Should you get Visa or MasterCard? Is one of them better than the other? Will one of them help your credit rating more than the other? Many people ask themselves these types of questions when they think about getting their first credit card or additional ones. The fact is, few differences exist between the two credit card brands today, but you can benefit by having a better understanding of the two companies and using their competition to your advantage.

Just Who Are Visa and MasterCard

First, you should know that neither Visa nor MasterCard actually issue credit cards themselves. Neither company deals with consumers or merchants directly. Instead, they create and run the worldwide computer networks that process the billions of transactions that occur each day from people who use their credit cards at millions of merchants and ATMs. Both companies make their money from financial institutions to whom they license the ability to market the MasterCard or Visa system to consumers and merchants.

MasterCard and Visa have been fierce competitors for years, each vying to be faster and more global than the other, just like Hertz and Avis, and McDonalds and Burger King. Each time one brand creates a new twist on their credit cards, the other soon follows to match it. Both companies now offer nearly identical benefits, such as travel insurance, car rental insurance, product warranty extensions, and so on.

Furthermore, both cards are accepted worldwide by nearly the same number of merchants. MasterCard says its cards can be used at more than 23 million locations around the globe, including 1 million ATMs and other locations where cash can be obtained. Visa says its cards are accepted at more than twenty million locations in more than 150 countries.

In general, most merchants throughout the world accept both cards, or if a merchant takes only one of the brands, another merchant down the block takes the other. The point is, your chances of being locked out of eating or buying a gift or getting a hotel room because you have only one brand of credit card are usually minimal — other than at a few noted events where one card or the other may have negotiated to be the sole credit card to be accepted. But such instances are far and few between.

Which Card is Right for You?

Given the above, is one card better or more right for you? The best answer depends on whether it’s your first, second, or additional card, as follows:

If You’re Applying for Your FIRST Credit Card

In this situation, you can make a choice based simply on selecting which issuing bank you prefer to work with, or which promotional offer you like the most, without regard to the brand on the card. Perhaps you like Chase or Citibank or HSBC, or perhaps you like the 0% APR with no-annual-fee offer you found online. It’s six of one, a half-dozen of the other.

If You’re Applying for Your SECOND Card

In this situation, it is strategically smart to select the opposite brand card from your first card AND to choose a different issuing bank. The rationale for this is that when you have two different cards, you will find that the two banks will compete for your business (assuming you maintain good credit). You will get offers for 0% balance transfers, higher credit limits, and other perks as the two banks vie for your increased use of their card. And just in case you find a merchant who only takes one brand of card, you can now be assured of having all your bases covered.

If You’re Applying for ADDITIONAL Credit Cards

Many people apply for more than two credit cards because something specific motivates them to get a third or a fourth card. You may want a separate card to use for your business charges, or to compliment your airline frequent flyer program. In these cases, your selection is largely predetermined by whichever card has attracted your attention to fulfill your specific needs. You might even shop around among issuing banks to be sure you find the best offer, no matter which credit card brand stands behind it.

In short, choosing between Visa and MasterCard is no longer a frustrating question for anyone applying for a first credit card. You can’t go wrong with either brand. And if you already have a first credit card, it can be a very smart move to apply to get a second card from the other brand. If you treat your credit well, you’ll soon be having two (or more) banks begging for your business — and that’s a good thing!

For many, credit card and other personal debt is a fact of life. It’s not surprising: Advertisers constantly bombard consumers with buy-it-now messages. According to a survey by the consumer analyst firm, Mintel, the average debt in the UK for each man, woman and child is now £11,830. According to the Bank of England, at the end of January 2007, British borrowers owed £55 billion to credit-card issuers. If the weight of credit card debt is too heavy in your life, there are five steps to making yourself debt free. Follow this simple guide and you can begin to take charge of your financial future.

Step 1: Stop adding to the problem. If you are deeply in debt and continue spending more than you earn on your credit cards, things will only get worse. Stop using your credit cards to borrow from tomorrow what you want today.

Step 2: Write a budget. This can be a difficult exercise for those of who have used credit cards to bridge the gap between income and expenses. But tracking spending can spotlight wasteful spending that can be curtailed painlessly. Fixed expenses such as mortgage or rent, utilities, food and insurance take up the majority of most household budgets. Experts say it’s important to try to allow yourself some mad money to play with every month. The difference is that instead of giving yourself carte blanche with your credit card, set aside a fixed amount of cash for luxuries.

