Consumers today are faced with many choices when it comes to using credit. For everyday purchases such as food, clothes and gasoline, the following types of credit are most commonly used:
Charge Cards
With charge cards (regular or 30-day accounts), you pay your bill in full
each month rather than carry a balance. The most well-known charge card
is the American Express® Card, recognized around the world, and one
of several types of cards offered by American Express. Charge cards are
also offered by many department stores and gasoline companies.
Credit Cards
Unlike charge cards, credit cards allow you to carry a balance from month
to month. However, you are required to make at least a minimum payment
each month. Interest is charged on the outstanding balance. Major credit
cards carrying the Visa® and MasterCard® brands are honored by
merchants around the world.
Retail Credit Cards
Retail merchants such as Sears® and J.C. Penney® issue credit
cards that are accepted only by their particular store. Similarly, gasoline
credit cards, such as the Exxon/Mobil® card, are accepted only at
those particular stations. These cards carry an interest rate but generally
no annual fee.
Debit Cards
With debit cards, the full amount of the purchase is immediately deducted
from your checking account at the time of use.
To see which is the best option for you, select the most important criteria in the table below:
