It all began in the year 1951, when a New York based bank called Franklin National Bank started providing cards to a select few of their loan customers to enable them to make purchases using the cards as collateral. The bank had no idea that they had just begun a consumer revolution that would change the nature and scope of financial transactions across the globe.
The Growth of Credit Cards American Express quickly jumped onto the credit card bandwagon and even though it was essentially a company issuing only traveller’s cheques, in 1958, they began issuing credit cards too. This was a win-win for all stakeholders because:
credit card companies made handsome profits
users found the cards to be convenient to carry and they enjoyed the extra benefits and perks
retailers and shop keepers discovered that consumers spent more using their cards instead of cash
Barely a year later, in 1959, Bank of America launched the BankAmericard, the predecessor of the Visa credit card. In response to its phenomenal popularity, 4 banks based in California launched a rival credit card known as MasterCharge. In the mid 70s, BankAmericard was renamed Visa and barely 3 years later, MasterCharge became MasterCard.
The trio of Visa, MasterCard and American Express, or AmEx, have survived in the global marketplace since then. Many other cards were launched and died but these 3 have retained their hold with varying degrees of success in different geographic and economic strata.
Current Credit Cards Nowadays credit cards offer a lot more than the original cards did; you often have the option of getting rewards, cash back, 0% balance transfers, discounts, free air miles, and so much more. Cards also look much better than before because they are often available in a wider variety of colours, designs and shapes. On some cards, you can have a photo or creative design of your choice printed on them.
One of the major advancements of credit cards is that they enable you to shop online securely and safely. Online shopping now accounts for almost £9 billion which accounts for approximately 40 percent of annual credit card sales. Just last year, Britons spent almost £24 billion on their credit cards - there are almost 5 cards in circulation for every adult living in the UK. Futurists are already sounding the death knell of cash and it seems to be only a matter of time before that happens.
Banks, credit card companies, and other businesses love to charge you fees for violating their rules. Whether it's late fees, ATM fees, check stop-payment fees, overdraft fees, bounced-check fees, or any other fee, businesses are determined to get every dime out of you they possibly can. But there are ways you can avoid paying these fees. You just have to be shrewd. Here's how to avoid paying three of the most common fees.
(1) ATM Surcharges -- Any time you use an ATM that doesn't belong to your bank, you're going to pay for it. Sometimes the charge is only a dollar. But it can be as high as $4 or more, depending on the bank. And sometimes your own bank will charge you for using another bank's ATM. That makes for a really expensive withdrawal.
How to Avoid -- The best way to avoid these fees is to plan ahead and withdraw money from an ATM your bank owns. But you do have another option. Many grocery stores, drugstores, and discount stores (such as Wal-Mart) will allow you to get cash back from the register when you use a debit card to check out. The bank you use typically won't charge you for these transactions.
(2) Credit Card Overdraft Protection -- Many banks offer a credit card to protect you from overdrawing your checking account. But the protection comes with a price. While the fees are usually cheaper than overdraft charges, they're still expensive. Most of the cards will charge a fee each time the protection is used (up to $20 per transaction). And they count the transaction as a cash advance, which almost always carries a higher interest rate. To make matters worse, the transaction begins to draw interest the day it's made. There is no grace period.
How to Avoid -- The most obvious way to avoid this is to keep enough cash in your checking account to make sure you never overdraw the account. If that's too difficult, put some money in a savings account and set it up as your overdraft protection. Just make sure you put the money back as soon as you can. Otherwise, you'll deplete your savings.
A Word of Caution -- Many banks will charge you a hefty fee for overdrawing your account. And they'll charge the fee each time you do it. So if you use a check card or debit card to purchase small items, such as coffee or meals, each purchase that overdraws your account will rack up another $30+ charge to your account. Before you know it, you're charged $150 without even trying.
(3) Credit Card Late Payment Fee -- When you use a credit card, you have to make a payment by the due date. If you don't, the credit card company charges a huge fee (up to $39), and it damages your credit report. Even worse, credit card companies do everything they can to make you late for your payment. For instance, they have the due date on Sunday. But the company is closed on Saturday and Sunday. So the payment is actually due on Friday. If you plan to have your payment arrive on time, the mail won't arrive until Monday -- and you get slapped with a late fee. They also change their mailing address with no warning. If you make payment using auto-bill pay, you'll mail the check to the wrong address. And the company won't give you credit for the mistake.
How to Avoid -- If your bank offers a bill-pay feature, see if it also accepts electronic bills directly from your credit card company. If so, you can sign up for electronic billing and then set up your payments to be paid either immediately upon receipt of the bill or by the payment due date. Either option will allow you to avoid late charges. If electronic bill-pay is not an option for you, you'll need to make your payments early or get rid of your credit cards and use cash only. Actually, there's one other choice, but not many cards offer it. Some credit cards will let you sign up for the company to withdraw the full amount due on the due date from your checking account. I don't like the idea of giving them access to your checking account, but it's usually better than paying late-payment fees.
Both Matthew Lloyd & Steve Kroening are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Matthew Lloyd has sinced written about articles on various topics from Credit Cards, Check Credit Rating and Mastercard Credit Card. Matthew Lloyd writes for About Your Money. His articles provide users with useful advice on a variety of financial products, including. Matthew Lloyd's top article generates over 74000 views. to your Favourites.
Steve Kroening has sinced written about articles on various topics from Investments, Asthma and Health. Steve Kroening writes for Success magazine and also publishes Wisdom's Edge. You can get Biblical tips on health, finance, relationships, parenting, and success, delivered to your email inbox every week. Simply visit. Steve Kroening's top article generates over 27100 views. to your Favourites.