Step 3: Use cash rather than credit. There’s a reason that casinos give you chips to spend instead of cash: People don’t attach the same value to noncash substitutes and will spend and bet more freely. It’s the same with credit cards: Like poker chips, they have an air of unreality. So, next time you buy pair of new shoes or the latest CD, hand over the cash and feel the burn instead of swiping a credit card. It makes you think twice about impulse purchases.

Step 4: Get a better interest rate. If you have thousands in personal debt it can really improve your monthly cash flow if you transfer those balances onto a low or 0 percent interest credit card. Your credit rating will generally determine whether you’re eligible for the lowest rate offers.

Step 5: Apply extra cash to your debts. Living within your income, establishing a budget and paying cash, along with better interest rates on your credit card debt should save you hundreds each month. If your belt-tightening has freed up cash, apply it toward your credit card debt. For more information on credit cards and related topics, please see our credit card news archive.

It’s the Catch 22 of credit: It takes good credit to get new credit. This is especially true for low-cost credit cards. But how does one get good credit when a credit history is required to even get a credit card? It’s true that most major credit card companies try to limit their financial risk by mostly approving those with excellent or good credit. But there are credit card options for those who have not established a credit history.

The risk equation
Often, the lack of credit history is equated with bad credit, but if you fit this category, do not despair. It’s all a matter of how you look financially to banks and major card issuers. After all, credit card issuers are profit-making organisations that must lend money and then get that money back, plus interest, to stay in business. Someone with no history of faithfully repaying money that has been borrowed is an unknown quantity and is, therefore, either avoided or assigned a higher degree of risk, and charged a higher interest rate to offset that risk.

First-time credit cards
Students are often in this category due to their age and lack of income. However, major credit card issuers have figured out that most university students actually present an acceptable risk profile. They are upwardly mobile, have many years of bill-paying ahead of them and may be able to tap parental resources if they get in trouble. To the issuers, they generally warrant being issued credit cards. But if you are not a student, what are the options? As in most areas of commerce, there are various types of credit card companies that specialize in different segments of the market. Some offer cards to those without a credit history. Since the banks are taking on more risk and experience higher losses with this customer segment, applicants can expect to pay application, usage and annual fees for many of these products. However, it can be worth the costs involved to begin establishing a solid credit history. Once you have a strong track record you can have your pick of cards.

More choices
Other options for those new to the world of credit can include store cards from common high street shops. Retailers will often take a chance on new credit applicants where the major credit card issuers would not. Again, a successful history of repayment opens the door to standard credit cards, such as those bearing the Visa, MasterCard or American Express logos. So don’t despair if you are just starting out and don’t have a credit history. It can be like trying to get your first job without any work experience. But just as in the world of work, once you get your foot in the door and pay your dues, you can expect to advance to bigger and better things. For more information on credit cards and related topics, please see our credit card news archive.

Looking for a credit card? Before applying, decide what type of card will work best for you. There are a number of common types of credit cards available through banks or other financial institutions. They include:

Standard credit cards
Standard cards are the most typical unsecured credit cards and are readily available from most banks and financial groups. Where they vary is in how the annual percentage rate (APR) is offered or calculated.

Balance transfer credit cards
These are designed to allow consumers to transfer a balance from a higher-interest credit card or cards onto one with a lower interest rate. For example, if you transfer a balance to a credit card with a 0 percent introductory rate percent , you will pay no interest as long as the introductory period lasts. percent Terms of balance transfer credit cards vary, so be sure to understand the offer.

Low-interest credit cards
These offer either a low introductory rate that rises after a certain period, or a low fixed rate. For example, you may get a card with an introductory rate of 5 percent for the first six months and 10 percent thereafter. For the first six months, any purchases you make balance you transfer will be charged a 5 percent rate. However, any balance that you carry past the six-month period, or any new purchases outside that period, will then be subject to a 10 percent rate percent. Many people take advantage of introductory rates to lower the cost of borrowing on expensive items. Be sure to read all the terms and conditions of the introductory rate to avoid being penalised by fees or accumulated interest.

