history is less strict. Subprime cards are typically issued on the Visa and Mastercard networks and are widely accepted in any store. These credit cards are very popular in the United States, a subprime card can help you get out of a financial squeeze. If you have average or poor credit history a Capital One credit card is also an option.
Secured Credit Cards: A secured credit card requires that you offer some security in exchange for a credit limit, which makes it easier to obtain a credit card in cases of poor credit history. For example, a few hundred dollars in a deposit account may be required to get a secured credit card and the amount of deposit works as the initial credit limit of the applicant. A card holder can upgrade a secured credit card such as the BankAmericard Secured Credit Card to a standard credit card if they use this card responsibly.
Credit Card Advantages and Disadvantages:
Use a credit card intelligently and you could get a lot back in cashback and rewards, but if you do not use it with discipline you will be stung by very high interest charges. So, what are the best criteria for applying for a card such as the Capital One credit card?
Advantages:
- A card from Wells Fargo or another provider saves you time by avoiding running out of cash and suddenly needing to find an ATM. You do not need to keep cash in your wallet.
- You can track your monthly expenses more easily, for example a Barclaycard statement will show you full details of all your transactions.
- Most credit card companies handle disputes with defective products on your behalf.
- There are many companies offering low introductory interest rates, including some of the Capital One credit cards.
- These cards allow you to earn rewards when you spend on purchases like groceries and petrol.
- Sometimes you can get a period of 0% interest on your purchases, Citi Bank offers a number of cards with this promotion.
- Most cards including the Capital One credit card work in any currency, and can be used on international websites and when you travel abroad.
- Many companies offer incentive programs based on the amount of money you spend on your card.
Disadvantages:
- It is easy to spend more than what you can afford when you have a credit card.
- Cash advances from a credit card such as an AMEX carry high interest rates.
- Low introductory rates are for a limited time, although these can be very attractive.
- Credit card fraud is common, but you can be compensated for illegal transactions on any card whether it is a Visa, a Mastercard or an AMEX card.
- You will get debit cards without annual fees but many credit cards charge an annual fee in return for rewards and benefits.
Credit card networks
A credit card is issued by a bank or credit card company which is responsible for honouring payments and for collecting any outstanding money from its clients. There are a lot of banks and credit card companies. Every card such as a Capital One credit card is issued on a specific credit card network which is the system that facilitates transactions when you buy goods or services. There are only six major credit card networks. These are the most common networks in the United States:
Visa
Visa is widely accepted throughout the world and Visa personal credit cards offer a wide range of benefits for its card holders. Visa cards are great for traditional benefits and also offer premium rewards via the Visa Infinite card brand. Most Visa cards support contactless payments which makes checking out with your shopping quick and easy. You can’t apply for a Visa card directly at Visa, you have to get a Visa card from a bank or credit card company that issues Visa cards, such as the Capital One credit card range.
Mastercard
Mastercard is the second most popular credit card in the United States. Like Visa cards, a Mastercard is widely accepted everywhere in the world. As with Visa a Mastercard often offers chip and pin technology to give added security and you can easily check out with a contactless Mastercard. This card network offers transactions in over 200 countries and in more than 150 currencies. Again, you can’t apply for a Mastercard directly with the card network, you have to apply at a Mastercard issuer such as Citi Bank.
American Express
American Express differs from Visa and Mastercard in two important ways: AMEX, as it is also known, issues its own cards on its own network – you can apply for an American Express card by directly contacting American Express. AMEX also works with other providers, so you could get an American Express card from a bank but not all banks issue AMEX cards, so you won’t get a Capital One credit card on the AMEX network, for example. Secondly, AMEX is not as widely accepted around the world, although acceptance in the United States is very good. AMEX may sound unattractive for these reasons, but on the flip side an American Express card often comes with very good benefits.
Discover
Like American Express, Discover is both a credit card network and a credit card provider. Most Discover cards are issued to applicants directly by Discover, so you won’t find a Capital One credit card on the Discover network, but some banks may offer a Discover card. Discover cards are not as widely accepted, so you may find a lot of merchants are unable to accept your Discover card for payment. However, Discover cards offer a lot of benefits.
Credit card issuers
Each of the following credit card issuers will issue their credit cards on a credit card network. Whether a full-service bank, or a focused credit card company your credit card issuer will pick from the Visa, Mastercard or American Express card networks when they decide who to partner with when issuing a credit card. Here are some of the largest credit card issuers in the USA.
American Express
Both a credit card network and a credit card provider, AMEX is active in over 120 different countries of the world. It is the largest issuer of credit cards with respect to transactions, its customers cover an average of 6 billion transactions per year. Below are some examples of American Express credit cards.
- American Express Platinum Card®
- Premier Rewards Gold Card from American Express
- Gold Delta SkyMiles® Credit Card
Bank of America
Bank of America which was founded in 1904 started as “Bank of Italy”. It was renamed in 1930 and started providing the first general use credit card. The award-winning online and mobile banking services from this bank makes credit card handling much easier. Find some of the credit cards of Bank of America below.
- BankAmericard Cash Rewards™ Credit Card
- BankAmericard Travel Rewards® Credit Card
- BankAmericard® Credit Card
Barclaycard
Barclaycard was established in the United States in 2004 by a century’s old British bank and is known for its co-branded credit cards which partners with well-known travel, entertainment, educational, retail and financial institutions. Barclaycard is a reliable option for responsible borrowers in good standing. Here are some types of Barclaycard credit card which are popular among its customers.
- Barclaycard Rewards MasterCard®
- Barclaycard Arrival Plus World Elite MasterCard®
- Barclaycard Arrival™ World MasterCard®
Capital One credit card
Capital One credit cards are issued to applicants even if their credit history is average or poor. A Capital One credit card provides 24/7 customer service and a free credit score which you can check before you apply. Capital One credit cards fulfil the needs of every cardholder. A Capital One credit card also provides premium benefits and perks for everyone. Find some Capital One credit card examples below.
- Capital One® Spark® Cash for Business
- Capital One® Venture® Rewards Credit Card
- Capital One® VentureOne® Rewards Credit Card
Citi
Since 1812 Citibank has been a leading banking institution for customers who have an average credit standing. This credit card provides two primary rewards programs: Simplicity and Thank You. Cardholders at Citibank can manage multiple accounts with its CityManager Online Tool. Below are three types of Citi Credit cards which are popular amongst its customers.
- Citi® Double Cash Card
- Citi Simplicity® Card
- Citi ThankYou® Preferred Card
Discover
Discover credit cards offer a lot of cash back and promotional perks when you travel. The card has good fraud protection facilities that let customers spend safely. It is easy to apply for this card and the card provides good offers for students and businesses. Find some examples of Discover credit cards below.
- Discover it® – Cashback Match™
- Discover it® – 18 Month Balance Transfer Offer
- Discover it® Miles
Wells Fargo
Wells Fargo credit card provides financial assistance. Many American households trust this brand that is well-known for its six-horse stagecoach to safely deal with their personal finances. Wells Fargo has been a wealth of opportunity for Americans. Find three types of Wells Fargo credit cards below.
- Wells Fargo Cash Wise Visa® Card
- Wells Fargo Propel American Express® Card
- Wells Fargo Platinum Visa® Card