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Mostcards today offer personal accident insurance cover as a value-added serviceonce you subscribe. Of course the value and scope of the insurance is differentfor each card. A few cards (in India) offerup to Rs 10 lakh of insurance, and what’s more they cover your spouse too.So before going infor your card, you’d do well to check out what each
card company is offering interms of insurance. Remember too that the card company is offering the insurancein a tie up with an insurance company. That means the responsibility ofhonouring the commitment made is not with the card company but with theinsurance firm. So check whether the card company has tied up with a reputedinsurance firm.

It’snot only accident insurance that’s on offer. Some credit card firms also providemedical and household insurance too.

ADVANTAGES OF A CREDIT CARD

Tosum it in a line, a credit card provides you with convenience, safety, morepurchasing power and a host of fringe benefits. What’s more, credit cards todayhave assumed different avatars. You have Add-on cards (for a family member), ATMcards (to withdraw instant money), co-branded cards, petrol cards (Citibank+IndianOil, for instance in India) debit cards, smart cards ---- the innovations areendless. You get more too. Most cards offer privileges like free insurance,discount coupons and invitations to exclusive events. Yes, for many the creditcard is become a vital necessity. If you haven’t got one yet, go for it by allmeans. But read more in this section on how not to misuse your credit card andget into financial trouble.

ORIGINS OF THE CREDIT CARD

The origin of the credit card can be traced back to 1914, when American company Western Union began issuing metal plates to customers who would buy on credit. The transactions would be recorded on these plates.

However, the credit card as we know it took another 40-odd years to evolve. An American gentleman, Frank McNamara was acutely embarrassed in a New York restaurant, when he realised that he had forgotten to carry his wallet. When he finally got out of the restaurant --- after plenty of apologising --- McNamara was suddenly struck by the idea of replacing cash with a more convenient alternative. And that’s how “The Diners Club” card was born. So now you know who to thank --- or blame!

The Need For Credit

All credit card users must be familiar with the jargon associated with a credit card like limit, debt, secure, and unsecure. For people to whom a credit card is a new way of life, let us find out the basics of a credit card.

It is always a good idea to do a proper study before one goes in for a new credit card. With the kind of offers and promotions offered by the banks of today, it has certainly become a task for one to choose the card that would suit him just right.

An unsecured credit card refuses to a free and clear credit card that does not require a deposit and is definitely not a prepaid card. An unsecure credit card also implies that one has a fine credit statement, as one need not pay in advance for the use of such card. Though the credit limit offered initially would be lower, it would gradually increase as per the use of one's card.

A difficulty in securing an unsecure credit card is past credit fiascos. One can recover his credit by making regular payments and purchases on a secured card.

A credit card application is the way with which one can have plastic money in hand. By providing one's credit history, work history, and banking information, one allows the givers to dig into his credit record. Once an approval is made and the credit limit is set, the card is all ready to be swiped.

As we wind up this article, let us also keep in mind that using a card has a tagline called responsibility. Credit cards have caused people to overspend; yet with proper management, it could turn out to be your best money lender.

GET THE BEST DEAL FROM YOUR CREDIT CARD

“Charge it!” has become like a fashion statement and it is commonly heard in various service establishments like malls, multiplexes and hyper markets. People buying food or shopping for clothes using their credit cards has now become a trend. A credit card is supposed to be used for necessities and not as a luxury.

• Before marching down to a credit card agent, ask yourself some questions like do you want to pay for the credit every month or carry a balance instead? The type of credit limit should also be taken into consideration. Some credit cards offer a lot of benefit packages, think of the package that would suit your needs.
• If you want to carry on a balance, look for the credit card that offers the best interest rate or the annual fee offer. However, if you prefer to pay for the credit every month, then look on the one that offers the lowest interest rate.
• Credit limit determines how far you can go with your card. Think of the lowest limit that would fit your needs, not your lifestyle.
• Credit card companies offer tremendous bonuses on their cards. Before you sign up for these packages, think wisely! Will they really benefit you or are they just there to make your credit life miserable?
• Always choose the credit card that offers the lowest annual percentage rate (APR). APR's could either be a ‘fixed’ or a ‘variable’ rate. This is to be taken into consideration if you're deciding on carrying a balance.
• Some credit cards offer a grace period of 25 days before they charge the interest on the purchase. But some of them may not. Look for those that have one. The longer the grace period, the better the deal.
• You also have to check on other fees attached to the credit card. These are the penalty rates as well as other charges like over the limit charges and late payment charges.

When choosing a card, always remember to get the one that would best fit your needs and at the same time the best deal you could get out of it on a long term basis. You are only to get one so don't rush into one that looks good. You always have the liberty of comparing one credit card to another.