Credit cards with rewards programmes
These usually reward cardholders with incentives, rebates and even cash back for purchases made on their cards. Users can get additional airline miles, cash-back rewards or discounts on merchandise for each pound spent. Rewards cards usually require a better-than-average credit rating.

Travel/airline credit cards
Airline mile or frequent-flyer cards give users airline (or frequent flyer) miles credits whenever the card is used. Once enough points are accumulated, users swap them for airline travel. All travel programmes are different; read the card’s terms and conditions to find out how many miles you gain for what you spend. A key consideration is how many miles are needed for a free plane ticket. In addition, find out how soon the miles expire. Because airline mile reward programmes can be costly for credit card companies, many come with an annual fee.

Who should use travel/airline credit cards
These cards are great for people who travel frequently or for those who want to use their cards to plan vacations, but the associated fee might make them too costly for other types of cardholders.

Cash-back credit cards
These give cash rewards for making purchases. More use means higher rewards. Most cash-back rates are around 1 percent of the purchase amount. Some cards offer a higher cash-back percentage with increased usage; others offer more cash back at selected retailers or for specific purchases. Since cash-back programmes are costly to credit card companies, some cash-back credit cards also have annual fees.

Who should use cash-back credit cards
This type of card is particularly good for people who are faithful about paying off their balances each month. Used appropriately, cash-back credit cards can earn cardholders a significant amount of money over time.

Reward credit cards
These cards are similar to cash-back cards in that users can accumulate points toward rewards, based on how much the card is used. Reward programmes vary and offers often change, so look over the terms thoroughly before applying. Typical rewards include: • Petrol rebates • Entertainment rewards • Shop discounts for store cards Reward programmes are costly to credit card companies; therefore, many reward credit cards also require an annual fee.

Who should use reward credit cards
This type of card is particularly good for people who faithfully pay off their balances monthly. By minimising their charges, such individuals will reap greater benefits.

Credit cards for poor credit and credit repair
Poor judgment, credit mismanagement or a change in financial situation can flip credit from good to bad. Still, people with poor or rebuilding credit have several options.

Secured credit cards
With secured credit cards, a predetermined security deposit is needed. This deposit generally must be of equal or greater value to the amount of credit offered. Collateral can come in the form of cars, boats, jewellery, stocks or something else of value. Often, cards that help to rebuild credit come with low credit limits (£250 or so). Additional fees may apply. Be sure to read the terms and conditions. Down the road, if you use the card responsibly and pay all your bills on time you can ask for a credit increase. The extra fees and low credit lines will be worth it if a secured credit card helps you get your overall credit rating back on track.

Prepaid credit cards
A prepaid card is not a credit card but is used like one. The advantage of a prepaid card is that it avoids racking up debt because all purchases are paid for beforehand. With prepaid cards, the credit limit depends on how much money is transferred to the card. Most prepaid cards charge fees, including monthly fees, application fees, over-the-limit fees, cashpoint withdrawal fees and more. Be sure to thoroughly look over the terms before applying.

Specialist credit cards
These are for customers with special credit needs, such as business users and students. These sport features similar to traditional credit cards, including low introductory rates, cash-back rewards and airline rewards. However, business credit cards also may have additional benefits such as: • Business expenses kept separate from personal expenses • Special business rewards, savings or both • Expense reporting • Additional cards for employees • Higher credit limits

Student credit cards
Because students have little or no credit history, they often find it difficult to obtain traditional credit cards. Student credit cards are set up to help them build up their credit histories. Student credit cards often scale back rewards, features and other benefits, but they can still be valuable. Used wisely, this type of card lets a student take the first step toward a solid credit history.

It is an undeniable fact that credit cards play an important role in our society today.

For businessmen, business credit cards are a great help in separating their personal accounts from their business accounts. It is a convenient way to manage the company and the employee’s business expenditures. It also makes accounting and tax monitoring easier through updated periodical reports of all purchases made.

The stiff competition among banks has given birth to a variety of classes of business credit cards, which can only mean bigger and better choices for customers. Deals are becoming more and more attractive, and clients are given more options and freedom to get the best service they need.

