Business Management Blog

The use of credit card originated in the US during 1920s when individual companies began issuing them to their customers for purchases at company stores in different places. This use increased significantly after WW II when veterans returned and looked for the chance to travel for business and pleasure.

Diners Club, Inc. has introduced the first general purpose credit card in 1950 that could be used at a variety of stores and business. They charged cardholders an annual fee and billed them for their charges periodically. Another major card was established in 1958 by the American Express company.

Later came the bank credit card system which was introduced by the Bank of America in California. The bank credits the account of the merchant as sales slips are received and assembles charges to be billed to the cardholder at the end of billing period, including interest and charges. The system was licensed in other states starting in 1966 and was renamed Visa in 1976. MasterCard has introduced their own bank cards a few years later.

Nowadays, when we think about credit card, there are actually three different kinds of cards
available: a card offered by a bank, a travel and entertainment card, and a ‘house card’ which can be used only at a specific chain of stores like department stores, oil and gasoline companies, and telephone companies.

If you’ve got reasonably good credit, odds are you receive credit card offers in the mail all the time. But how to find the best one?

As a smart consumer, you need to shop around and weigh the pros and cons of each credit card you consider. Although the government regulates the interest rates and other financial aspects of credit cards, the marketplace is incredibly diverse. First, you may consider the basic terms of use for every credit card like interest rate/APR, minimum payment required, grace period on your credit card bills, finance charges, annual fee, cash advance fees, late-payment charges, over-limit fees.

You may also interested in features offered by the company instead of interest rate. However, if you pay your bill in full every month, the interest rate is not going to be as important as other card features, like frequent-flier miles or no annual fee. But if there’s even a remote chance that you might run a balance, you’ll want to focus on finding a card with a low APR.

Be very careful as some credit card companies offer a low introductory APR to attract new customers and get them to transfer balances, but the low rate is only good for a short time.

Last but not least, don’t forget to know, from the start, that almost all issuers—including
big, legitimate ones—hide fees and high interest rates in the small print of their disclosure forms and agreements. Take the time to read these.