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| Know Your Plastic: A "Credit" Card Glossary |
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With all the different kinds of credit features and benefits out there, choosing the right
card for your needs can be time-consuming. Knowing and understanding the difference
between these cards can help you make the right decision and get the most out of the
card you choose.
- Affinity Card--A credit card that is associated with an organization, such
as a university or professional association. In some cases, when you make charges
on an affinity card, part of the service fee goes to the support of the associated
organization.
Benefits: You can support your favorite organizations just by using your card.
- Debit Card--Not a credit card at all, this card allows you automatic
access to funds in your bank or credit union account. A debit transaction
directly subtracts from the money you have. It is different from a credit
card in that it is not a loan or advance, but a deduction.
- On-line Debit Card--commonly
known as an ATM card. Transactions made with an on-line card are posted and
withdrawn from your bank account immediately or within the same day. Your PIN
number is required to authorize an on-line purchase.
- Off-line Debit Card--referred
to as a "check" card. Transactions made with an off-line card take one to three
days to be posted and for funds to be withdrawn. Your signature is required on
the printed receipt every time you perform an off-line debit transaction.
Benefits: Debit cards offer the convenience of plastic without a bill to pay at the end of the month or the possibility of interest charges.
- Rebate Card--A "give back" or "incentive" card. A rebate card offers bonuses, such as airline
mileage, cash rebates, or purchase rebates, to cardholders, often for the dollar
amount charged on the card.
Benefits: You can capitalize on rebate offers and earn some serious savings if you pay off your rebate card balance regularly.
- Secured Card--applicants
are required to deposit a collateral fund into an account before a secured card can
be issued. The fund will be accessed if the credit card account is seriously
defaulted.
Benefits: Obtaining a secured card is a good way to establish credit.
- Smart Card--The
latest in credit card technology, a smart card stores information on an integrated
microprocessor chip rather than on the magnetic strip of a regular credit card.
Although not yet widely available in the United States, these cards are thought by
many to be the card of the future.
Benefits: The information stored on a smart card is more secured due to the embedded chip technology.
- Supplementary Card--given
to an "authorized-user" for a credit card account. A supplementary card gives your
family members access to use your credit account. Despite their usage, you are
still solely responsible for the account.
Benefits: You can extend the convenience of credit to family members who need a credit card by giving them a supplementary card.
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