The vast number of business credit cards to choose from can cause quite a confusion for a prospective customer especially if every one seems to be offering a great deal. With all the excitement, it could be tempting to sign-up to the first credit card offer that catches your attention, without even considering the others. It is recommended to evaluate each business credit card, examine each one according to its specialties and match it to the way your business uses credit and to the services your business uses. This way, you can pick out the best business credit card for you.

Things to consider when you are looking for a business credit card

For instance, if your type of business entails you to make large purchases, you will be most happy with a business credit card that offers cash backs on these items. Usually along with cash back programs; they also have point system rewards which entitles a customer to one point for every one dollar spent on the credit card. You can actually save a lot of money by buying more items which your business really needs.

If you are a frequent traveler, you can take advantage of free travel privileges as your reward. You may also avail of discounts from affiliated airlines, so it would be better if you choose the business credit card that has partnership with the airline you regularly fly with.

Aside from the benefits listed above, added perks may include shopping privileges from affiliate merchants, or discounts from servicing outlets like shipping, printing, mail deliveries, gas stations, etc. which are often the services that businesses commonly use. Taking all these rewards and benefits in consideration can earn your business a great deal of money.

The development of technology has brought a new meaning to the word business. The introduction of credit cards has certainly shifted marketing to new heights. If you own a credit card you may well agree that it makes a whole lot of difference especially when it comes down to convenience.

Businesses today can greatly benefit with the emergence of business credit cards. Aside from the features of a personal credit card, business credit cards enable an entrepreneur to separate his personal spending from his business expenditures. Business credit cards allow for easier financial monitoring by providing quarterly and annual reports of your business account. Having your own business credit card give you the opportunity to establish a good credit history, which can remarkably benefit you in expanding your business.

And we must not forget that for those planning to start up their own small business, who do not have enough cash in hand, a business credit card may come in handy to use as working capital or to purchase equipments to begin operations. That 30-day grace period can stretch your budget to the maximum and allow you to actually acquire good-paying customers and receive your first earnings before your grace period ends. Furthermore, business credit cards are enhanced by rewards and cash back programs which are especially intended for business owners.

There are a large assortment of business credit cards available on the market . As a customer finding the best business credit card for you will require your better judgment and perception. To help you narrow down your choices, here are a few points to focus on:

* How attractive really is the promotion? Most business credit cards entice their customers through 0% introductory rates on APR (annual percentage rate). If so, for how long will this introductory savings be? Watch out for the catch. Don’t grab what seems like a golden opportunity right away. Check for the annual fee, penalty fees, and make that the APR remains low once the introductory offer expires.

* Reap your rewards. Usually business credit cards offer greater rewards and promotions than personal credit cards. Make the most out of it. You would want to choose a business credit card with rewards and bonuses that matches your kind of business. Are you in buy in sell business? Merchandise? There are credit cards who award points per dollar spent on your credit card. Most business credit cards also have cash back plans which entitle you to rebates on your purchases. If you purchase tons of items for your business all the time, then this type of credit card will be good for you. If you travel a lot, credit cards that offer free travels and mileage points will certainly be a nice perk. What about other discounts? Are your frequent customer of their affiliate stores? If yes, that would be an extra plus you can enjoy. Also, remember to look for a business credit card that doesn’t allot expiration on your accumulated reward points.

* Grace period. It is important to choose a business credit card which gives you ample grace period or else you would be charged interest on your balances the moment you make your purchase.

* Convenience. As a business owner, you do not extra time to waste on falling in line or going out your way to the bank to pay your bills. An online access to your account, 24/7 should be automatically provided for you. Make sure they have options that are compatible to the financial software program that you use for easier download of your financial statements.

After carefully considering the above points, you should now be well informed and ready to make that decision. Remember, don’t pick in a rush. Take the time to read the terms and conditions of each card that captures your attention before making that final choice.

Do you own a business? Or still in the planning stage to start-up your own? Then a business credit card may just be the thing for you. A business credit card is the modified version of your personal credit card and a lot more.

The Benefits Of Business Credit Cards

First of all, it separates your personal money from your business funds. It gives you the option to distribute business credit cards to your employees to keep track and control spending on all your business purchases. It also provides you with an annual report, detailing all purchases that are made on your account. This is a great help when reviewing your accounting and tax payments. More importantly, a business credit card can be used to temporarily fund a business and get it started without waiting for a bulk of cash to come in hand.

