Bank Cards

Speaking from the point of view of the consumer, use of bank cards is most widespread and at the same time, they are the most helpful credit cards. Among the different types of bank cards available in the market, Visa and MasterCard are the two most popular credit cards. In order to obtain a Visa or MasterCard, one has to contend with any financial institution that is an associate of the Visa or MasterCard business. Although Visa and MasterCard are called bank cards, one may obtain them from sources other than banks too. Visa and MasterCard credit cards are available with credit unions, savings and loan association as well as many other similar institutions or groups. Actually, Visa and MasterCard credit cards are known as bank cards because in the early days they were issued only by the banks. Since then, the name 'bank card' has been associated with these two credit cards.

It must be mentioned here that a Visa or MasterCard should essentially be obtained from any bank or financial institution issuing them. The Visa or MasterCard organizations never issue any type of credit cards to the consumers. On the contrary, these organizations actually deal with several different activities that enable the bank cards to function and under no circumstance do they issue any card themselves. Initially, both Visa and MasterCard were launched as a kind of cooperatives that were operated by the bankers for their common/ shared profits. However, as these organizations have turned out to be immensely successful, large as well as potent at times many, especially the smaller members of the organizations, believe that they may perhaps be very close to the members who supposedly operate the credit card business.

As discussed earlier, all financial institutions that issue different credit cards, including Visa or MasterCard, frame their individual terms and conditions for the specific cards they distribute. This is the reason why despite appearing alike, two Visa cards may be different vis-à-vis the annual membership or cost and the advantages associated with each of them. The most important thing to be borne in mind regarding Visa and MasterCard is that since each bank establishes its own terms and conditions for using the credit cards issued by them, one Visa or MasterCard credit card issued by one bank is likely to be different from the ones issued by a different bank. Even the benefits and services pertaining to Visa and MasterCard credit cards issued by different banks differ. For instance, one MasterCard issued by a particular bank may offer the customers a special indemnity or cover for renting cars along with the cost of the card, while another issued by a different bank may not offer any such benefit. Thus, in order to avail the best offer, it is essential for one to examine the offerings made by each bank on the credit cards issued by them.

From what is inferred from the above discussion, it is important for everyone shopping for a bank card to look for the credit card available at the minimum cost and most favorable terms and conditions. However, it is really regrettable that the financial institutions, including banks, which issue credit cards, have never bothered to consider the customers' case and make credit card shopping an easy job. In fact, institutions marketing the credit cards put issues such as the cost of the bank card and the actual benefits on the backburner, while highlighting the inconsequential features like supposed prestige of holding a platinum card. They tend to overlook the more important aspects associated with a bank card - annual fees/ cost and interest rates. Usually, these features are never mentioned in the credit card marketing promotions like direct mailings to the prospective customer, advertisements or any other form. Even if they are mentioned, the credit card marketers talk about a very low charge, only the minimum fees that are legally mandatory and not any other important fee. Hence, it must be said that commercials or promotions can never be considered to be the best manual to assess the value of a credit or bank card.

Benefits of bank cards

The main advantage of the bank cards is that they are accepted almost everywhere and by almost everyone. In fact, compared to other kinds of credit cards, most merchants prefer Visa and MasterCard simply owing to the fact that it is less expensive to accept them than the American Express or Diners cards. Merchants are usually required to pay a substantially higher commission to accept credit cards such as the American Express or Diners.

In addition, the membership or yearly fees for bank cards are much less compared to what is usually charged Travel and Entertainment (T&E) credit cards. In some cases, customers are not required to pay any annual fee for the bank cards at all. In actual fact, customers are required to pay annual fees only for the bank cards that proffer additional and valuable benefits or bonuses such as 'frequent-flier miles'. If you look at it, you will find that nearly all the airlines have their partner banks issue Visa or MasterCard arrangements that enable you to acquire 'frequent-flier miles' for each dollar of credit purchase made by you. For instance, Delta has an Optima card issued by American Express that is more like a bank card than a T&E card as it allows the card holders to pass on a balance. When you accumulate around 25,000 'frequent-flier miles', you are entitled to a free flight anywhere within the United States. In case you are able to notch up more 'frequent-flier miles', dependent on the airline, you may even earn a free flight to Europe. There is no doubt that acquiring a bank card may prove to be a favorable deal provided you spend a lot of money through credit purchases and pay your bills regularly every month. This will not only help you to avoid paying huge interests on the balance, but also enable you to earn lots of 'frequent-flier miles' for every credit purchase made by you. However, the bank cards may not be suitable for you if you do not make enough purchases on credit and earn sufficient 'frequent-flier miles' to avail free flights before the validity of your miles expire. Normally, most bank cards offer below three-year program for using up the 'frequent-flier miles'.

Another advantage of possessing a bank card is that it is possible to get cash advance or loans on these credit cards from many banks worldwide. However, while obtaining loans against a bank card one should be careful and learn about the several probable hidden costs associated with such cash advances. For instance, the hidden costs associated with loans availed against bank cards may include the infamous loan charge and the directly accumulating interest amount. However, it is fortunate to know that there are still a small number of bank cards that do not charge such any fee for cash advance.

When you have a bank card you enjoy the facility to purchase nearly everything on credit and also the advantage of not having to pay any interest on the credit for a specified period, depending on the terms and conditions laid down by the issuer of the card. This is primarily owing to the fact that bank cards are accepted by almost everyone, everywhere. Moreover, though you may be using the bank card to credit purchase commodities at various times in a month, you may clear the bill by issuing one cheque, instead of reimbursing through multiple cheques. In addition, when you use a bank card, you don't have to take the trouble of listing all your purchases and the money spent, as all this will be done by the organization issuing the credit card. Such an arrangement is definitely a great help as far as maintaining accounts and following up things are concerned for taxation and other purposes. At the same time, the statements mailed to you by the bank enables you to keep evidence of all purchases made by you as well as the date of purchase keeping in view the warranty on the items bought.

Shortcomings of bank cards

It is interesting to mention that some of the advantages of bank cards may also turn out to be the credit card's greatest shortcomings. However, the first disadvantage of possessing a bank card is that you need to pay an annual fee for it. As the bank cards are accepted extensively and are so helpful that they may often turn out to be really hazardous. These facilities may tempt you to make credit purchase of different commodities at various places that you may eventually not be in a position to pay for. Another disadvantage of having a bank card is that if a felon is able to break through your account and password, he may end up using your credit card to purchase considerable amount of commodities for which you may not afford to pay. Moreover, the customer services of the bank cards have been found to be inferior to that offered by the travel and entertainment (T&E) cards and also some store cards. For instance, even if you face a straightforward problem like a billing mistake where you have been charged in excess for a hotel room, you may find it relatively hard to resolve it than if you possessed a T&E card or a store card. It is important to mention here that the bank cards, store cards or the T&E cards are often rewarded in a big way for resolving even the smallest problems of their customers.

Disadvantages of possessing a bank card may be many. For instance, the interest rates on credit purchases using bank cards are usually exceptionally as well as irrationally steep. In fact, most banks are making massive proceeds from the exaggeratedly high interest rates on the account of the credit cards issued by them and there is no indication that they disposed to amending their way of functioning in this regard. Finally, apart from the annual membership charges, there are several hidden fees, such as late fees, spending beyond the permissible limit fees, bounced cheque fees, charges for obtaining statements of expenses etc., associated with bank cards are just waiting in the darkness to swoop and gnaw the unsuspecting bank card holder.

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