A credit card contains identification information such as a signature or picture, and authorizes the person named on it to charge purchases or services to his account. Charges for it will be billed periodically.

The use of credit cards originated in US during the 1920s. Hotel chains and oil companies began issuing them to customers for purchases made at their businesses. They became popular after Second World War.


As a credit card is an unsecured loan, banks ensure that only those meeting certain parameters are qualified to use credit card. Credit card will soon be an important source of identification.

It is important to learn the rules of the credit card, before you start the game.

Selecting your credit card Every one of us takes credit card to use it effectively and pay for it on time with no late payments. But most of us couldn't.

Many people will debate the best type of credit card, to use. More than the type, what matters most is using it effectively. Before selecting a card Know your needs if you use it more for travel related go for a card that offers travel benefits such as discounts on travel services. Evaluate cards that offer an interest rate you can accept and its benefits.


Before selecting a card

1. Read terms and conditions : Even while signing up for a free email account we are asked to read the terms and conditions. But we won't. Its ok ands its ok for signing up anything like your sim, your gym membership etc. For credit card it is different. YOU MUST READ IT.Or else you may feel cheated later.

Those people who come to sell cards are just contract employees, who work short term, they don't know much about it. So don't rely on them alone.

If you find anything in the terms and conditions of the credit card that is contrary to what was conveyed to you, then seek a clarification from the bank. If you are not satisfied, don't buy the card.

2. Annual fees and interest rates : Have a thorough understanding of annual fee, and interest charged by the card. Some time bank waves annual fees or membership fees for the first year. If they promised to waive off second year annual fee too, it is advised to check it before you use the card in second year. Negotiate a lower interest rate for your card.

3. Insurance benefits : Many credit cards offer insurance cover. Don't eat that bait .The criteria must be that if card has features that suit you, then you opt for it. On most occasions the insurance cover is usually linked with so many terms and conditions which make it very difficult to claim.

Most credit cards have similar features. The differentiating factor while choosing a credit card could be the reward point structure and zero or low interest balance/ transfer facilities.