The Types Of Business Credit Cards

The business credit cards give rewards to their customers which surely benefits small business owners and entrepreneurs. Rewards come in the form of cash rebates, discounts on purchases and free travels in and out of the country. Because businesses use their credit cards for big purchases, they gain more points easily which entitle them to great rewards and bonuses. Most business credit cards offer big discounts for the whole promotional period to attract more customers. Most credit cards allow a very low charge on the APR which can last from 3 months to a year, to even more than one year period. The rate varies starting at a 0% interest rate. If you can get credit with a 0% APR, then you can actually get a very big purchase without having to pay for it in cash instantly.

Making the most of the Introductory Rate

Some best business credit cards will also give you a very low interest rate on purchases during this period. This is a good time to make all those expensive purchases your business needs. Another great deal with many business credit cards is the 0% balance transfer rates for a certain time period. Combine that with a low APR, and it is an ideal way of paying off debts more quickly, by transferring your credit from another account to this credit card. Thus, you get rid of excess charges on interest and you can focus on paying off just your original debt. Always keep in mind the date that your introductory rate ends, and budget accordingly. You would want to watch out for any hidden traps though.

Some credit card companies would ask for higher fees on other charges such as higher annual fees, higher balance transfer fees, high penalty fees, etc. Also, check if the APR will still be a reasonable amount once the introductory period is done. In case you are getting the card solely for its low initial offer, then you should even be more careful. Remember, in order to keep that rate low for the whole introductory period, you need to prove that you are being a good payer or else this privilege could be taken away and you could find yourself stuck with a much higher rate. There are others who use the strategy of switching cards in order to pay of their debts more quickly minus the interest fees. The only thing you would need to be cautious about is being able to pay your bills promptly. However switching accounts too often may reflect poorly on your credit report, if you are opening brand new lines of credit each time. Once your rate ends, call the credit card company and see if they have another low interest rate available. In my experience they will either give it to you right away, or if not, just mention you will simply transfer the balance to another card. Many times they will find you a new rate for you. So, if you have already found a card with a low rate even after the introductory period, it is a good choice to stick with it. It saves you from more hassle so you can concentrate on paying your bills and maintaining a good credit record.

Certainly business credit cards are a convenient way to handle your business resources. A vital point to bear in mind always is that managing your finances requires self-discipline and a proper view of money. Using your business credit card to its full potential is up to you. Take advantage of all your privileges but never abuse them.

To tell the truth, I am so fed up with these sickening two words “credit crisis”. I turn on TV and hear these words. I step outside and passing-by people feel it their imperative duty to pronounce these crunching cr… cr… I get into a cab and the driver would talk to me about the economy slowdown all the way…

I believe all of us are sick and tired of this hype about the financial recession in the country. We know that our economy is strong enough to get through it. We survived Great Depression, after all. I hope you will forgive me if I write about something else but the financial downturn. Let’s make a few next passages a getaway from the problems of the material, or financial world, to be more exact.

You know, my shrink advised me a good relaxation technique. It’s a good way to forget about problems and it works fantastic when my wife and I are having a fight for some stupid reason. I just imagine myself packing my bags, jumping into a cab and going to JFK. I get on a plane and fly far away to some exotic island with nice warm white sand, beautiful trees, and amazing ocean. You know, if your make believe that you are in that place is pretty realistic, you will feel a relief. It’s like looking at any negative situation from the outside.

If an imaginary trip can make you feel better, just think what a real travel could do to you.

Though not so many people can afford going on a trip somewhere these days, if you do, I would advise you to. A change of environment is just a panacea from stresses we get living in our crazy hectic world. Just pack your suit-case, grab your girlfriend, boyfriend, husband, wife, kids, friends, whoever, your airmiles rewards card and catch a cab to airport.

Why I mentioned an air miles card? It’s simple. First of all, it helps you earn money (in the form of air miles) during your trip, as well as save them (through redeeming previously earned miles). Why would you want to take it with you? The thing is that such credit cards come with numerous small pleasant bonuses, like concierge service, nice gifts and freebies. These little perks make you smile and feel better.

You can choose any of such spirit-lifters to take with you on a trip. It can be a frequent flyer card, a hotel rewards card, a cash back card or any points reward card you choose.

