Credit Card is a card that allows a person to make purchases up to the limit set by the card issuer. One must then pay off the balance in installments with interest payments.The longer card holder wait to pay off his or her entire amount, the more interest pile up. Credit card is very convenient compared to carrying cash or checks every time you need to purchase something.

It is also important to be familiar with the different types of credit cards.There are two interest rate options for credit card —the fixed and variable. Fixed-rate carry higher interest rates. Credit card grantors issue three types of accounts with basic account agreements:

“revolving agreement” a.k.a. Typical Credit Card Account which allows the payer to pay in full monthly or prefer to have partial payments based on outstanding balance.

• Charge Agreement, requires the payer to pay the full balance monthly so they won’t have to pay the interest charges.
• The Installment Agreement, on the other hand, asks the payer to sign a contract to repay a fixed amount of credit in equal payments in definite period of time.

The most popular credit cards include Chase Manhattan Bank, Citibank, Bank of America, BankOne, American Express, Discover® Card, First Premier Bank, Advanta, HSBC Bank, and MasterCard Credit Cards. There are three main types of credit cards that are common in America. They are travel and entertainment cards such as American Express or Diners Card. These have to be paid in full at the end of the month and are liberal on spending limits. The second major cards are the bank cards such as Master Cards, Visa, GM, and Ford cards sponsored mainly by the banks. The bank defines spending limits, and each offers different terms and conditions. Banks offer a choice of payment methods, either pay the balance in full with no interest or pay a minimum part or some part of the balance with a finance charge. The other major type of card is the retail store cards such as Sears, J.C. Penney, Shell or Mobil.

If you decided to apply for a credit card, there are a couple of things you should do:

• Surf the net and do some research on credit cards. By doing this, you can familiarize yourself with different credit card terms and types. Being a form of borrowing that involves charges, credit cards usually have underlying credit terms and conditions affect your overall cost. Some of the important terms to be understood well include the annual percentage rate or the APR.
  Aside from APR, you should understand outstanding balance, finance charge for each billing period, free period or “grace period,” annual fees, transaction fees and other charges, other costs and feature, and balance computation method for the finance charge like average daily balance, adjusted balance, previous balance, and two-cycle balances.
• Compare numerous credit cards that would best serve your needs
• Apply for the credit card of your choice by filling out a credit card application by visiting a bank representative or through online.