So, have a great time on your getaway and let the financial crisis’ phantom not chase you even in your thoughts.

You must know about the five-star crash test rating system used in the automobile industry. Since it was implemented, the quality of new cars was considerably improved and the number of road accidents has slowed down. The idea of creating a similar system in respect of credit cards has long been stirring around but until today it has not been included into any of the reforms.

The 2008 February conference held at the Center for American Progress Action Fund showed Sen. Ron Wyden’s and Barack Obama’s determination to introduce the five-star concept for credit cards to make it easier for people to understand the basic lending policies and features. This would help them make wiser financial decisions and plan their card management in a more thoughtful and responsible manner.

Now, as US president, Barack Obama is to address the predatory credit practices by establishing the five-star rating system along with the Credit Card Bill of Rights. The five-star rating system requires a bank or card company to give a certain plastic stars from one to five based on its fairness and safety, which follows from application and contract information. This would allow potential applicants to quickly estimate whether the credit card is a worthy one without spending a day reading and trying to get the complicated fine print. Knowing the risk involved with the deal, a customer makes a rational application decision.

Back to February, 2008, the credit card industry criticized the five-star rating system on the ground that different credit consumers see and judge credit cards differently. It depends on lots of factors and on what’s most important for them. Some would place rewards before the interest rates and others, contrariwise, would choose in favor or lowest APRs due to their habit of carrying balances. As a result, one person’s five-star card might receive a one star rating with another person.

Also, for those with fair credit rating or poor credit management any card would be unsafe, so it is pointless to rate it anyway. The industry insisted that different consumer preferences and spending habits would make the system inapplicable to just all cardholders. One of their arguments against the introduction of the rating conception was the universal default clause which affects only portion of customers. To this, Wyden responded it was an issue concerning basic concepts of fairness and safety and was subject to debate at the Congress. On the whole the policy of universal default is seen by Wyden is unfair and far from basic commercial principles.

A credit card can be a valuable piece of plastic to own. To get the most out of yours, though, you’ll want to be aware of the terms and conditions that come with it. Before you apply for a new card, make sure you have a solid understanding of what you’re signing up for. Here are five common terms to watch for on credit card applications.

Annual Percentage Rate

Often appearing on the credit card application as APR, the annual percentage rate refers to the cost of credit. In other words, the APR represents the interest you will need to pay on any outstanding balances you have on the credit card. It is expressed as a yearly rate. Some credit cards advertise a low interest rate. Others, especially those that offer reward programs, may charge a higher APR. Consider your priorities and whether or not you will carry a balance as you look at the APR.

Balance Transfer

If a credit card application offers the option of a balance transfer, it means that you can bring over an existing balance from a different card. Why would you want to do this? You may be carrying a balance on a card that has a high APR. By switching the balance to a card with a low APR, you could save a good deal of money in interest. Credit cards that offer a balance transfer usually include a certain time period during which no interest will be charged to the balance. Check to see how long the offer lasts, and pay off the balance during the allotted time. You’ll save a bundle in interest fees.

Grace Period

The grace period, or free period, is the number of days that you are given to pay off a balance without getting charged interest. Grace periods usually run between 20 and 30 days. If you make a purchase, and then pay it off during the grace period, you will not owe any finance charges. If your card does not have a grace period, finance charges will start to accrue as soon as you make the purchase.

Introductory Offers

Most credit cards include additional bonuses for signing up. These often consist of an initial time period during which you will not be charged interest. The offer usually lasts between six and twelve months, and can be used toward purchases or balance transfers. Check to see what the offer applies to, and what the regular interest rate will be. Eventually, you will have to pay the normal interest rate on the card.

Variable vs. Fixed Rate

Many credit cards come with a variable interest rate. This is usually attached to the prime rate, which is what banks use to lend to their best customers. As the prime rate shifts, so does the interest on your credit card. A fixed rate, on the other hand, is one that will not shift. The credit card company still has the right, even with a fixed rate, to make adjustments, but they need to let you know before they do so.

All of these terms can help you pick out the right credit card for your situation. Take the time to read through the terms on the application. By doing so, you’ll have a full understanding of your credit card. Once the plastic arrives in the mail, you’ll be ready to start using it.